Yesterday Matteo Salvini, Italy's far-right deputy prime minister, withdrew his support from the governing coalition, at the same time calling for a snap election. The move comes after months of fighting between the anti-establishment Five Star Movement and Salvini’s League Party. Tensions between the 14 month-old coalition leaders peaked in a row over the financing of a multi-billion euro high-speed rail link to France.
In a statement announcing his decision, Salvini said it was pointless continuing with the current government with all the quarrelling. ‘Let's go straight to parliament to say there is no longer a majority... and quickly go back to the voters’, he said, adding, ‘We do not want extra seats or ministers, nor do we want reshuffles or technical governments. After this government (which has done so many good things), the only thing is elections’.
Giuseppe Conte, the Prime Minister, naturally sees it a slightly different way saying that the interior minister does not just summon parliament. He told reports: ‘it's not up to him to dictate the steps of the political crisis’, calling on Salvini to ‘explain to the country and justify to the electorate, who believed in the possibility of change, the reasons that brought him to abruptly interrupt’. So, as it has been with Italian politics over the years, there is never a dull moment! However, we go from one set of politicians digging their heels in, to another set maybe showing they are listening.
ECB President Draghi has often called for governments to assist monetary policy with fiscal policy but this has over the past years has fallen on deaf ears, however, yesterday it appeared a move may be afoot in Germany. Reuters reported that a senior German official said that Berlin was considering a U-turn in fiscal policy whereby they are considering issuance of new debt linked to climate change. New debt issuance would be strictly linked to climate measures to avoid a budget floodgate episode. Later a Finance Ministry spokesman said that there was no decision to give up the balanced budget but we feel there is no smoke without fire, watch this space.
And to finish the week a Trump Tweet aimed at, yep you guessed it, the Fed. ‘We have the greatest companies…….in the world, there is nobody even close, but unfortunately the same cannot be said about our Federal Reserve. They have called it wrong at every step of the way and we are still winning. Can you imagine what would happen if they actually called it right?’ Oh dear no let-up for Chair Powell then.