Mario Draghi is best known for saving the euro. But a coveted rescue of the Italian economy ended prematurely when internal politics came to the fore last month, making it harder and harder for him to govern.
In the space of about a week, Italy went from having a stable government to preparing for snap elections in September — which could see the far-right in charge of the next coalition in Rome. This prospect has investors questioning Italy’s economic future and its broader role within European politics.
Draghi “was certainly a little bit tired of the politics within the government,” an official working for the Italian government, who preferred to remain anonymous due to the political instability in the country and the sensitive nature of the comments, told CNBC.
Once a managing director at Goldman Sachs International, Draghi became Italian prime minister in February 2021 to lead a technocratic government, backed by four main parties across the political spectrum. His arrival in Rome was welcomed by investors and European officials, who were desperate to see a safe pair of hands leading the euro zone’s third-largest economy.
The former European Central Bank chief delivered on several fronts, including putting together a reform plan to get more than 190 billion euros ($194.52 billion) from the EU. The disbursements are, however, linked to the completion of these reforms, so investors fear the next coalition might not follow through with Draghi’s plans, and hence may not receive all of the cash from Brussels.
The prime minister also revived Covid-19 vaccination efforts and contributed to an economic rebound. But throughout his mandate, Draghi had to struggle with a slew of political sensitivities.
The collapse of his government came about because of those fragilities at the heart of government. It started with the Five Star Movement (M5S), a left-leaning and populist party, boycotting a vote on a package aimed at helping Italians deal with the surging cost of living. The package included a controversial waste incinerator for Rome, which M5S vehemently rallied against.
The same anonymous CNBC source said M5S has a “great following in Rome, not so much in the rest of the country, but this law was a problem for this electorate.” By not voting for the wide-ranging package and blocking it, the party was in essence against the government that they were part of, the official said.
Draghi offered his resignation after the stalemate on the vote.
A second Italian official, who preferred to remain anonymous due to the sensitive nature of the situation, said the move from M5S was “a significant decision.”
Draghi had “trusted this was a national unity government,” the official said. But with M5S abstaining from the vote on the government’s bill, “Draghi felt [it] was becoming harder and harder to enact his program,” the official added.
By late evening Wednesday July 15, Italy’s President Sergio Mattarella had rejected Draghi’s initial resignation and told him to build a new parliamentary consensus.
In the following days, hundreds of mayors had signed a letter asking him to stay. Union leaders and industrialists also come together to ask Draghi to remain in office. And there was an online petition signed by thousands of citizens who wanted him to stay.
The next week, Draghi returned to the Italian Parliament and asked lawmakers for a new mandate. “Are the parties and you parliamentarians ready to rebuild this pact?” he declared in the Senate on July 20. “Italy needs a government that can move swiftly and efficiently,” he told lawmakers.
The first CNBC source said they were surprised that Draghi asked for a new mandate to try to build unity once again. “To be honest, his speech was really tough against M5S and the Lega [party] … his aim was to put it clear: if we do another government, we have to continue without problems,” the source said.
“If they said yes, [Draghi] had all the power he wanted; if they said no, he could resign without being blamed for leaving the country,” the official said.
The second CNBC source stressed that Draghi was “very concerned” about being able to pass new laws in Parliament. Draghi was due to finish his mandate before next summer with parliamentary elections expected in June 2023.
But Italy is now preparing for a new vote on September 25 with a lot at stake.
“If a right-wing coalition were to win in Italy’s general election on 25 September, and subsequently abandon economic reforms, it could jeopardise not only Italy’s access to EU fiscal support and the ECB’s new anti-fragmentation tool, but more generally future EU integration and joint debt issuance,” George Buckley, an economist at Nomura, said in a research note last week.
The upcoming election will matter not only to see where Italy’s finances and fiscal strategy will be heading, but also whether Europe will continue to raise new funds together.
The recovery plan came about because of the impact that the coronavirus lockdowns had on the European economies. This was so significant that the 27 members of the EU decided to raise money jointly through the European Commission, the executive arm of the EU, for the first time. Italy, because it suffered the most from the pandemic, is receiving the largest chunk of the money borrowed.
However, if there are problems with the political situation of the biggest benefactor, then this could stifle more joint borrowing further down the line, including when tackling climate change or the impact from Russia’s invasion of Ukraine.
“Italy’s next government is unlikely to bring the country’s future in the euro-zone into doubt, in a repeat of the turmoil that we saw after the 2018 election. But it will probably run looser fiscal policy and find it more difficult to pass reforms,” Jack Allen-Reynolds, senior Europe economist at Capital Economics, said in a note last week.
Politics Briefing: Trudeau announces diplomat Jennifer May will be ambassador to China – The Globe and Mail
Prime Minister Justin Trudeau has announced that diplomat Jennifer May will take over as ambassador to China with a mandate to speak out on human rights abuses while pursuing trade with the world’s second-biggest economy.
