Italian Referendum: Lessons Learned

In an earlier comment we wrote that: “The ‘populist’ movement that inspired the raise of Trump and Sanders  may be about to surge through Europe. If so, it will change drastically the Continent’s political landscape in ways not seen since  World War II”.

In Italy, the last polls published before Sunday’s referendum showed a widening opposition to Prime Minister Matteo Renzi’s proposed constitutional reform package. Although there were rumors that the contest had tightened up in the last two weeks, when polls could not legally be published, the government ultimately lost by a wide margin. Just under 60 percent of the Italian electorate voted against Renzi’s package, whereas just over 40 percent supported it (turnout was a historically high 65.5 percent.) Renzi, speaking just after midnight on Monday morning, acknowledged defeat. He thanked the country for its involvement in the debate and for the high level of participation. He also made it clear that he would tender his resignation.

Italy now needs a new government and likely some electoral reform.

Italy’s biggest problem, however, is not debt, economics, or even immigration. It is the widespread disillusionment of Italy’s youth. The most striking revelation to emerge from public opinion polling prior to the referendum was the extent to which young people feel excluded from the political system. Macro Advisory Partners, a London-based consulting firm, found in its final pre-referendum poll that opposition to Renzi’s reforms was strongest among the youngest voters. Fifty-eight percent of Italians between ages 18 and 24 said that they rejected the constitutional reform package, as did 51 percent of Italians between 25 and 34; opposition among students was 59 percent. The youngish Renzi had hoped that the youth would throw its support behind his “hope and change” message of reform. In reality, however, they were more likely to support Beppe Grillo and his populist Five Star Movement.

Young Italians have good cause for disillusionment. Despite the fact they are, on average, more educated than their parents are, many are under- or unemployed and still live in the homes they grew up in. Tackling this disillusionment, which is leading to an exodus of youth from the country and a decline in participation among the mainstream political parties, needs to be the next government’s top priority.  If Italy’s political leadership cannot promise the rising generation better material circumstances or real political engagement, it, and the rest of Europe. will soon have to face the consequences.

Energy issues dominate the hearing schedule in Congress this week.

A House and Senate conference committee on comprehensive energy legislation is scheduled to meet formally for the first time on Thursday. Members will be working out the differences between their two versions of legislation that could be the first update to federal energy policy since 2007. The Senate passed its bill with overwhelming bipartisan support in April, while the House narrowly passed its own version of energy modernization legislation on a party-line vote, meaning there will be significant issues for the conference committee to work through this fall.

The House Energy and Commerce Subcommittee on Energy and Power is scheduled to meet on Wednesday to review the Federal Power Act, particularly the Federal Energy Regulatory Commission and electricity markets over the past 20 years.

There are two House Foreign Affairs hearings scheduled on Thursday afternoon that are focused on energy markets. The Foreign Affairs Subcommittee on the Middle East and North Africa will hold a joint hearing with the Energy Subcommittee of the House Committee on Science, Space and Technology to discuss energy resources in the Eastern Mediterranean. The Foreign Affairs Subcommittee on Asia and the Pacific is also scheduled to meet to discuss opportunities to advance U.S. energy policy in Asia, particularly the region’s dependence on liquefied natural gas from the United States and the economic and security interests involved.

On Friday morning, the House Oversight and Government Reform Subcommittee on Transportation and Public Assets will hold an oversight hearing on the Federal Emergency Management Agency’s response to the devastating flooding that occurred in Louisiana in August. The agency has approved more than $100 million in disaster relief grants for flood victims, but Congress may be asked to provide additional emergency funds to assist with the recovery effort.

While not Energy related per se., on Thursday, the House Financial Services Subcommittee on Oversight and Investigations will meet to discuss the Obama administration’s $400 million cash payment of U.S. taxpayer funds to Iran that has been linked to the release of several U.S. hostages. The payout has come under intense scrutiny, particularly from congressional Republicans. The hearing will focus on the $400 million cash payment and the implications on U.S. efforts to inhibit terrorism financing.

The Iran payout is also the subject of a hearing in the House Judiciary Committee on Wednesday. The Judiciary Subcommittee on the Constitution and Civil Justice is scheduled to hold an oversight hearing on the lack of transparency on money from the Judgment Fund, a permanent Treasury Department account used to pay judgments and claims against the United States.

Senate Panel Reaches Deal On Iran Sanctions Bill

The chairman of the U.S. Senate Foreign Relations Committee on Tuesday announced a bipartisan agreement allowing Congress to review any nuclear agreement with Iran, rejecting pleas from the White House that congressional action could derail ongoing international negotiations.

Under the compromise Iran Nuclear Agreement Review Act, Congress would have 30 days to review the nuclear deal, and President Barack Obama would have 12 days to sign off — or more likely veto the proposal — with Congress granted an additional 10 days to consider an override vote. The measure would also require the administration offer regular reports on Iran’s support of terrorist groups and other activities.

“This puts in place a process — the administration is still fully free to go ahead and complete its negotiations — but as it relates to the sanctions, that again Congress put in place, it has to lay before us; we have the ability to look at every detail,” Corker told Bloomberg TV. “Those congressional sanctions cannot be waived until Congress completes its work.” (Credit: AP).

