Italian Interior Minister Marco Minniti. REUTERS/Alessandro Bianchi
Italian Interior Minister Marco Minniti. REUTERS/Alessandro Bianchi

4 September 2017 - Italian news for this week


READ MORE: Italy news this week - 18 September 2017


We resume our news bulletins, by reviewing the situation in Italy, which is still pretty much on holiday, and in Europe, while attempting to make sense of the sudden peak in madness of the North Korean leader, Kim Jong-Un.

Immigration: Minniti shuts off the Libyan route. A UN operation is urgently required

 At the end of July the Italian government had come to realise – far too late – that relations between Rome and Paris were now very unbalanced following the election of Emmanuel Macron to the French Presidency. During the course of just a few days, the French government had decided to block further works on the Turin-Lyon high speed rail link and informed Fincantieri that they were about to tear up the agreement reached over the acquisition of STX France by Fincantieri. Vivendi had announced that it now had management control over TIM, while Macron had invited the leader of the Libyan Presidential Council, Fayez al Sarraj and general Khalifa Hafter, the Cyrenaica strongman to Paris. The two had then signed a ten point joint statement in which Serraj, albeit generically, appeared to be giving in to Haftar's ambitions to the advantage of France, Egypt and Saudi Arabia and at Italy's expense. These events did however act as a wake-up call for Italy's management. The Minister for the Interior, Marco Minniti, strongly backed by Prime Minister, Paolo Gentiloni, and Republican President, Sergio Mattarella, immediately undertook a series of actions that in just a few weeks have reduced the scope of the French diplomatic offensive in Libya and seem, at least to some extent, to have turned the tables on them. The most painful issue, the wave of migration, has been addressed with speed and effectiveness, forcing French, German and Spanish non-governmental organisations to abide by a code of conduct which drastically curtails their capacity to carry migrants from the Libyan coasts to Italian ones. One ship leased by a German NGO has been requisitioned and its management sued for aiding and abetting illegal immigration: a warning towards all those NGO's who for months had been allowed to reach agreements with the Libyan immigrant smugglers. A few days later, the Libyan coast guard, trained and equipped by the Italian armed forces, announced a ban forbidding all foreign vessels from entering the Libyan salvage area. Ships defying the ban can expect their crews to be jailed and their ships impounded. The NGO's have protested, but in the meantime the number of migrants reaching the Italian coasts have dropped from the twenty thousand of August 2016 to the three thousand of the August of this year. The reduction of the migratory flow has also been fostered by the so called 48 Brigade: an armed militia occupying the city of Sabratha, which had previously been involved in the defence of the oil terminal at Melitah, and now patrols the coast, to thwart the departure of the smugglers. The UN's intervention is now required to monitor the fate of the migrants along the Libyan coasts, who will otherwise be abandoned to a very dramatic destiny.

Libya once again at the centre of the agenda, thanks to the migrants

At the end of August, the Minister of the Interior Minniti reached an agreement with the mayors of 14 Libyan towns: a network that includes the main coastal centres of Tripolitania as well as two important caravan hubs in the Fezzan region: El Gatrun, on the border with Niger, and Cufra, located south of Cyrenaica, at a point where the routes from Egypt and Chad converge. The agreement guarantees Italian funding for a whole range of local infrastructure, while the 14 mayors have undertaken to clamp down on human trafficking. Bolstered by this success, the Italian Prime Minister Paolo Gentiloni has received the important backing of the German Chancellor, Angela Merkel, who is not too fond of Macron's Napoleonic posturing. Thus on 28 August, at the Paris summit where Macron had invited the leader of Tripoli, Sarraj along with the heads of state and government of Germany, Italy, Spain, Chad and Niger, Italy was granted unconditional backing for its approach to Libya. Even Macron was forced to announce that "cooperation between Italy and Libya is the perfect example of what we want to achieve". The president's attempt to impose his own leadership on Libya has therefore failed. There's no doubt that the path towards the stabilization of the country is still very long and tentative, and Italy's influence over Libya is strongly disputed, as proven by the controversies raging over the Italian funding of the 48 Brigade (The Washington Post, 30.08.2017). In actual fact, the controversy does not just concern Libya. This state of affairs was also brought to light when the Gentiloni government sent its ambassador Giampaolo Cantini to Cairo, thus resuming normal diplomatic relations with Egypt. This decision immediately caused strong controversies and was accompanied by the "report" of the involvement of the Egyptian intelligence services in the barbaric murder of researcher Giulio Regeni (The New York Times, 15.8.17).

