• Rome's Options in Budget Battle with Brussels

    In light of the European Commission’s rejection of its budget proposal, the Italian government essentially has three options: “cave quickly and fall into line with the EU’s demands, cave slowly, or take Italy off the cliff and leave the euro,” according to Megan Greene, managing director and chief economist for Manulife Asset Management.

    The Italian government’s initial reaction—to brush off Brussels’ concerns—has shown that “the cave quickly option is off the table now,” according to Greene.

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  • Rome and Brussels Go Head to Head in Budget Battle

    A budget proposal put forward by Italy’s populist government would create a prohibitively high deficit and has sharpened the conflict between Rome and the European Union.

    Despite warnings from Brussels, the ruling Italian coalition of La Lega and the 5 Star Movement submitted its 2019 budget proposal to the European Union (EU) on October 15. A combination of tax cuts, increased social spending, and a roll back of pension reforms will cause the deficit to jump from 0.8 percent to 2.4 percent of the gross domestic product (GDP), according to the government’s calculations. The proposal, which creates a deficit that is more than triple the level desired by the EU, has left investors jittery about the trajectory of the Italian economy.

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  • Oosterveld in Market Watch: Investing Markets are on High Alert Over Italy’s Budget and Debt Load

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  • When America First Meets Italy First

    US President Donald J. Trump may not find the ally he expects when he meets with the new Italian prime minister, Giuseppe Conte, in Washington on July 30.

    The two appear to have gotten along at the recent Group of Seven (G7) and NATO summits. At the former, Conte agreed with Trump that Russia should be invited back into the club of top industrial nations. His political masters in Rome—Conte is a figurehead, real power lies with the party leaders, Luigi Di Maio and Matteo Salvini—have gone so far as to argue that Western sanctions on Russia, imposed after it seized Crimea from Ukraine in 2014, must be lifted.

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  • How Europe’s Migration Crisis is Heating Up the Italy-Malta Relationship This Summer

    The recent election of Italy’s new populist government led by the anti-immigration Lega political party and the anti-establishment Five Star Movement has added extra heat to the Mediterranean’s already sweltering summer.

    Over the past few weeks, Italian Interior Minister Matteo Salvini, the head of the Lega party, followed through on his election promise of preventing migrants from entering into Italy and shut down the country’s southern ports to charity ships with migrants onboard.

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  • Oosterveld Joins The Warcast Podcast to Discuss Italy's New Coalition Government

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  • The G7 Summit in the Age of Trump

    As the world awaits the much-anticipated summit between US President Donald J. Trump and North Korean leader Kim Jong-un in Singapore on June 12, the president must first prepare for another important meeting: the G7.

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  • Italy is Too Big to Fail

    While the fundamentals of the Italian economy remain sound, the political uncertainty gripping the country has spooked markets. Tools created during the European debt crisis in 2009—such as the European Stability Mechanism (ESM)—are insufficient to support funding needs of the Italian sovereign and corporate sector for a sustained period of time. Interventions such as the ones deployed a few years ago by the ESM (and its predecessor, the European Financial Stability Facility) in collaboration with the International Monetary Fund (IMF) and the European Central Bank (ECB) for Greece, Ireland, Cyprus, Portugal, and Spain are not a viable option should yields on Italian debt continue to rise.

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  • Italy's President Keeps Populists At Bay

    Italy is, not for the first time, in political crisis. But this time, what happens in Rome could have a big impact on financial markets, the euro, and the longer-term future of the European Union as a whole.

    Sergio Mattarella, the country’s largely ceremonial president, took the unusual step on May 28 of vetoing a candidate for finance minister: Paolo Savona, an economist who considers the euro an instrument of German imperialism. Savona once wrote a plan for how Italy could “secretly” leave the single currency.

    Mattarella feared—not unreasonably—that Savona’s appointment could trigger a market panic.

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  • Oosterveld and Morales Salto-Weis in MarketWatch: Will Italy’s Next Government Try to Pull it Out of the Euro?

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