I found myself mesmerised on Monday looking at the Italy page of a website called National Debt Clocks.org. A 13-digit figure, representing Italy’s outstanding national debt, goes up by a couple of thousand euros every second. Now the debt is just under €2.2tn, or about 133 per cent of Italy’s annual economic output.
Despite its astronomical debt burden, the Italian government succeeded last October in selling two-year bonds at a negative yield. In other words, investors paid Italy, one of the planet’s most indebted nations for the past quarter of a century, for the honour of buying its debt.
This is a topsy-turvy world that inspires me with something less than full confidence in financial markets. It leads me to the topical question of whether Italian banks own too much Italian government debt for their own good. On this issue Matteo Renzi, Italy’s prime minister, holds forthright views. Read more
By Rachel Sanderson in Milan
In his ninth end of year address to Italians and the last before he retires this year, Italy’s president Giorgio Napolitano pulled no punches.
His voice hoarse and visibly tired, in a televised speech on Wednesday night, Mr Napolitano attacked the prevalence of organised crime in Italy describing it as a “subsoil of rot” running through Italian social and political life. Read more
Here are three reasons why some of Italy’s EU partners don’t want Federica Mogherini, the Italian foreign minister, to become the 28-nation bloc’s next foreign policy supremo.
Only one is to do with her. The second is about the distribution of big EU jobs among nations. The third, most important reason is about Italy and why its foreign policy may not suit the EU as a whole. Read more
Today Germany and France will meet in their World Cup quarter final in Rio de Janeiro, the latest episode in one of Europe’s classic football rivalries. But off the pitch, a different duel is gripping the continent’s political scene: the one between Germany and Italy. Read more
♦ Young ‘scrapper’ squares up for reform battle. The challenges awaiting Matteo Renzi, the 39-year-old centre-left leader likely to form Italy’s new government
♦ As Britons struggle to protect their homes from unprecedented floods, the sandbag – the traditional bulwark against rising water – has been branded by experts outdated and hopelessly ineffective.
♦ Termite robots build the future. The FT looks at a ground breaking experiment in artificial intelligence.
♦ How an Arab/Iranian women’s movement to fight patriarchy through reclaiming the body has become intertwined with revolutions in the Middle East.
♦ Carlo Strenger in Haaretz slams the Israeli right’s use of ‘the holocaust card’ whenever the settlement policy is criticised by overseas allies.
♦ For romantically inclined smart readers: The Economist explains the science of love at first sight. Read more
Do last week’s German constitutional court ruling lambasting – but failing to overturn – the ECB’s crisis-fighting bond-buying programme and Matteo Renzi’s ousting of Italy’s prime minister Enrico Letta have anything in common?
In the view of many ECB critics, particularly in Berlin, the two are not only related, but one may have caused the other. Read more
♦ Italy’s dire jobless figures have shattered a fragile optimism as the country’s political disarray increases, writes Guy Dinmore.
♦ David Pilling looks at the emergence of anti-establishment figures in Asia who are challenging the prevailing order in a year which will see elections across the region.
♦ Chris Giles says now that the Bank of England has been proved wrong over its forecasts on unemployment it is time the governor considered raising interest rates.
♦ Foreign Policy profiles the duelling protest movements that underline the spirit of division in post-revolutionary Tunisia. The journal also shines a light on a dangerous new front it says has opened up in Syria.
♦ Barack Obama has been boasting for two years that he “ended the war in Iraq, writes Peter Baker in The New York Times, as he describes the grim aftermath left behind.
Robert Gates, who served both Republican and Democratic presidents, has lifted the lid on his time running the Pentagon. Politico reviews his candid memoir. Read more
By Catherine Contiguglia
♦ Italy’s government often gets dismissed as being a mess, but Enrico Letta has made some notable achievements, writes Chris Hanretty, a lecturer in politics at UEA. However, the next 100 days will present some challenges, including the backlash from Silvio Berlusconi’s tax fraud conviction, and electoral and tax system reforms.
♦The staging of walkouts across the fast food industry is not about young entry-level workers wanting more money to pay for the movies on Friday – it is about the failure of the US economy to create reasonable middle-class jobs for older and more educated workers who now depend on low wage jobs to support their families.