“A dedicated public servant, Ms. May’s many years of diverse experience on international missions, and her deep understanding of Asia, will serve to manage this important bilateral relationship and advance Canada’s interest in China,” Mr. Trudeau said Friday.
While the last two ambassadors – former cabinet minister John McCallum and business executive Dominic Barton – soft-pedalled China’s human rights abuses, the Prime Minister’s Office said Mr. Trudeau expects Ms. May to use her envoy posting to highlight the importance of the rule of law and respect for human rights.
This is the daily Politics Briefing newsletter, written by Ian Bailey. It is available exclusively to our digital subscribers. If you’re reading this on the web, subscribers can sign up for the Politics newsletter and more than 20 others on our newsletter signup page. Have any feedback? Let us know what you think.
POILIEVRE VS. TRUDEAU – In his first opportunity to question Justin Trudeau since winning the Conservative Party leadership, Pierre Poilievre this week repeated his calls for a federal payroll tax freeze and chided the Prime Minister for choosing international travel over House of Commons attendance. Story here.
BRIAN MULRONEY’S DINNER WITH PIERRE POILIEVRE – Pierre Poilievre must make an appeal to Canada’s political centre if he wants to win government, former prime minister Brian Mulroney says he told the new Conservative Leader this week over dinner. Story here.
OILS SANDS COMPANIES FALL SHORT ON CLIMATE CHANGE ACTION: ANALYSIS – Canadian oil sands companies have done little to follow through on their public pledges to reduce their greenhouse gas emissions, despite raking in historic profits in 2022, a new analysis shows. Story here.
QUEBEC ELECTION – Quebec’s four opposition party leaders attacked Coalition Avenir Québec Leader François Legault on the environment, the cost of living and his management of the economy in the last debate of the election campaign Thursday, leaving Mr. Legault on the defensive. Story here. The debate, with English translation, is here on CPAC. Quebec Liberal Leader Dominique Anglade posted a tweet on her preparation for the proceedings here. Meanwhile, on Friday, Parti Québécois Leader Paul St-Pierre Plamondon said he is pausing his campaign after developing flu-like symptoms. Story here.
ONTARIO REPORTS SURPLUS – Ontario says it took in 20 per cent more revenue than anticipated last year, wiping out what it had predicted would be a $13.5-billion deficit and replacing it with a “temporary” surplus of $2.1-billion. Story here.
JURISDICTIONAL HURDLES COMPLICATE FEDERAL GUN ACTION – Federal agencies are trying to boost efforts to trace the origins of guns used in crimes, but it appears jurisdictional hurdles could prevent the measures from going as far as some would like. Story here.
LAST COUNCIL MEETING FOR WINNIPEG MAYOR – Brian Bowman bid an emotional farewell to his council colleagues on Thursday, during his last meeting as Winnipeg’s mayor. Story here from CBC.
THIS AND THAT
TODAY IN THE COMMONS – Projected Order of Business at the House of Commons, Sept. 23, accessible here.
JOLY TO VISIT SOUTH KOREA – As South Korea’s President Yoon Suk-Yeol visited Ottawa on Friday, a senior official revealed Canada’s Foreign Minister Mélanie Joly will visit Seoul next month. The disclosure, according to a Canadian Press pool report, came as the president met with Governor-General Mary Simon at Rideau Hall.
SEAL SUMMIT SET FOR NOVEMBER – Fisheries Minister Joyce Murray has announced a Seal Summit for Nov. 8 and 9 in St. John’s that will involve parties such as the Indigenous community, commercial fishing industry and provincial and territorial representatives to talk about issues including fisheries science and management, and developing new products and diversifying markets for seal and seal products.
On Friday’s edition of The Globe and Mail podcast, senior foreign correspondent Mark MacKinnon discusses what is happening in Russia where President Vladimir Putin called up 300,000 reservists in a partial mobilization for the war in Ukraine. That sparked protests in several cities in Russia, and a flood of people trying to leave the country. Mr. MacKinnon talks about what the repercussions of Putin’s escalation might be, and what it means for the broader conflict. The Decibel is here.
PRIME MINISTER’S DAY
Prime Minister Justin Trudeau, in Ottawa, visited a local school to mark Rosh Hashanah with students, and then, with Sophie Grégoire Trudeau, hosted a luncheon for visiting South Korean President Yoon Suk-yeol, and Mrs. Kim Keon-hee. The Prime Minister then held a meeting with the South Korean President. Foreign Affairs Minister Mélanie Joly and Innovation Minister François-Philippe Champagne participated. Mr. Trudeau and Mr. Yoon were then scheduled to hold a joint media availability.
No schedules released for party leaders.
