March 01, 2017

NEED TO KNOW

Eternal Stagnation

Greece’s perennial sovereign debt crisis and the chaos surrounding Brexit frequently overshadow Italy’s woes.

But it might be time to pay closer attention to what’s happening in Italy beyond the eruption of Mt. Etna on Sicily on Tuesday. An economic, rather than a volcanic, meltdown in the country could prove to be the Eurozone’s most life-threatening challenge to date.

That’s partly because the Italian economy – the Eurozone’s third largest – is roughly 10 times larger than Greece’s, noted the Hill.

Moreover, Italy’s big sovereign debt – worth over $2.5 trillion and held mainly in Europe’s fragile banks – means that an Italian debt default could be catastrophic to the global financial system, they added.

Others have already taken note of the danger Italy poses to Europe’s well-being.

Last week, the European Commission warned Italy to cut its public debt, calling it “a major source of vulnerability” that puts the country at risk of violating European Union budget rules. EU officials urged Rome to focus on cutting its deficit to shore up its finances.

But unfortunately Brussels had nothing on offer that could help Italy overcome the stagnation that has plagued its economy for more than a decade.

The Italian economy is failing to meet already dismal growth forecasts: Italian GDP expanded only by 0.2 percent in the fourth quarter of 2016, falling short of the 0.3 percent predicted by Bloomberg.

Those abysmally low growth rates will make it difficult for Italy to tackle any of its underlying problems, including high unemployment in the south.

They’re also starting to ripple through the political sphere, where populist parties are riding high on voters’ economic frustrations and increasing dissatisfaction with the mainstream.

Support for the euro, for example, has plummeted among Italians – previously some of its biggest fans – with only 41 percent calling the common currency “a good thing” in a recent survey, reported Reuters.

Support for removing Italy from the Eurozone is one of the only common threads between the xenophobic, right-wing Northern League and the left-wing Five Star Movement.

The populists might get a chance to argue their case before voters soon.

Hastily formed after ex-Prime Minister Matteo Renzi resigned after failing to convince voters to support a referendum on constitutional reform in December, the current European Democratic Party government is so fragile that snap elections are not unthinkable later this year, according to Stratfor.

To complicate matters, Renzi, who also stepped down as leader of the party last week, is allegedly scheming to have elections held this year instead of 2018 in a bid to reclaim power.

It’s a risky gambit, and one that could result in more instability if it instead leaves Italy with a populist government calling the shots.

WANT TO KNOW

When Reality TV Goes Wrong

The two women accused of killing the estranged half-brother of North Korean dictator Kim Jong-un were formally charged with murder in Malaysia on Tuesday.

No plea was recorded in the magistrates’ court as only higher courts have jurisdiction over murder cases. But after the charge was read out, one of the two suspects, Doan Thi Huong, said “I understand but I am not guilty,” in English, the BBC reported.

Doan Thi Huong from Vietnam and Siti Aisyah from Indonesia allegedly smeared a banned nerve toxin known as VX on the face of Kim Jong-nam in Kuala Lumpur airport on Feb. 13, in an attack that is widely believed to have been orchestrated by North Korean agents. However, both women have said previously that they were ignorant of the assassination plot, and thought that they were participating in a prank related to a reality TV show.

Malaysia has yet to decide whether to charge a North Korean man, Ri Jong Chol, who is also being held over the killing. Other suspects include a senior official at the North Korean embassy in Kuala Lumpur and a staff member of the state airline.

Peace Yes, Sanctions No

Russia and China vetoed a proposed United Nations plan to punish the regime of Syrian President Bashar al-Assad for using chemical weapons in the ongoing civil war.

While the Russians had long signaled their intent to block the resolution, which was backed by the US and many others, the veto showed that Moscow and Washington still differ widely on how to achieve peace in Syria despite President Donald Trump’s vows to improve diplomatic relations, the New York Times reported.

The resolution would have imposed sanctions on a handful of Syrian military officials who authorized the dropping of chlorine-filled barrel bombs on opposition-held areas on at least three occasions in 2014 and 2015.

The Kremlin’s move to block it was its seventh Security Council veto in defense of Assad since the war began six years ago. Before the vote, Russian President Vladimir Putin said sanctions aren’t appropriate given the progress being made toward peace, while his deputy defense minister said there’d been “enough talk about it” and it was time for the US and Russia to team up in the fight against the Islamic State in Syria.

Seven, Four, Three, Zero

The president of Italy commuted the sentence awarded to an American Central Intelligence Agency officer involved with the CIA’s so-called “extraordinary rendition” program Tuesday – paving the way for her to avoid imprisonment altogether.

Former CIA officer Sabrina de Sousa was convicted in absentia of kidnapping a radical Egyptian cleric in Milan in 2003 for interrogation at one of the agency’s so-called “black sites” – where waterboarding and other harsh techniques led to subsequent allegations of torture, the New York Times reported.

Currently living in Portugal, de Sousa had been battling extradition to Italy, where her initial seven-year sentence had been reduced to four years. By further reducing it to three years on Tuesday, President Sergio Mattarella paved the way for her to avoid spending any time behind bars, as convicts facing sentences of three years or less are eligible for alternatives to imprisonment such as community service.

“She’ll come to Italy to defend herself as a free woman,” the paper quoted de Sousa’s Italian lawyer as saying. “We’re very happy with the outcome.”

DISCOVERIES

T.G.I.F.

The Japanese are notorious for putting in punishingly long – and sometimes lethal – office hours, giving the country a woeful reputation for work-life balance.

But Tokyo’s army of salarymen are getting a bit of respite thanks to a government initiative asking companies to let workers call it a day at 3pm on the last Friday of the month.

It’s called “Premium Friday” and it’s meant to give Japanese employees a few extra hours of freedom to spend as they wish, be it with family, visiting a museum or starting the weekend early at one of Tokyo’s karaoke bars.

With the Japanese economy in a bit of a slump, officials are no doubt hoping workers use that free time by spending hundreds of millions of dollars in a shopping bonanza, wrote the Guardian.

The first Premium Friday held in February received mixed reactions, wrote the Guardian.

Still, it’s already attracting some high-flying devotees: Prime Minister Shinzo Abe said he would use his Premium Friday to meditate at a Zen temple before heading to a concert.