“Italeave” Odds Increase: Rebellion in Italy, Matteo Renzi’s PD Party to Split

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Published : February 21st, 2017
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Category : Opinions and Analysis

The Financial Times reports on the Rebellion that Threatens to Split Italy’s Democratic Party.

Eurointelligence goes one further and suggests it’s a done deal, not just a threat.

The immediate impact would be a loss of 6 percentage points, or more, support for PD, putting Beppe Grillo’s Five Star Movement solidly in the lead.

24hGold - “Italeave” Odds Incr...

In national polls, the PD is only slightly ahead of the Five Star Movement, an anti-establishment party which has called for a referendum on the euro. Any PD defection could make the difference in the next Italian general election, due within a year at the latest.

In the dissidents’ minds, Mr. Renzi is tilting the PD too much towards the centre in recent years, with reformist, pro-business policies that disconnected the party from the struggles of ordinary people. There are echoes of the message that drove Bernie Sanders’ Democratic primary campaign in the US and Jeremy Corbyn’s rise to the helm of Britain’s Labour party.

Walter Veltroni, who help created the PD as a mesh between former communists and left-leaning former Christian Democrats in 2007, warned that intraparty divisions had always been the “demon” of the Italian left.

But for the PD dissidents, the fault in any split would lie squarely with Mr. Renzi. And most of their fans in Testaccio, are convinced the divorce is inevitable.

“Renzi’s relationship with the country is broken. Globalization makes you feel like you are in the ocean, without seeing any docks, peers or the shore. The left needs to offer protection. People want to swim in a lake,” says Piero Lacorazza, a local politician and environmental campaigner from Basilicata.

Damage Assessment

Via email, Eurointellingence comments that a split is certain, and offers this damage assessment.

La Repubblica reports this morning that Renzi’s most formidable opponents – Enrico Rossi, governor of Tuscany; Michele Emiliano, governor of Puglia; and Roberto Speranza, the former PD leader of the chamber of deputies – co-authored a note last night after the Congress in which they said that Renzi had chosen division.

The split is now a done deal. Corriere della Sera reports that Bersani, Speranza, and other rebels, will not attend tomorrow’s meeting of the PD’s leadership, which will formally set up a commission to prepare for the leadership contest.

One of Renzi’s most quoted statements in his speech to the congress was that blackmail was worse than secession. It was unacceptable for the minority to overrule the will of the majority, he said.

Massimo Giannini, writing in La Repubblica, evokes the film Rebel without a Cause, with James Dean, and we note that is in many ways a fitting description for both sides of the divide in the party. The only certainty that stems from this is the destructive potential. As Goffredo de Marchis writes in La Repubblica: the rebels have altogether 38 deputies in the chamber, the largest part of whom are supporters of Bersani. They have few people in the Senate, but enough to form their group, elect a head for their group, and obtain funding.

An Ipsos poll in Corriere shows that a split of the party would reduce the support for the PD by between 4% and 6%, which would make it a clear second to the Five Star Movement. We think that this poll does not fully capture the dynamics of a split.

Euroscepticism on the Rise

PD is the only major political party that is solidly behind the euro. Moreover, Renzi’s coalition math will plunge with this split.

Numerous hurdles remain in place for Italy to abandon the Euro. Those hurdles include a constitutional referendum and public acceptance, but a clear path around those hurdles is now visible.

On February 3, I wrote Italy Increasingly Likely to Abandon the Euro. This split is another step in that direction.

Whether you label an Italian exit from the eurozone “Italexit” or “Italeave”, those who conclude it cannot happen are barking up the same tree as those who said Trump could never win and Brexit could not happen.

Mike “Mish” Shedlock

Source : mishtalk.com
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Mish 13 abonnés
Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. He writes a global economics blog which has commentary 5-7 times a week. He also writes for the Daily Reckoning, Whiskey & Gunpowder, and has over 80 magazine and book cover credits. Visit http://www.sitkapacific.com
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