♦ “Mugabe will leave power when he wants to – or when his body gives out,” writes Richard Dowden in his analysis of Robert Mugabe’s victory Zimbabwe elections, which he says is partly explained by rigged elections, but also mistrust of his opponent, and the sentiment that it is better not to “upset the Big Man.”
♦ Vladimir Putin is launching an amnesty program to release some of the 110,000 people imprisoned under his leadership for “economic crimes” – such as allegedly violating the copyright on leopard print – so that they can help him figure out how to turn around the languishing economy.
♦ The corruption and nepotism that surrounds China’s political elite gets a lot of press – but in the shadows of the spotlight looms a far more widespread system of families that dominate the villages and towns throughout the vast countryside. Read more
♦ Italy faces billions of euros in potential losses, after restructuring eight derivatives contracts last year. Italy’s judiciary is investigating whether the Treasury risked too much monetary loss in its management of the public debt, according to the FT. The inquiry began after a 2012 treasury report was leaked to the FT and Italian daily La Repubblica.
♦The New York Times asks “Is the Civil Rights Era Over?” as it gets experts to ponder Tuesday’s rejection of the Voter’s Rights Act and Wednesday’s same-sex ruling to recognize legally married gay couples. The FT finds a polarised national response to the measures.
♦ The Sydney Morning Herald finds a historical precedent of backstabbing underlying Australian politics and the run up to elections for prime minister. Julia Gillard “died by the sword,” the Herald says, after competing against Kevin Rudd and Labor power broker Bill Shorten for the role of Australian prime minister.
♦ The Daily News Egypt sees no “safe possible outcome” and certain military involvement with the approach of the “Tamarrod,” the nationwide protest movement scheduled for June 30 to demand new presidential elections in Egypt to replace president Mohamed Morsi.
♦ Foreign Policy asks why Mr Snowden missed his flight from Moscow to Ecuador — did Russian military intelligence detain him for questioning or security services question his dubious travel documents, was he afraid the plane would be grounded in the US or simply shy of journalists?
♦ The FT analyses aggressive EU lobbyists in Brussels funded by American tech companies that advocate for more liberal internet privacy rules. The issue has moved to the top of the EU legislative agenda, as the EU summit begins Thursday.
♦ A BBC interactive maps children’s chances of success around the world –in health, education, work, and general well being. Read more
It takes a little more than 15 minutes to cover the mile-long distance that separates the Bank of Italy from the ministry of the economy and finance in central Rome. But the upper echelons of the two institutions dominating the commanding heights of Italy’s economy have traditionally been closely linked by a revolving door. Read more
Margaret Thatcher and Giulio Andreotti – they didn't always see eye to eye
Tuesday’s FT contained a wonderful obituary of Giulio Andreotti, a man who managed to be prime minister of Italy no fewer than seven times – as well as serving as foreign minister for much of the 1980s. Yet, as the FT obituary notes, Andreotti’s life ended in semi-disgrace, with the former PM preferring to to travel to “those parts of the world where he was still treated with respect: notably Libya, Syria and Iran.”
The Andreotti story is not simply an Italian curiosity. For the former Italian PM was also a pivotal figure in the construction of Europe and in the debates that led to the formation of the European single currency. As such, he crops up quite frequently in Margaret Thatcher‘s autobiography – in ways that cast a revealing light on today’s debates and dilemmas. Read more
♦Cecile Kyenge, Italy’s first black minister, is confronting the country’s culture of casual racism, but the success of her proposed legislation depends on her fellow parliamentarians – some of whom have not been entirely complimentary about her.
♦ China is pushing to water down the World Bank’s Doing Business report, showing its increased assertiveness at international bodies and its willingness to challenge liberal economic prescriptions.
♦ Growth in Indonesia has reached its slowest pace in two years, hit by the slowdown in China and India, but investors are still feeling confident.
♦ David Gardner argues that Israel’s latest attacks on Syria play right into Assad’s hands supporting conspiracy theories about a western-conceived attempt to destroy Syria.
♦ Somalia’s president, Hassan Sheikh Mohamud, calls for a Marshall plan to help his country recover from decades of poverty, civil war and terrorism.