However, despite bipartisan support for the agreement, the White House has repeatedly promised to veto any attempt to rein in Iran’s nuclear program, arguing that it could undermine a still-unfinished agreement announced by the U.S., Iran and other world powers in early April.

“The sanctions that we put in place helped make this opportunity possible. But let me be clear: If this Congress sends me a new sanctions bill now that threatens to derail these talks, I will veto it,” Obama said in January. “For the sake of our national security, we must give diplomacy a chance to succeed.” (Credit: AP).

Under the current Iran deal framework, the country would reduce the number of centrifuges in operation by at least two-thirds and convert the centrifuges at its Fordow facility to research and other applications, according to the White House.

In exchange, the European Union would lift its nuclear-related sanctions in a phase-out period, with the framework of the separate U.S. sanctions remaining in place for a possible snapback, according to the statement.

In order to ensure Iran’s compliance with the deal, International Atomic Energy Agency inspectors will have access to Iranian nuclear facilities, its supply chain and mining facilities. The deal faces a June 30 deadline.

House Sends Keystone Approval Bill To President Obama

The U.S. House of Representatives on Wednesday passed a bill that would force the federal government to approve TransCanada Corp.’s controversial Keystone XL oil pipeline, a move President Barack Obama has warned he will Veto.

Republicans in the House with some Democratic support pushed through the bill, that the Senate passed two weeks ago. The Senate’s road was much tougher, with the passage process drawn out as Democrats fought unsuccessfully to stall it. As the Keystone bill now now heads to Obama’s desk, it is doubtful the Senate will be able to muster the 67 votes needed to override the president’s veto.

The measure passed by a 270-152 vote, with 29 Democrats joining 241 Republicans in voting for passage and one Republican joining 151 Democrats who opposed it.

Obama has based his opposition to the pipeline on a variety of issues, including state court litigation and the U.S. State Department’s ongoing review of TransCanada’s application.

Comments from various federal agencies recently have been submitted to the State Department, including from the U.S. Department of Defense, which said it has no problems with the pipeline. The U.S. Environmental Protection Agency, however, said the State Department should reconsider its supplemental final environmental impact statement. And the State Department previously found that approving the pipeline would not have much of an effect on GHG emissions.

The Keystone bill dominated the first few weeks of the new Congress and prompted a wide-ranging discussion of its benefits and drawbacks. Before the Senate voted, it took up a dozen amendments to the legislation, passing only one concerning energy retrofitting for schools. Democrats had refused to end debate on the bill until all pending amendments had been voted on.

Some of the other failed amendments included removing land from consideration as wilderness areas unless Congress acts on them within a year; campaign finance disclosure requirements for companies that stand to make more than $1 million from the tar sands; removing the lesser prairie chicken from the threatened species list and speeding up the approval process for liquefied natural gas exportation to World Trade Organization members.

Keystone XL is intended to carry tar sands crude oil from Alberta, Canada, to the Gulf Coast, with a southern 485-mile portion of the proposed span running from the crude market hub at Cushing, Oklahoma, to refineries near Port Arthur, Texas, having already been approved.

The pipeline still faces a snag in South Dakota, where a project permit expired last June. TransCanada is currently pursuing a recertification of the permit but has been met with firm opposition by local environmental and community groups.

Greek Syriza Party Leading in Polls Ahead of Today’s Election

Greek Syriza Party Leading in Polls Ahead of Today’s Election

Greek Syriza Party Leading in Polls Ahead of Sunday’s Election… The left-leaning Syriza party looks poised to take control of parliament in Greece.

What it means — As mentioned last week, Alexis Tsipras, the leader of Syriza, has toned down his calls for dramatic change as the elections get closer. But he is still advocating for reversing many of the austerity measures currently in place and reducing the debt that Greece owes to outside lenders.

The Troika of lenders who bailed out Greece — the ECB, the International Monetary Fund (IMF), and the European Commission — have drawn a line in the sand. They demand Greece maintain all austerity measures and make good on their debt. The IMF leader, Christine LaGarde, stated that: “A debt is a debt,” which is just a touch hypocritical since she helped orchestrate Greece’s write down of bonds three years ago, costing private investors hundreds of millions of dollars.

If Syriza wins on Sunday, the question is will Tsipras use the possibility of Greece leaving the euro to extract some reduction in the debt Greece owes. This seems the most likely scenario. The Troika would much rather “assist” Greece by easing repayment terms or reducing their debt outright than create a precedent by which a country leaves the euro.

Greece fails to elect a President in Three Attempts

Greece fails to elect a President in Three Attempts… The New Democracy Party suffered a setback when its candidate for President fell short of the votes necessary for election.

What it means — After three attempts, the Greek political process calls for a snap election, which at this point favors the far-left leaning Syriza Party. This group has called for renegotiating the terms of the Greek bailout, demanding cuts in what is owed to the European Central Bank (ECB) and other creditors, and restoring social payments.

The possibility of Syriza gaining control of Greece sent that country’s stock market tumbling and yields on Greek debt soaring. Greek 3-year bonds now yield more than 12%. The troika that provided the bailout to Greece has suspended all payments until the country’s political situation is stabilized. If Syriza takes control, the possibility of Greece exiting the euro would be back on the table.