The Globe and Mail Editorial Board on how the best way to help Canada’s overwhelmed health care system is to get your COVID-19 booster shot: ”Canada needs to rediscover the drive that made its earlier vaccine campaigns so successful, especially among the most vulnerable – namely, older Canadians. British Columbia took a stab at it when it announced it intends to deliver 280,000 booster shots per week this fall. Every other province needs to be at least as ambitious. There are enough boosters to go around. Ottawa said Moderna is shipping 10.5 million doses of its bivalent vaccine to Canada just this month, and Moderna and Pfizer are close to submitting even newer formulations for approval from Health Canada. Canada also has plenty of first-generation shots for the nearly one in 10 adults who never got the original two-shot series. Let’s get back to the time when Canada led the world. Every Canadian who gets vaccinated or boosted this fall reduces the number of people likely to end up in our crowded hospitals. It’s not complicated.”
Andrew Coyne (The Globe and Mail) on how giving MPs more meaningful work might lead to more civility in Parliament: “I can think of a hundred things wrong with Parliament, and heckling wouldn’t even make the list. Nor, for that matter, would incivility, at least between MPs. We pay politicians for much the same reason we pay wrestlers, to act out a relatively harmless pantomime of combat for the rest of us. Parliament exists as a forum, with all of its quaint rules and customs, not to deny social conflict but to contain and channel it, to express our antagonisms in stylized form.”
John Ibbitson (The Globe and Mail) on how the first salvo between Pierre Poilievre, Justin Trudeau proves pair will be formidable opponents in Parliament: “In June, 2014, Ray Novak, Mr. Harper’s chief of staff, confronted the Conservative prime minister with a choice: either declare now that he was staying to fight a fourth election, or step aside for someone else. Mr. Harper, who could not abide the thought of another Trudeau leading the country, decided to stay and fight. He shouldn’t have. Mr. Trudeau must know the odds are against him. Yet he must also believe that Mr. Poilievre is a threat to the country. He may have convinced himself that he and no one else can stop the new Conservative Leader from becoming prime minister. He may be right. And if he’s wrong, he won’t be the first politician to make that mistake.”
Gary Mason (The Globe and Mail) on why Pierre Poilievre doesn’t seem to care about climate change: “It’s easy to tell people what they want to hear on the campaign trail – to tell Albertans that you will boost oil production, even if it damns the climate. But Mr. Poilievre needs to be aware that a majority of Canadians will never support such an irresponsible position when the fate of the world is at stake. The Conservatives need to get serious about climate change, or accept losing elections as a general rule.”
Konrad Yakabuski (The Globe and Mail) on why the federal Liberals should be worried if Justin Trudeau stays: “For the first time as Prime Minister, Mr. Trudeau faces a Leader of the Official Opposition who possesses communication skills that rival his own. Mr. Trudeau benefited from comparisons with previous Conservative Party leaders Andrew Scheer and Erin O’Toole, neither of whom could hold an audience. In Mr. Poilievre, he faces an opponent who can draw a crowd. That has to be a major cause for concern in Liberal ranks. Mr. Trudeau won three consecutive federal elections against Tory leaders who were relatively weak or, in the case of former prime minister Stephen Harper, irretrievably weakened. After seven years in power, and a series of scandals on par with those of Mr. Harper’s government, Mr. Trudeau’s own popularity has plummeted.”
Tara McGuire (Contributed to The Globe and Mail) on how the drug overdose crisis is everyone’s problem: “In the years since Holden died, I have been extremely fortunate to receive an education. I read widely about the opioid crisis and absorbed as much as I could about how to become a writer. During that time, I wrote a book that I very much did not want to write. I considered trashing it many times, which would have been so much easier. But if I bailed, if I didn’t open up about Holden’s struggle and what his death has taught me, then I’d be just another person not talking about it. I’d be another person quietly perpetuating the stigma and shame that come along with substance use and misuse and their often-tragic ramifications.”
Pandemic protesters try making leap to politics in Manitoba's civic, school board races – CBC.ca
Fierce opposition to COVID-19 measures is reverberating through Manitoba’s upcoming municipal and school board elections.
It’s believed at least a dozen people on ballots in October are vocal critics of pandemic-era restrictions, some of whom gained widespread notoriety for their dissent.
Dick Eastland said running for a school board seat wasn’t something he seriously considered before the pandemic. He said discussions with others who rallied against the restrictions and vaccine mandates changed his mind.
“We have been talking about this a lot privately from person-to-person and trying to inspire each other, to show some strength,” he said.
“For a lot of people, they’re getting completely out of their comfort zone.”
This includes Eastland, whose own kids are out of school.
“There’s no reason for me to do this, except that I strongly believe that a lot of people felt helpless when it came to masking their children or vaccinating them.”
