Economy

Why Italy's new president could make or break economy – BBC News

Published

3 years ago

January 25, 2022

Getty Images

MPs in Italy are electing a new president this week, a secret ballot that is usually hard to predict and this time is no different.

The head of the Italian state has limited powers, but the President does appoint a prime minister and can influence the government’s economic strategy and with a general election due early next year, a lot is at stake.

The next prime minister, probably heading a coalition government, must ensure the recovery of the economy continues.

The pandemic hit Italy hard, but it faced years of stagnation before that, and foreign investors hope the EU member state will stay on the path towards growth.

Economy at risk from political divisions

On Tuesday, following a second round of voting, which proved inconclusive, Italy’s conservative alliance proposed three possible candidates, leaving the centre-left parties to respond as parliament remains divided over a successor to President Sergio Mattarella.

The leader of the League, Matteo Salvini, told a news conference: “We are not here to impose anything on anybody.”

Critics of Italy’s political system, where governments are usually a coalition of different parties, may say the economy has dodged a bullet because the controversial former prime minister Silvio Berlusconi pulled out of the race at the weekend.

The current Prime Minister, Mario Draghi, a former head of the European Central Bank, is seen as the frontrunner to take up residence in the Quirinale Palace, once the home of Popes and Kings, but the favourite rarely wins.

As president he would have the power to appoint a prime minister, veto appointments to the cabinet and send legislation back to parliament for MPs to reconsider. These are powerful tools to keep reforms on track and could stop any future government from derailing the economy.

If Mr Draghi did become the next President of the Italian Republic, who would replace him as the prime minister and would the current political stability in Rome suddenly be in doubt?

Getty Images

Economy grows despite pandemic

At the start of the coronavirus pandemic the Italian economy suffered heavily, as the country went into a severe lockdown, but businesses are seeing good growth.

“The current government is a broad coalition led by former ECB President, Mario Draghi, and it’s not clear which kind of coalition might come out of the next general election, which is currently due in early 2023,” Paola Subacchi, Professor of International Economics at Queen Mary University of London, told the BBC’s World Business Report.

The health of the economy is tied to political stability and that has been achieved with Mario Draghi at the helm, she said.

Mr Draghi has successfully garnered cross-party support for the European Union’s recovery plan and created momentum for reforms and stronger financial discipline.

Italy is the largest beneficiary of the EU’s €750bn ($847bn, £627bn) recovery fund and it is expected to receive €191bn ($215bn, £160bn) in grants and loans.

Once in a generation opportunity

If Mr Draghi wins the race to become president, his success at creating political unity as Prime Minister, which led to positive momentum for the economy, could be undermined with new cracks appearing between parties which would be posturing ahead of the general election next year.

Forecasts of economic growth of about 4% this year are promising and compare favourably with the dramatic contraction of almost 9% in gross domestic product in 2020 as the country suffered from the shock of the pandemic.

Experts are saying Italy has a once in a generation opportunity for an economic reboot.

Valentina Meliciani, a professor of economics at Luiss University in Rome, said: “Political parties have different views about the direction of different economic policies for the future of the country.

“However political stability is really necessary for overcoming the pandemic and for making the best use of the resources that are now available from the recovery.”

She told the BBC World Service that “in the last year we experienced an exceptionally high rate of growth, more than 6% and also the forecasts for the coming year are quite positive.”

Political crisis?

Mario Draghi is not regarded as part of the Italian political structure and before being parachuted in to take over as Prime Minister in February last year, the economist and academic had been the President of the European Central Bank from 2011 to 2019. He is credited as saving the euro currency, which had been under threat during the eurozone debt crisis.

Lorenzo Codogno, a former chief economist at the Italian Treasury, is worried that if Mario Draghi wins the race to the Quirinale Palace the challenge to fill the vacancy in the Prime Minister’s office could cause a crisis.

“There might be political crisis because the parties might no longer be wiling to support the Draghi government and that would precipitate early elections,” he told the BBC.

“In a year that is so important for the EU recovery plan and Italy’s promises on reforms and investment losing five or six months of policy making is something that Italy cannot afford to do,” he said.

Economic recovery primary

The next Italian President will quickly have to start the process of creating political unity to ensure there are no major divisions that could torpedo economic policies.

Valentina Meliciani, from Luiss University in Rome, says foreign investors are watching the presidential election closely.

“A non-divisive president may play an important role in ensuring that the general interests of the country prevail over the specific interest of the different parties.”

“In order for our country to perform well in the long run and keep debt under control we need growth, in order to fulfil all these conditions, stability and competence in the President and Prime Minister are really essential,” she said.

It is worth remembering that role has not traditionally gone to a party leader and the favourite going into the race to move into the Quirinale often loses out.

Secret vote

The president is elected for a term of seven years by an electoral college comprising 1,009 people, mostly members of parliament, as well as senators and 58 delegates of Italy’s regions.

In the first three rounds of voting, the winner must secure at least a two-thirds majority, but from the fourth round, an absolute majority is enough.

Last month Mario Draghi issued a coded message to insiders in Rome that he was open to becoming president, describing himself as a “grandfather at the service of the institutions.”

Other candidates who may be in the race include a former premier, Paolo Gentiloni, the 67-year-old European Union commissioner for the economy

Those hoping to see Italy’s first female president may pay close attention to the current and former justice ministers, Marta Cartabia, 58, and Paola Severino, 73.

Adblock test (Why?)

Source link

Business

A timeline of events in the bread price-fixing scandal

Published

11 hours ago

September 19, 2024

Anne Joseph

Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.

Here’s a timeline of key events in the bread price-fixing case.

Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.

Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.

Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.

Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).

Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.

June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.

Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”

Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.

July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.

Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)

Source link

Economy

S&P/TSX composite up more than 250 points, U.S. stock markets also higher

Published

11 hours ago

September 19, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.

The S&P/TSX composite index was up 254.62 points at 23,847.22.

In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.

The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.

The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.

The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

Source link

Economy

Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

Published

1 day ago

September 18, 2024

Anne Joseph

VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

Source link