♦ Roberto Azevêdo of Brazil and Herminio Blanco of Mexico are scrambling to secure last-minute votes in a tight race to become the next head of the troubled World Trade Organisation.
♦ Hollywood film-makers are going to great lengths to satisfy the whims of Chinese censors. However, appearances by Chinese actors in the Chinese version of Iron Man 3 have not been to everyone’s taste – “One microblogger named Bumblebee Marz compared the new scenes to chicken ribs — a common expression denoting the most tasteless and undesirable cut of meat in Chinese cuisine.”
♦ Dexter Filkins looks at the White House debate over Syria. According to Gary Samore, who was President Obama’s chief adviser on weapons of mass destruction until February, “All the options are horrible”.
♦ Obama’s off-the-cuff remark about large quantities of chemical weapons crossing a “red line” have now put him into a bind, “his credibility at stake with frustratingly few good options.”
♦ Gabriel Kuris at Foreign Policy looks at how Latvia’s anti-corruption bureau managed to pass through reforms and take down oligarchs. Read more
♦ Ireland’s head of state says the EU must drop its “hegemonic” economic model and reform the ECB, or risk social upheaval and a loss of popular legitimacy.
♦ The Great Tax Race series turns to Ireland, looking at how Ireland has remained attached to aggressive tax policies that favour businesses even as ordinary people have struggled to get by. (If you’re trying to get your head around how all of this even works, watch this handy explainer from Matt Steinglass)
♦ Richard McGregor thinks President Obama needs to circumvent Congress if he wants to get his agenda moving.
♦ Western clothing companies are scrambling to address public concerns over working conditions in Bangladesh – the Walt Disney Company ordered an end to the production of branded merchandise in the country before Rana Plaza collapsed. John Gapper today makes the argument against western companies withdrawing: “Despite everything, the industry provides better-paid jobs than the alternative – working on rural farms – and has helped to emancipate women.”
♦ Despite violence and corruption, Afghan entrepreneurs are still making opportunities for themselves.
♦ The Kremlin is putting pressure on VKontakte, a Russian Facebook clone, pushing CEO Pavel Durov to leave the country.
♦ Slate is publishing a series of excerpts from the memoirs of Mohamedou Oul Slahi who was a prisoner at Guantánamo for nearly 11 years.
♦ Mafia historian goes underground into the bunkers of the Ndrangheta, Europe’s biggest cocaine traffickers and Italy’s most powerful organised crime group. Read more
♦ In the first installment of our Great Tax Race series, Vanessa Houlder examines how the Netherlands and Luxembourg managed to book more foreign direct investment than the US, UK and Germany together. Exploitation of cracks in the international tax system has ignited intense anger from an austerity-weary public. Matt Steinglass looks at how the Netherlands wants to change its tax haven image, but is wary of scaring businesses away.
♦ Italy has a new government and it has already been met with mayhem.
♦ Just after winning the most votes in Iceland’s parliamentary elections, the head of the centre-right Independence party has said the government needs to focus on restoring growth.
♦ Anne-Marie Slaughter thinks President Obama should keep the Rwandan genocide in mind when weighing up action in Syria.
♦ The 26-year-old Chinese entrepreneur who was kidnapped by the Tsarnaev brothers describes his harrowing experience. The Boston Globe has also pulled together a timeline of the hunt for the bombing suspects.
♦ William Zinsser, author of “On Writing Well”, is still counselling people on the subject at the age of 90. He holds one-to-one sessions with people who read their writing out to him, as he cannot see, and only accepts sandwiches as payment.
♦ Maryam Sharif takes to the street to canvass for her father who is likely to become Pakistan’s PM for a third time: “It’s a beautiful feeling to be loved”. Read more
Beppe Grillo on the campaign trail
Two months ago Beppe Grillo came out as the big winner of Italy’s general elections. His Five Star Movement, which was created only in 2009, came within a whisker of becoming Italy’s single largest political force. His vote tally in the Lower House was an extraordinary 8.7m, more than Silvio Berlusconi’s People of Liberty party and only a few hundred thousand votes less than the centre-left Democratic Party. Read more
The Austerity Debate
♦ Europe may have hit the political limits of how far it can go with austerity-led economic policies because of the growing opposition in the eurozone periphery, according to the president of the European Commission.