Eastland, who is looking to represent Ward 1 in the Pembina Trails School Division in Winnipeg, argues the current trustees are too willing to go along with the crowd rather than thinking for themselves. He wouldn’t be afraid to chart his own path, he said.
“My reputation isn’t at stake here,” Eastland said. “Me battling for families that are maybe getting run over by the machine, so to speak, that’s who I’m here for.”
Karl Krebs, who failed to turn Winkler, Man., into a sanctuary city immune from pandemic restrictions, actively encouraged like-minded people to run for office.
He told a restaurant full of his supporters in August that if enough of their people run, “this will be a memorable moment in the history book of Manitoba,” an online video shows.
He’s one of two people seeking to become mayor of the Winkler. Krebs will face Henry Siemens, a longtime councillor.
In an interview on Friday, Krebs said he hopes his own decision to seek office, and subsequent appeals to others, had the desired effect.
“We’re all in this to bring about change that will bring us back to where we were,” Krebs said. “Nobody is looking for a different community other than the one that we had two years ago, and that’s what’s been affected. We’ve seen the effects of mandates on businesses. We’ve seen the effects of promoting medical choices that people are not comfortable making.”
Krebs said one person he encouraged to run is his “good friend” Don Bouchard, who’s challenging councillor Jim Funk to serve as reeve of the RM of Hanover.
Bouchard attended rallies with convoy protest supporters where he’s done ministry and performed baptisms.
He said what’s broken in society is this tendency to believe there’s only one opinion, and other perspectives are wrong.
“People are allowed to be angry. They’re allowed to think differently. And if I’m offended, I have the problem.”
‘If I do get elected … things could happen’
Angela Anderson Johnson, who is among nine nominees vying for a single seat in Ward 5 of the Winnipeg School Division board, said she’s been branded online as an opponent of COVID measures and she’s been bombarded with critical comments since her name was listed on the ballot.
She said those remarks have empowered her.
“I can go to all the rallies and listen to them … but it’s not doing anything, right? Nothing’s changing. So I think if I do get elected to be a school trustee, I think things could happen.”
Todd McDougall is one of the five people convicted this summer for repeatedly violating COVID-19 public health orders.
He’s been part of discussions with friends and other supporters about seeking elected office, he said.
McDougall knows he’s garnered a reputation for his views on COVID-19, but said he doesn’t want voters in Ward 2 of the Pembina Trails School Division to “pigeonhole” him as a one-issue candidate. Three of the four hopefuls in that race will be elected.
He wants discussions with voters to be about “what’s happening in education right now,” McDougall said.
He hopes people afford that same opportunity to all candidates that may be portrayed as having fringe views.
Like him, Patrick Allard, who was also charged in court for flouting pandemic rules, wants more transparency on school board decisions and more opportunities for parents to have their say.
Allard is one of three people vying to become a trustee in Ward 8 in the Winnipeg School Division.
He’s happily encouraged people to run for office on social media, he said, but denies targeting a certain group of anti-mandate protesters with his messaging. If you’re frustrated with those in public office, you should get involved, he said.
“I was always told when I was young, ‘If you don’t like the laws, run for office and change them.'”
Christopher Adams, an adjunct professor of political studies at the University of Manitoba, said the path from protests to politics is well-travelled, no matter which end of the political spectrum they occupy.
“I think many people [who protested COVID measures] “got a taste of how enjoyable it was to be part of the media spotlight and to be in groups talking about issues of importance to them,” Adams said.
“It’s not surprising that these individuals would come forward and be part of a local campaign,” Adams said.
He added some of these candidates may not seriously think they can win. Meanwhile, those individuals hoping to gain power may have a better shot at school board elections, since they don’t generally garner much attention and any incumbents do not have much name recognition.
Election day is on Oct. 26.
Politics Podcast: Is Social Media Turning Us Into Political Extremists? – FiveThirtyEight
What effect is social media having on our politics and society more broadly? According to critics, we’re living through an unregulated era of social media that will one day look as outdated as tobacco did in its pre-regulation era.
In his new book, “The Chaos Machine: The Inside Story of How Social Media Rewired Our Minds and Our World” New York Times reporter Max Fisher explores how social media impacts the psychology of its users and changes how people think, behave and communicate.
In this installment of the FiveThirtyEight Politics podcast, Galen Druke talks to Fisher about his book and why he believes this is leading to social and political crises in the U.S. and around the world.
You can listen to the episode by clicking the “play” button in the audio player above or by downloading it in iTunes, the ESPN App or your favorite podcast platform. If you are new to podcasts, learn how to listen.
The FiveThirtyEight Politics podcast is recorded Mondays and Thursdays. Help new listeners discover the show by leaving us a rating and review on iTunes. Have a comment, question or suggestion for “good polling vs. bad polling”? Get in touch by email, on Twitter or in the comments.
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