The economic recovery is gaining in strength

After the upward review of the Italy's estimated growth announced by the Bank of Italy and the International Monetary Fund, Moody's has also raised its forecast for the Italian GDP up to 1.3% for both 2017 and 2018. Good figures on industrial productivity (up by 5.3% in June compared to the same month of 2016); on exports (8% increase for the first six months of the year) and the general feeling of buoyancy denoted by companies and families (up from 105.6 to 110.8 in August). The latest ISTAT figures for employment produce contrasting reactions, seeing as the employed in July ìincreased by 1.3% over the previous year and now exceed 23 million people: a level that hadn't been witnessed since October of 2008. At the same time, youth unemployment is on the rise from 35.2% in June to 35.5% in July. This figure however seems to be a result of the economic recovery which is now convincing those who had given up looking for a job to make a more concerted effort. This is proven by the percentage of those who are inactive, which in July dropped to 34.4, the lowest level ever recorded. Hardly surprising then that the approval of the prime minister and minister of the interior is on the rise, despite the real problems they have had to face, such as the Ischia earthquake, for example, which fell just a few days after the first anniversary of the August 2016 quake in central Italy. An event that once again focused media attention on the difficult situation experienced by the homeless  - mostly still lodged in makeshift housing – and the failure to start reconstruction in the damaged towns, still piled high with debris. Even the evacuation of a large building occupied by Eritrean and Ethiopian refugees in the centre of Rome has led to much controversy, particularly among the left wing parties, which explains the very low profile approach to the whole matter shown by Minniti.

Padoan is preparing the Budget, Poletti is working on expenditure

The Finance Minister Pier Carlo Padoan is busy preparing the upcoming budget: a task that is made all the easier by the unexpected rise in growth, which for the year at hand should reach 1.4% of GDP. To further bolster the recovery, the minister is aiming to confirm the capital goods depreciation measures and n a new form of tax relief for newly employed youth. Where debt reduction is concerned, Padoan, backed by the Minister for Economic Development Carlo Calenda, is intending to go ahead with the sale of the 5G frequencies to telephone companies, which he hopes will raise two billion euro, and the sale of shares in major public companies to a vehicle controlled by the Deposit and Loan Fund. This last operation would guarantee compliance with the commitments undertaken with the EU Commission on the privatisation front, while retaining state control over "strategic national assets". At the same time, the ministers with stronger ties to the trade unions, in particular the Labour Minister Giuliano Poletti and the Education Minister, Valeria Fedeli are calling for greater expenditure. The former is keen that the minimum pension be raised to 660 euro for discontinuous employees while the latter has been guaranteed the hiring of 58,000 new public employees in the education sector.

A transition legislation

The Gentiloni government is obtaining major successes, while the secretary of the Democratic Party, Matteo Renzi, for the time being, doesn't seem to be in a position to affect his progress. Having received mixed reactions for his appearances at the Democratic Party celebrations and the presentation of his book, the former prime minister is keeping out of the limelight and has been letting his closest collaborators take centre stage, such as the undersecretary to the Prime Minister, Marie Elena Boschi, or the Chamber of Deputies PD whip, Ettore Rosato, who never fail to remind everyone of the achievements of the "One Thousand day government" and underline how the next budget will be the Gentiloni government's last. Renzi is still hoping that the legislation can be wound up quickly, soon to be followed by an electoral context which at this point would be held based on the current electoral laws in force for the Senate and the Lower House. His most recent idea is to stand for the Chamber of Deputies in a joint list with the Minister of Foreign Affairs, Angelino Alfano and the supporters of the former mayor of Milan, Giuliano Pisapia, in the hope of securing 40% of the vote and therefore the majority premium. At the Senate on the other hand, the PD secretary is aiming to form a coalition with the same forces, that might at least obtain a relative majority. Even if everything went according to plan for him, in all likelihood a government could only be formed with the support of Forza Italia. The problem at this point is that it looks very unlikely that the PD, along with Alternative Popolare and Pisapia's men can achieve more than 30% of the vote. This means that no clear political majority will be expressed by the ballot boxes and the next government will once again be engaged in a transition legislation.

A divided centre-left heading for defeat in Sicily.

