On Sunday, Italian citizens voted on Italy’s referendum to remove power from the senate. If it passes, the reform would require proposed laws receive approval from only the lower house of parliament. If it fails, Prime Minister Matteo Renzi has promised to resign his post. But what else happens as a consequence of a no result?
Italy’s Referendum A Nightmare Waiting To Happen In EU
Italy’s vote Sunday has the potential for a bigger impact on the European Union than even Brexit did. The country is voting on whether to streamline the government voting process or leave the Italian senate with its powers. Italy is the fourth largest economy in Europe, and a big part of the EU. Now, after Brexit, and following Donald Trump’s victory in the U.S. presidential race, the Italian referendum could be a pivotal domino in what happens next for the EU. What happens if voters say no?
Matteo Renzi, Italy’s Prime Minister, took power three years ago on a promise of reform and renewal. A no vote would bring about Renzi’s resignation. That would bring the Five Star Movement to power. The Five Star Movement (M5S) is a coalition which wants to leave the European Union. Basically, a no vote means uncertainty for not only Italy, but the European Union as a whole, and global markets as a result of that.
Analysts predict a 60 percent chance of a “NO” result. Such a turnout would mean trouble for Italian banks, many of which are already leaning towards insolvency. One of Italy’s leading banks, Monte dei Paschi di Siena, is planning to sell new shares days after the vote to shore up its balance sheet. But a “no” vote would scare away investors worried that political turmoil could undermine the already shaky balance sheets of Italian banks. While a “NO” vote just leaves the constitution as it currently is, that’s bad news for banks and also the Euro, as Renzi’s replacement would most likely be the M5S’s leader, who would then propose a referendum to leave the EU, throwing the Euro’s survival into doubt and triggering a reaction in global markets.
Here’s a news report from The National regarding Italy’s referendum:
For the sake of Italy, the EU, and markets around the world, people should all be rooting for a “YES” vote.
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Pelosi Sets 48-Hour Stimulus Deadline, Trump Says ‘She’s Holding It Up’
Despite repeatedly being the roadblock to a new stimulus bill, House Speaker Nancy Pelosi has set a 48-hour deadline to reach an agreement on a new package before the November 3 election.
Pelosi said yesterday that she was “hopeful” a deal can be reached, despite her unwillingness to compromise on a package. This is something that has drawn the ire of her fellow Democrats.
“The 48 only relates to if we want to get it done before the election, which we do. But we’re saying to them, we have to freeze the design on some of these things. Are we going with it or not and what is the language? I’m optimistic because, again, we’ve been back and forth on all of this,” she said during an appearance on ABC’s “This Week.”
Drew Hamill, Pelosi’s deputy chief of staff, said during an update on Saturday that Pelosi and Treasury Secretary Steve Mnuchin still can’t reach an agreement on a few items. These include “additional measures to address the virus’ disproportionate impact on communities of color.”
“There remains an array of additional differences as we go provision by provision that must be addressed in a comprehensive manner in the next 48 hours,” Hamill added. “Decisions must be made by the White House in order to demonstrate that the Administration is serious about reaching a bipartisan agreement that provides for Americans with the greatest needs during the pandemic.”
Disagreements on Small Details
Millions of American families would benefit most from another round of direct stimulus payment. However, once again, Pelosi is holding up a deal for a few smaller details.
“The tracing part is so important, because communities of color had been disproportionately affected by this,” Pelosi said. “We had pages and pages of how you would do this in the minority community. They crossed it all out.”
Mnuchin said last week that the Trump administration has agreed to allocate $178 billion overall for health. The administration also agreed to allocate $75 billion for contact tracing and testing. He said that the issue is being “overblown.”
“What we have been focused on is the language around testing,” he said. “When I speak to Pelosi today, I’m going to tell her that we’re not going to let the testing issue stand in the way. We’ll fundamentally agree with their testing language subject to some minor issues. This issue is being overblown.”
President Trump said last week that Pelosi is stalling to try and hurt his reelection chances.
“Nancy Pelosi doesn’t want to give anything. She thinks it helps her with the election. And I don’t think so. I think it hurts her with the election because everyone knows she’s holding it up. We’re not holding it up. She’s holding it up,” said President Trump.
Efforts to approve a smaller, more targeted bill will continue this week with Senate Majority Leader Mitch McConnell holding a vote on a bill that would include money for schools, liability protection for businesses, and boosted unemployment benefits.
Democrats Unwilling To Compromise On Stimulus, Says Treasury Secretary
Despite concessions from White House and Republican leaders, we are no closer to another stimulus bill. Also, at least one Republican leader more than three weeks may pass by before both sides meet again.
Talks once again broke down over the weekend. This happened despite efforts by Senate Republicans to sweeten the deal. They hoped to get the Democrats on board and ready to approve a new stimulus bill.
The latest offer from the White House for $1.8 trillion in relief funds is almost twice what they originally offered. Despite many concessions to Democratic demands, House Speaker Nancy Pelosi continues to do everything she can to hurt American families by refusing to sign on to the package.
