Italy

Boston

♦ 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.”

Elsewhere

♦ 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

An elderly man plays his accordion at the old town market in Warsaw, Poland, on June 24, 2012 (CHRISTOF STACHE/AFP/GettyImages)

(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

The Italian dog that did not bark is one of the great untold market stories of the past month. The yield on Rome’s 10-year bonds is around 4.3 per cent, a level not seen since the end of January.

Chart: Italy’s 10-year bond yield (black line) over the past five years; blue line shows the yield on the German 10-year bund

chart courtesy of Reuters

(Chart courtesy Reuters)

The spread with the Bund, which has obsessed Italians since the market panic at the end of 2011, has narrowed to just above 300 basis points. It almost looks as if February’s inconclusive election and the accompanying political uncertainty do not matter. This is puzzling, so here are a few tentative explanations:

1) Mario Draghi’s magic. The pledge by the president of the European Central Bank last summer to do “whatever it takes” to save the euro is the single most important explanation for the relative quiet on Italy’s bond market. The Outright Monetary Transactions scheme, whereby the ECB will purchase unlimited quantities of debt of countries in difficulty, has so far proven a remarkably resilient firewall. Read more

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Situation vacant? Mario Monti (Getty)

There were two big job vacancies in Rome last month. The Catholic Church began looking for a new pope after the shock resignation of Benedict XVI. Meanwhile, Italians went about the business of picking a new head of government who would end Mario Monti’s technocratic interlude.

The Vatican is not exactly known for its speedy decision-making. Yet it only took the conclave of cardinals a couple of days to elect Jorge Mario Bergoglio as the new head of the church. Pope Francis – as he is now – is already making headlines with his new message centred on the need for a humbler and more austere church.

On the other side of the Tiber, Italian politicians are still struggling to choose a new prime minister. Today and tomorrow, President Giorgio Napolitano is meeting party leaders and other institutional figures to talk about what to do next. But Italy-watchers do not expect white smoke to come out of the presidential palace any time soon.

Last month’s inconclusive elections have produced a three-way deadlock in the Senate between Pier Luigi Bersani’s centre-left coalition, Silvio Berlusconi’s centre-right alliance, and Beppe Grillo’s Five Star Movement. The only solution to the impasse is a government that is backed by at least two of these forces. But this trilemma has no easy solution. Read more

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  • Tony Barber argues that a decontamination of Italian politics must come before economic salvation, and the two issues should never be separated.
  • Clown-turned-politician Francisco Everardo Oliveira Silva was elected into the Brazilian congress with a record number of votes in 2010. However, the joy of his campaign has given away to a weariness of the politician’s life: “You pass whole days here doing nothing, just waiting to vote on something while people argue and argue.”
  • “Enemy-initiated attacks” in Afghanistan have stayed constant from 2011 to 2012. The reported 7 per cent drop was actually the result of a clerical error.
  • Is it a bird? Is it a plane? No, it’s a barrel full of pork that no longer exists. The Washington Post reports on the tiny local airports in the US that attract plenty of federal spending, but very few planes.
  • Tunisians and Egyptians have to fight for their right to do the Harlem Shake.

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(AFP/Getty)

(AFP/Getty Images)

Beppe Grillo, the big winner of Italy’s 2013 election, first rose to fame in the 1970s as an irreverent, foul-mouthed comedian with corruption of all kinds in his sights. Read more

Two interesting trends that have shown up in the data from Italy’s election today.

1) The preliminary election results among the nearly 3.5 million Italian voters living abroad show a very different picture from the results within Italy.

chart created by Valentina Romei

The austerity measures and market-friendly stance of the ex-Prime Minister Mario Monti managed to convinced over 27 per cent of the votes of Italians living in Europe and in North and Central America, where his movement came in second after Pier Luigi Bersani’s Democratic Party (PD). Within Italy, fewer than one in ten Italians voted for him.