If Matteo Renzi is hoping to vote in February at the latest, the President of the Republic, Sergio Mattarella, backed by Paolo Gentiloni and Silvio Berlusconi is hoping to delay the electoral appointment as long as possible: in April perhaps, and if possible in early May. The State President, in league with the Forza Italia leader is also hoping to modify the electoral law, falling back on the "German" proportional law, or the majority system that goes by his own name (Mattarellum), or even a proportional system with a majority premium for the winning coalition. All mechanisms which, for one reason or another, are not to Renzi's liking, who would rather everything stayed as it is. Once parliament reopens, work on the electoral law will resume in the parliamentary commissions, but it is unlikely that anything will come of it before the Sicilian regional elections, which at present are the focus of all political debate. In recent months, Renzi has avoided all involvement, in the hope of obtaining early elections before the vote on the island. In recent weeks, with the elections drawing ever closer, he has been forced to form an alliance with Angelino Alfano, whose party keeps losing many of its more representative figures: even the former Infrastructure Minister Maurizio Lupi is preparing to abandon ship and head back to the centre-right fold while the outgoing Regional President Rosario Crocetta is threatening to stand as an independent. Further to the left, the Democratic and Progressive Movement and Italian Left have reached an agreement on the candidacy of Claudio Fava as Sicilian president. The parliamentarian from Catania has no chance of being elected, but he will certainly drain votes from the DP candidate, the Dean of Palermo University Fabrizio Micari.

For now, Grillo's people, despite Virginia Raggi's poor showing as Rome mayor, seem to holding on to their political ascendancy, and are currently in the lead in Sicily with a 5 point margin over the centre-right. On 23 September, the 5Star Movement will hold its national convention in Rimini, to outline its program for government and announce its candidate for prime minister.

Forza Italia, the Northern League and Fratelli d'Italia are building a new centre-right coalition

The only real news on the political front is the rebuilding of the centre-right. The leader of the Northern League, Matteo Salvini, has become more cautious and abandoned the very divisive stance that he has held for the last year. Giorgia Meloni has reiterated her readiness to reach an agreement on the Sicilian regional elections, but is still insisting on presenting the candidacy of the Catania provincial president Nello Musumeci. Silvio Berlusconi and the Forza Italia coordinator in Sicily, Gianfranco Micciché have ended up giving in and accepted that the Palermo lawyer Gaetano Armao, founder of the Indignant Sicilian Movement, stand alongside Musumeci as vice president of the regional council. The reconstruction of the alliance is a very important achievement for Berlusconi and for the entire coalition, though at present it looks very unlikely that Musumeci can hope to beat the M5S candidate, Giancarlo Cancellieri. It has to be said that Sicily has often spawned surprise swing votes so making any kind of certain forecast would be unwise, but there's no certainty that Berlusconi, despite his direct involvement in the electoral campaign, can change the current balance of power. The former Environment Minister Stefania Prestigiacomo is calling for the centre-right to hold a program discussion in Palermo in October, in order to promote Musumeci's candidacy, but up to now the Forza Italia leader hasn't shown up in Sicily at all.

Economy and politics: the state of play in the TIM and Fincantieri gambits.

Between July and August, President Macron's popularity ratings dropped from 64 to 40%, and this decline has not stopped, essentially as a result of the much vaunted labour and tax reforms. The difficulties faced by the president do not however have much effect on France's impact on the international stage. this is proven by the activism displayed by Total which, just a few weeks after underwriting a major agreement for the exploitation of the vast Iranian South Pars gas field, has announced the acquisition of the Danish company Maersk Oil for 7.45 billion US dollars, thus becoming the second largest oil group in the North Sea. As for the match Vivendi, the French giant,  is playing in Italy, the Gentiloni government is assessing the possibility of applying the Golden Power ruling to TIM's land line network, and in particular to Telecom Italia Sparkle, the company that owns the international cable telecommunication network. The decision may be influenced by a positive solution to the shipyard issue. The French Economics Minister, Bruno Le Maire has let it be known that on Monday 11 September he will be in Rome to present a new proposal to Fincantieri. The plan prepared by the French envisages the expansion of the agreement to include the Naval Group, a publically controlled French company that is particularly strong in the military sector and the creation of a new entity that will encompass STX France and might involve joint shareholdings between the Italian and French naval groups. The idea is to set up a form of "Naval Shipyard Airbus twin", a solution that had already been suggested in Paris, though they tend to do all they can to retain the upper hand in all strategic sectors. It will certainly not be easy for Fincantieri and the Gentiloni government to reach an agreement on a new entity in which leadership will at least be equally shared.

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