Mattarella has just spoken. He confirmed the problem was over the appointment of the finance minister. He said he was open to a ‘political appointee’, not to someone who would sleepwalk Italy out of the euro. He concludes that arguing for ‘Ital-exit’ should be done openly. #Italy
+++ The 5 Star Movement is now reportedly considering an impeachment of Italy’s President Sergio Mattarella.
Why the appointment of Italy’s finance minister is so important. My @bopinion take from this week.…
+++ Mattarella has just summoned former IMF official Carlo Cottarelli tomorrow morning, presumably to ask him to form a government. This will be absolutely toxic for the anti-establishment parties. #Italy
Cottarelli was the head of the IMF fiscal affairs department and has since set up a watchdog of Italy’s public finance. Now compare and contrast that with a 5 Star/League government which wanted to increase borrowing by up to €125bn a year. Quite a contrast...
The League and the 5 Star Movement can easily derail any attempt by Cottarelli to form a new government by voting together against his government (they hold a majority). It’s hard to see how Italy will not face elections soon.
Meanwhile, the League and Silvio Berlusconi don’t back the 5 Star Movement’s calls for impeaching Mattarella. What if the past 10 days were just a ploy to try and win an outright majority for the centre-right at the next election? #Italy
(Just a thought: were Italy to hold a new election in the autumn, this would coincide with the last few months of ECB quantitative easing. Not a great prospect for Italy’s sovereign bonds...)
In an important @repubblica interview the League Salvini criticises Berlusconi for sounding like Angela Merkel and praises 5 Star leader Di Maio, says the past few weeks show they can work well together. Is this a prelude of things to come? #Italy
Full link here - (@repubblica)
If the League and 5 Star were to form a coalition, this would turn Italy’s next general election into a de facto referendum on euro membership. Of course, the two parties will deny it and say it is about ‘sovereignty’. #Italy

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More from @FerdiGiugliano

May 28, 2018
1 - There is a lot of confusion over why Italy’s President #Mattarella chose to veto Paolo Savona as finance minister, leading to the collapse of a possible 5 Star-League government. Here’s a short thread explaining what he said last night. #Italy
2 - The main problem was Savona’s explicit support for a ‘Plan B’ to leave the euro - which he did not withdraw before receiving the nomination. This plan had to be secretive, according to a set of slides he co-authored in 2015.
3 - If you are an investor in Italian bonds and you think the finance minister may have a secret plan to leave the euro, what you do? You sell your government bonds, as you fear you will be paid back in a less valuable currency (Lira). This causes a self-fulfilling crisis.
Read 9 tweets
May 15, 2018
+++ A copy of the draft 5 Star/League agreement (dated yesterday) has been leaked to @HuffPostItalia - I am going to tweet the most relevant sections. Full link below.…
1) Five Star and the League expect the @ecb to forgive 250 billion euros in Italian bonds bought via quantitative easing, in order to bring down Italy's debt
2) The two parties want to re-open European Treaties and to "radically reform" the stability and growth pact. The coalition would also want to reconsider Italy's contribution to the EU budget.
Read 13 tweets
Mar 5, 2018
Good morning all from Rome - as you can see I have opted for the large moka pot this morning. We will all need it! Here are a few thoughts on #Italianelections2018 after an extraordinary night.
1. There are two ways to look at this #ItalianElection2018. One is the electoral outcome: a badly hung parliament. The other is the political message: an anti-establishment triumph.
2. Let's start with the electoral arithmetics. It's ugly. None of the three blocs (Centre-right, Centre-left, 5 Star Movement) will be able to secure a majority. We will need some form of grand coalition, which, in a way is what we always expected.
Read 11 tweets

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