♦ Tim Harford tells the story of Thomas Herndon, the student who uncovered a mistake in a famous economic paper that has been used to make the case for austerity cuts, and considers what it means for austerity economics.
♦ Choking back tears in his inauguration address, Giorgio Napolitano, who at 87 reluctantly accepted an unprecedented second mandate as Italy’s president, slammed the country’s political parties for their failure to reach agreement and for the “unforgivable” lack of political reforms.
♦ Tony Barber argues that public outrage is not bred only by economic crisis, and that politicians in Italy (and elsewhere in Europe) should get their houses in order.
♦ Italy’s political and economic torpor is epitomised in the ruined and abandoned city of L’Aquila.
♦ In northwest Pakistan, militants are using bombs as campaigning tactics ahead of the May parliamentary elections.
♦ It’s the UK’s turn to host the G8 and Richard Dowden, director of the Royal Africa Society, wants to know if it will do anything to stop companies avoiding tax in poor countries: “More important than giving aid would be to stop doing bad things to poor countries. The worst thing we – the British – do is to maintain the world’s most iniquitous secret tax havens.”
♦ In the past year, two trillion dollars has not been reported to the IRS because “ordinary Americans have gone underground, and, as the recovery continues to limp along, they seem to be doing it more and more.”
♦ Kidnappings of ordinary Syrians are on the rise as lawlessness spreads.
♦ The byline was borne of a need to make reporters more responsible for what they wrote about the Civil War in the US. Read more
♦ Overnight, one of the two suspects in the Boston Marathon bombings was killed during a car chase. Officers have mounted a manhunt to find a man believed to be the other suspects, reports Robert Wright. The FBI has issued photographs of the suspects and details are beginning to emerge about their background. Updates throughout the day on FT.com
Gun control and a captured Senate?
♦ The US Senate on Wednesday voted down two measures that would have imposed tough new rules on who can buy guns. The Guardian reports this morning that all but three of the 45 senators who voted ‘No’ received money from firearms lobbyists.
♦ Gabrielle Giffords, the former Arizona congresswoman who was shot in the head in 2011, lambasted the senators in an Op-Ed for the New York Times. “Senators say they fear the N.R.A. and the gun lobby. But I think that fear must be nothing compared to the fear the first graders in Sandy Hook Elementary School felt as their lives ended in a hail of bullets… These senators made their decision based on political fear and on cold calculations about the money of special interests like the National Rifle Association, which in the last election cycle spent around $25 million on contributions, lobbying and outside spending.”
♦ The FT’s Guy Dinmore visited L’Aquila, four years after it was devastated by an earthquake. Reconstruction there has all but ground to a halt, through lack of money and paralysing politics – making the city “the ultimate symbol of Italy’s great stagnation.”
♦ Tom Feiling writes for the new digital magazine, Aeon, about why Colombia’s FARC guerrillas are still resisting the coming peace. “Is it drug money or the romance of revolution that’s to blame?“ Read more
(Photo by Christof Stache/AFP/Getty)
The former Italian prime minister Giuliano Amato once compared the powers of Italy’s president to an accordion. Just as the box-shaped musical instrument can expand and contract, the same is true for the influence of Italy’s head of state: what the president can or cannot do largely depends on the strength of the political parties.
On Thursday, Italy’s 949 MPs and 58 representatives from the 20 regions will convene to elect the successor to President Giorgio Napolitano. Amato himself is a candidate, alongside former prime minister Romano Prodi, former European commissioner Emma Bonino, and others.
The political stalemate following February’s inconclusive election means that the new president will have to be picked on the basis of a last-minute deal between the centre-left, (the largest alliance in Parliament) and at least one of the other three significant forces – the centre-right coalition of the People of Liberty and the Northern League, Beppe Grillo’s Five Star Movement and Mario Monti’s Civic Choice. There are no clear favourites for the job. Yet, this election will matter a great deal for Italy and for those who are interested in a solution to its political crisis.
For decades, the President’s job was seen as largely ceremonial. True, the President is the head of the judiciary and of the armed forces. But he doesn’t have anything like the kind of executive powers held by the French or American presidents (though he can veto any law if he believes it is against the constitution). Read more