Politics

1984, or why the ending doesn’t have to be so bad

For me, the main news item of last week was the report that George Orwell’s classic novel 1984 had again hit the best seller lists and was sold out in the US. This must be the most fitting summary of Donald Trump’s first week in the White House as US president. His actions can also be described by the words protectionism, exclusion and alternative facts. Companies have also come under direct attack and been threatened with taxes if they don’t shift more of their production to the USA. This is a previously unknown style of politics, indeed it is one that nobody had even believed possible. The new US president styles himself as a ‚doer‘ who wastes no time in fulfilling his election pledges. Politics by executive order might have great media impact in the short term, but it is not sustainable. It seems that very few of the executive…

Italy: After Constitutional Court ruling new elections are more likely as early as in

Yesterday the Italian Constitutional Court decided that parts of the new electoral law for elections to Italy’s lower house, the Chamber of Deputies, which came into effect as recently as 2016, are invalid. The court ruled that a core element of the new electoral law, a run-off vote between the two strongest parliamentary fractions, is against the constitution. However, the rule that any party attracting at least 40% of the vote should receive a majority-building bonus is to be kept. If the latter condition is not fulfilled, then the principle of pure proportional representation applies again. Taking account the amendments, the judges of the High Court declared the electoral law as applicable as of immediately so theoretically nothing would stand in the way of early new elections. The proponents of as early a poll as possible greeted the announcement with enthusiasm. In particular, the left-wing populist Five Stars Movement (M5S)…

British economy still unimpressed by Brexit vote in the fourth quarter

Is the British economy so resilient that it can “swallow” the Brexit shock without suffering any major impairment? One could well arrive at such a conclusion looking at the robust economic trend in Great Britain in the months since the referendum. In the fourth quarter of last year the pace of economic growth continued largely unabated. As the Office for National Statistics reported this morning, gross domestic product recently increased, as during the summer months, by 0.6 percent quarter-on-quarter. With last year’s growth rate of 2 percent the United Kingdom even took the lead among the G7 states as regards growth. These growth figures are “grist to the mill” of Brexit proponents, above all for those who are in favour of a “hard” break with the EU: against this background, the warnings about Brexit’s negative economic effects look like mere scare-mongering. Consumer-focused services made a particularly strong showing in the…

Path clear for a referendum on constitutional reform in Turkey

The Turkish lira started 2017 in exceptionally weak form and, with a loss of a good 9% against the euro, revealed the weakest performance of all the world’s major currencies. The lira is currently marking historic lows against both the euro and the US dollar. The prospect of the American Federal Reserve tightening its policy did not exactly help the Turkish currency either. However, the present weakness is currently being driven primarily by domestic factors. Not only is President Erdogan adopting a heavy-handed approach to dealing with his political opponents since last summer’s attempted coup, but governance measures, the uncertainty accompanying these as well as conflicts with radical groups regularly flaring up within Turkey have now left a visible mark. This extends both to the country’s economic performance as well as to its economic prospects. The central bank is also a part of this, having until now only reluctantly adopted…

Spain: Will the strong economic growth last

A good year ago, on 22nd January 2016, the first attempt to form a coalition failed in Spain. This was followed by a prolonged period of political gridlock. Many economic policy measures were shelved for the time being. Until today, even the budget for the current year 2017 has not yet been adopted. It took until October 2016 for the major parties to agree to tolerate a minority government led by former Prime Minister Mariano Rajoy. Since then, the political wheels have been turning at full speed. So far, though, the political deadlock does not appear to have visibly damaged the Spanish economy. Indifferent to all this, economic growth remains at a high level. Since the second half of 2014, strong quarter-on-quarter growth rates have been recorded in each quarter of between 0.6 and 1.0 percent. And for the final quarter of 2016, the indicators available until now signal renewed strong…

Parliament must have a say

The recent judgement delivered by the Supreme Court is unlikely to have taken Prime Minister Theresa May and her followers by surprise. Ruling by a majority of eight to three, the Court followed the arguments put forward by pro-EU campaigners and held it to be appropriate that the government seek parliamentary approval before submitting official notification to Brussels of its intention to start the process to leave the European Union. UK domestic law would change as a result of the UK ceasing to be party to the EU treaties and so must be authorised by parliament, the justices held. On the other hand, the Prime Minister is likely to be relieved that the Supreme Court did not rule that devolved parliaments and assemblies should have their say in the process. The ruling was widely anticipated in government circles and government lawyers had already prepared a skeleton Brexit bill. Nevertheless, the…

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