Italian Prime Minister has set the date for the constitutional referendum as late as practically possibly. It will be held on December 4. The issue is the perfect bicameralism that gives as much power to the Senate as the Chamber of Deputies.
There remains great uncertainty in the aftermath of the UK vote to leave the European Union. Few seem to have a plan for what Brexit will look like and how the UK’s relationship with the outside world will take shape.
In the aftermath of the Brexit tensions, Italy is defying Brussels to bail out troubled banks and preparing for constitutional referendum in October. If Prime Minister Matteo Renzi fails to achieve adequate support, economic destabilization will shift from the UK to Italy – which could pave way to the rise of anti-establishment left or right.
Despite Europe’s crisis turmoil, the Swiss growth engine seems even more resilient than before – perhaps not least because it has embraced the European Union, but not the euro.
The failed July 15 coup in Turkey has prompted a tsunami of responses by the government that is likely to have a lasting impact on all aspects of politics and society, including the economy.
Brexit caps off a turbulent decade for the EU. Many in the Eurozone will be hoping that it does not cause further economic turmoil, as it is becoming increasingly clear that the financial crisis of 2008-09 led to a substantial increase in poverty across the continent.
Not only did poverty intensify within those nations that were hardest hit during the crisis and required bailouts, but there has also been a dramatic change in the geography and types of poverty in Europe over the last decade.
Theresa May has come into office talking about people who are “just managing”, but find life tough. Similarly, then Labour Party leader Ed Miliband talked about the squeezed middle in the build-up to last year’s general election.
The European Court of Justice upheld the principle of making creditors bear the burden for investment in banks that sour before government funds could be used. Italian banks are particularly sensitive to the ruling, which cannot be appealed because the European Banking Authority and European Central Bank stress tests on July 29 are expected to show that some Italian banks are under-capitalized.
After last Friday’s failed coup attempt in Turkey, a measure of calm has returned to global markets. We did not think Turkish developments have wide-reaching implications for EM assets, but we do remain very negative on Turkish assets in the wake of the coup and ongoing political uncertainty.
Political Outlook
Reining in big business? Chris Radburn / PA Wire
The most radical proposal for the extension of workplace democracy in a generation has been made not by Labour leader, Jeremy Corbyn, but by Theresa May, the UK’s new prime minister.
Headed for number 11. Dominic Lipinski / PA Wire
Philip Hammond, the UK’s new Chancellor of the Exchequer, has a lot on his plate. He faces a slowing economy urgently in need of stimulus. He confronts tough choices over public spending and will be under pressure to reverse the austerity policies of his predecessor. The question for Hammond is not whether to stimulate the economy, it is when and how.
With Brexit, the pressure on Italian banks, and the surge and then sell-off in the yen, Spain may have been pushed off some investors' radar screens. There are three important developments to note.
The European Union, still nursing wounds from its crisis over the euro and “Grexit,” is facing a much more severe threat that strikes at the very heart of the EU’s legitimacy. In addition, the problem concerns the very measures put in place to resolve the earlier crisis, which nearly led to a Greece exit from the Eurozone.
The Tour de France is winding its way from the flat, windswept coast of northern France down through the Loire valley and the lumpy terrain of the Massif Central. So far, it has been a time for the bulky sprinters and the puncheurs who specialise in short, maximum efforts.
Sterling is continuing to move lower. It has tested the $1.3050 area in the North American morning, having been under pressure through the Asian session and the European morning. That the UK economy is slowing down, materially, as BOE Governor Carney said, is not really new news. Nor is the fact that the BOE reversed its previous decision to force banks to boost their capital buffers. This was anticipated last week.
Made in America. Morteza Nikoubazl//Reuters