Meanwhile, the comedian-turned-political leader Beppe Grillo successfully won over Italians in the plazas where he held numerous rallies, but it appears that his anti-establishment message was not heard so sympathetically by Italians around the world. Read more

Mario Monti exits a voting booth on February 24 (AFP/Getty)

Mario Monti exits a voting booth on February 24 (AFP/Getty)

Paul Krugman has got in early to comment on the political demise of Mario Monti – who now seems certain to trail in fourth in the Italian elections. According to Krugman, Monti’s reputation for wisdom is wildly overblown. On the contrary, he more or less deserves his fate because he was “in effect, the proconsul installed by Germany.”

Worse, according to Krugman, Monti’s policies did not even work. As in the rest of southern Europe, the economy has shrunk and so debt-to-GDP ratios have risen. There was only one “piece of good news” in the Monti era – that “bond markets have calmed down.” However, Monti cannot claim the credit even for this, because it is “largely thanks to the stated willingness of the ECB to step in and buy government debt when necessary.”

As ever, with Krugman, the argument is forcefully made. But it misses out a crucial stage in the argument and therefore unfairly denigrates the role of Monti in stabilising the Italian economy. Remember, when Monti came to power, the steady rise in the interest rates that Italy was having to pay to finance its debt was eating up more and more of the Italian budget. There was a real prospect that Italy might simply be unable to finance itself through the bond markets – and that might have sparked a terminal crisis in the euroRead more

Italians cast their ballots in a tight election, with Brussels, Berlin and the markets looking on. By Tom Burgis, Lina Saigol, Ben Fenton and Shannon Bond with contributions from FT correspondents across Italy and beyond. All times are GMT. 

On this, the final day of polling in Italy’s 2013 election, we thought it would be worth highlighting five blog posts from the FT that will help provide the context you need to understand the results when they eventually emerge…

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Italy's former Prime minister Silvio Berlusconi delivers a speech during a rally of his party "Popolo della liberta" (People of the Freedom - PDL) in Rome, on February 7, 2013 (ANDREAS SOLARO/AFP/Getty Images)

(AFP/Getty)

As Italy’s increasingly surreal election campaign draws to a close, it is still hard to believe that Silvio Berlusconi, who exited government so ignominiously 18 months ago, may well garner enough votes with his coalition partners next weekend to deny the centre-left and Mario Monti an outright win.

Should that happen, as is probable, Italians are destined for more political instability. They may be back at the polls within a year or 18 months.

In that context alone, understanding the enduring appeal of Berlusconi – who failed to stem a decline of Italian economic competitiveness during his time in office and remains mired in corruption trials – can be baffling for an outsider. But go out on the stump with Italy’s veteran showman, as I did on Monday night, and it all becomes a little clearer. Read more

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(Getty Images)

(Getty Images)

I have just spent a few days traveling across Veneto, Italy’s industrial heartland in the north east of the peninsula. One of the tasks I had set myself for this trip was to understand whether Italy’s economic crisis is fuelling euroscepticism.

Italy has traditionally been among the continent’s most europhilic countries. To the astonishment of outside observers – particularly those from the Anglo-Saxon world – Italians have seemed relatively at ease with the idea of handing more and more powers over to Brussels.

One of the reasons behind this attitude is their deep lack of trust in their own political class. The euro is seen as a bridge to modernity and progress, rather than a drag on national sovereignty.

After the wave of austerity which has recently hit Italy, and which Brussels was at least partially responsible for, I expected this attitude to have become somewhat less positive. Veneto was an excellent testing ground for its resilience. This wealthy region is governed by Luca Zaia, from the Northern League, the most eurosceptic among Italy’s mainstream parties. Veneto has a strong export-oriented manufacturing sector, which can no longer rely on competitive devaluations as it did in the 1980s and 1990s, before Italy entered the euro.