Republicans agreed to add nearly $800 billion in relief funds to their original $1 trillion offer. Despite this, however, Pelosi said it still wasn’t enough. She called the latest round of negotiations “one step forward, two steps back.”
“When the President talks about wanting a bigger relief package, his proposal appears to mean that he wants more money at his discretion to grant or withhold, rather than agreeing on language prescribing how we honor our workers, crush the virus and put money in the pockets of workers,” she added.
Naturally, she wants more money for state and local governments. It will sit on her hands and let hard-working families suffer until she gets her bailout money.
A Letter to Congress
Treasury Secretary Steve Mnuchin and White House Chief of Staff Mark Meadows wrote a letter to Congress yesterday. It mentioned that House Democrats simply didn’t show any intention to compromise and pass a stimulus bill. They have asked Congress to vote on a separate bill to extend the Paycheck Protection Program funding. This provides loans for small businesses that can be converted to grants if certain conditions are met.
“Now is the time for us to come together and immediately vote on a bill to allow us to spend the unused Paycheck Protection Program funds while we continue to work towards a comprehensive package,” they wrote. “The all-or-nothing approach is an unacceptable response to the American people.”
Larry Kudlow, President Trump’s top economic advisor, said during an interview yesterday that the president is willing to provide even more relief money than what the Democrats are asking for on specific targeted areas. This serves as something Kudlow has repeatedly mentioned in previous interviews.
President Trump, during a radio interview with Rush Limbaugh, said “I would like to see a bigger stimulus package, frankly, than either the Democrats or Republicans are offering.”
Senate Majority Leader Mitch McConell has his doubts an agreement can be reached before the November election. He believes this primarily because Democrats are doing everything they can to paint President Trump in a bad light ahead of the elections, even if it means ruining the economic recovery.
“The situation’s kind of murky,” he told reporters. Currently, Democrats continue to try and “elbow for political advantage” as Americans head to the polls in a few weeks.
“I’d like to see us rise above that like we did back in March and April, but I think that’s unlikely in the next three weeks,” he said.
Report: CEOs Pour More Money Into Trump’s Campaign, Wall Street Picks Biden
When it comes to well-heeled leaders of S&P 500 companies, it’s clear who they want to sit in the White House for the next four years. This is going by how much money they pour into a candidate’s campaign.
According to the analysis by MarketWatch that looked at the Federal Election Commission data, 15 CEOs that lead an S&P 500 company have donated a total of $2.489 million to President Trump’s reelection campaign, either through his principal campaign committee, its joint fundraising groups with the Republican National Committee or pro-Trump super PACs.
Meanwhile, the campaign of Democratic nominee Joe Biden has a mere $536,100 in contributions to his main campaign committee. This includes its joint groups with the Democratic National Committee or pro-Biden super PACs from more than 30 CEOs.
President Trump’s largest donors include Intercontinental Exchange’s Jeffrey Sprecher and Las Vegas Sands’s Sheldon Adelson, a longtime GOP donor. The list also also includes Vornado Realty Trust’s Steven Roth and Oracle’s Safra Catz.
Disney’s Bob Iger, who is currently the entertainment company’s executive chairman Amphenol’s Richard Norwitt, DuPont’s Edward Breen, Merck’s Kenneth Frazier and Vertex Pharmaceuticals’s Jeffrey Leiden were the largest donors to Joe Biden’s campaign.
Michael Beckel, research director at Issue One, says the donations could be a sign that corporate America prefers Trump’s tax cuts to Biden’s promise to raise taxes.
“Some corporate executives may see their political contributions as good investments in policies that will benefit them,” Beckel told MarketWatch in an email. Many of them “see themselves as having a fiduciary responsibility to be active in politics.”
Wall Street Putting Money on Biden
Interestingly, while Trump is gathering larger donations from corporate America, Wall Street is pushing more money towards the Biden campaign.
According to OpenSecrets, which bills itself as a center for responsive politics, employees from Goldman Sachs have contributed $156,584 to Biden’s campaign. This is compared to only $11,943 to the Trump reelection campaign.
JPMorgan Chase has raised $379,057 for Biden, versus only $86,083 for President Trump’s campaign. Meanwhile, Morgan Stanley employees have contributed $257,821 to Biden’s campaign and $96,010 for Trump.
Beckel also acknowledges that some CEOs may face criticism for their political beliefs. In particular, it received criticism when it comes to supporting our President.
He says the CEOs are contributing “based on their own political preferences and ideological leanings,” even if the contributions could “carry some risks for companies. An executive’s giving could turn off a segment of customers from their brand, and even lead to protests or boycotts.”
Bruce Freed, president of the Center for Political Accountability, agrees with Beckel that contributions can also backfire in today’s climate.
“Companies today face very serious risks — both reputational risks and bottom-line risks — for contributions that companies are making,” Freed said in a recent interview. He said these may happen particularly if the donations “conflict with their core values and positions.”
“All of these things have made political spending much more controversial for companies and executives — and much riskier,” he said.
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