Tuesday, February 4, 2014

Italy’s Hot Political Climate: Anti-Euro Sentiment Mounting

From Nouriel Roubini's Roubini Monitor:
As we have discussed before, political tensions are still very high in Italy: The Democratic Party’s Enrico Letta (prime minister) and Matteo Renzi (party leader and mayor of Florence) are on a collision course, and the parliamentary majority supporting Letta’s government is now very thin, especially in the Senate. Additionally, spontaneous street protests, such as that of the pitchforks (anti-system sentiment from the radical right), are increasing and could find common ground with Beppe Grillo’s Five-Star Movement and former prime minister Silvio Berlusconi’s new anti-euro regeneration.
Given this background, the PD of recently elected leader Renzi will find it hard to position itself ahead of the European elections of May-June 2014. It cannot too openly embrace an anti-euro position, as this would directly work against Letta (previously the PD’s deputy leader), who is trying to maintain a line of fiscal discipline. But it also cannot ignore the social protests and risk a disastrous result at the European elections—the first poll under its new leader, and therefore a key test of his electoral appeal.

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