This point was made to me by Roberto Brazzale, a food entrepreneur from the province of the city of Vicenza, who has off-shored much of his production of parmesan cheese and mozzarella to the Czech Republic. “We must exit the euro,” Mr Brazzale said. “And do it before our industrial base is completely wiped out”. Read more

He is not quite kissing babies yet but Mario Monti is throwing off his image as a fusty economics professor and former EU bureaucrat with his first election campaign spot.

The one-minute spot – released today on social network sites and local television stations – shows the human side of the 69-year-old, playing on the carpet with his grandchildren and promising a “together we can do it” better future.

Hammering home the message that the “old parties are not capable of reforming Italy”, the ad skips over the issue that Mr Monti’s centrist alliance includes two of parliament’s most veteran politicians.

If the campaign carries echoes of Barack Obama, could that be because Italy’s technocrat prime minister has hired two consultants from the old team led by David Axelrod, strategist for the US president?

The spot cleverly splices images of wads of cash changing hands and lines of official limousines as Mr Monti promises to crack down on corruption and wasteful government spending while promising economic growth, jobs and “responsible” tax cuts. Read more

Francois Hollande (R) and Mario Monti in Paris on February 3 (BERTRAND LANGLOIS/AFP/Getty Images)

Mario Monti with Francois Hollande on February 3 (BERTRAND LANGLOIS/AFP/Getty Images)

Italy’s foreign policy has long been founded on supporting its western allies in times of need.

Unlike the French, Italy backed the US invasion of Iraq in 2003; it has troops in Afghanistan and, unlike Germany, it supported – though with some foot-dragging – military intervention in Libya in 2011.

But electoral considerations have trumped solidarity with France over Mali, forcing an embarrassing u-turn.

Mario Monti’s foreign and defence ministers last month pledged logistical help in the form of transport planes and refuelling for the French. “We are beside you, Paris,” newspapers proclaimed. But on Sunday, in Paris, Italy’s technocrat prime minister had to explain to François Hollande that no such support would be forthcoming after all.

Franco Frattini, former foreign minister and member of Silvio Berlusconi’s centre-right party, is particularly disappointed, having passed a resolution in parliament on January 22 – with support from members of the centre-left Democrats and the centrist UDC – that backed Italian logistical intervention.

“Because of the election campaign we run the risk of not fulfilling our European duties of solidarity,” Mr Frattini told the FT. Read more

A few weeks ago I was in Oxford for the screening of Girlfriend in a Coma, the film on Italy’s decline written by Bill Emmott, former editor of The Economist, and Annalisa Piras, an Italian journalist and filmmaker. The audience – consisting mainly of British Italophiles and young Italian researchers who had left the country’s decaying universities to find shelter in British academia – gave the documentary a warm reception. During the discussion I chaired after the screening, Emmott conceded that taking the movie to Italy would pose a far greater challenge. He joked that he and Piras would need bodyguards. Their movie is in fact a brutal exercise in truth-telling, aimed at holding to account those who have run Italy over the past two decades.

Italy’s first reaction has, indeed, proved rather unwelcoming. The Italian premiere of Girlfriend in a Coma, scheduled for February 13 at MAXXI, a museum of contemporary art in Rome, was suddenly cancelled on Friday. Read more

For those used to a democratic system with an established political dynamic – Democrats v Republicans in the US, or Conservatives, Labour and Liberal Democrats in Britain – Italy can seem strange. Some of the parties and alliances running in this year’s general election did not even exist in previous contests.

Italians will be asked to vote in February for one of 169 parties, movements and groups that made it onto the ballot. Many have unfamiliar names, such as the newly formed alliance of Italy, Common Good (which combines the Democratic party, the socialists and others), the Five Star Movement party created by the former comedian Beppe Grillo, or the even newer Monti movement, formed around the agenda of the ex-prime minister.

Data collated by the FT

How could the Italian political system have worked for so long with such a fragmented composition? The answer is that, for most of the time, it hasn’t.

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