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What's happening this week (11/02/19)


w/c Monday, 11 February – M5S set to try to regain relevance following Abruzzo disappointment


The results of the 10 February regional election in Italy’s Abruzzo region have provided the first actual indication of the relative strength of the two populist parties which make up Italy’s national government.


In the end M5S undershot their polling and received an average of 20% of votes cast across the individual candidates race and the party vote. This was down even on their performance in 2014, when they received 21.4% and well down on their general election performance in the region, when they received 40% of the vote. Lega, on the other hand, secured a vote well in excess of their polling in the region, at 27.45%. The right-wing coalition as a whole received 49% of the vote.


The results will maintain the prestige of Salvini and Lega ahead of the European elections. For Luigi di Maio the anemic performance by M5S will deepen his conviction that action is needed for his party to recover its relevance. This, though, could exacerbate strains within the government in Rome, as Di Maio has now said his party will continue to block a high-speed rail link with France, a project that Salvini is keen to have progressed. Beppe Grillo, the spiritual leader of M5S, is this week expected to come out against the rail link. The party is also set to unveil controversial European election campaign proposals, promising the end of the independence of the Italian central bank.


Monday, 11 February – Eurogroup to approve Philip Lane ECB nomination, while Lautenchslaeger is set to leave temporary empty chair at the SSM


Today’s Eurogroup which gets underway around 3pm Brussels time will examine the European Commission’s winter forecast and the results of recent post-programme surveillance missions to Ireland and Portugal. The Eurozone finance ministers will also consider the nominations made to replace ECB Chief Economist Peter Praet when his term ends on 31 May. Only one nomination has been made for the role – Irish Central Bank Governor Philip Lane. Consideration of Lane’s candidacy is likely to amount to little more than rubberstamping.


While Lane is set to follow a serene path to the ECB Governing Council, he will come at a time of tensions on the council itself. The current vice-chair of the Single Supervisory Mechanism (SSM), Sabine Lautenchslaeger, will complete her term on 11 February. The job must be filled by one of the six ECB board members, to be nominated by the ECB President Mario Draghi. However, Draghi has yet to make a nomination. There are already two seats on the SSM board that have been vacant since 2017, while a further vacancy will open next month with the scheduled departure of Ignazio Angeloni. This leaves open the possibility that major events – such as Brexit day on 29 March – could come round with only recently appointed SSM chief Andrea Enria actually occupying a place on the board.


Tuesday, 12 February – Debate on Dutch gambling bill to recommence, followed by Senate vote


The 5 February debate in the Dutch senate, on the remote gambling bill, was adjourned pending clarifications from the minister on a range of questions relating to the treatment of unlicensed operators and previous ‘bad actors’.


Following the Minister’s clarifications, the debate will recommence on 12 February. Despite this degree of pushback from the Senate, the expectation remains that the bill will be passed.


Wednesday 13 February – Sanchez government attempts to have parliament approve 2019 budget


The difficulties of Spain’s minority government in gathering sufficient votes for legislation have been evident in Pedro Sanchez’s efforts to pass a 2019 budget, which has been repeatedly delayed.


In order to persuade Catalan separatists to vote in favour of the 2019 budget Sanchez agreed to a long-standing separatist demand to appoint a facilitator for talks between the government and separatist parties. This move has backfired as the Catalans continue to withhold support for the budget while support for the far-right Vox party is on the increase. A mass rally was held in Madrid yesterday to protest Sanchez’s concession.


Sanchez has previously suggested that if he cannot get the budget through parliament, he will consider an election. Should he fail to secure support for the budget on Wednesday, speculation around an early election will intensify. Sanchez’s team are pushing for the superdomingo option which would see general, regional, municipal and European elections all take place on 26 May.


Thursday, 14 February – Brexit debate to be held in the Commons, but vote unlikely to take place


As we noted in our 7 February report, the unsurprising failure of Theresa May to win any new concessions on the Brexit backstop means that a ‘meaningful vote’ on her deal is unlikely to take place on Valentine’s Day. Despite the lack of a vote, a Brexit debate will still take place, followed by a Prime Ministerial statement on what progress has been made.


If soft-Brexit amendments are to be introduced, they are most likely to come from the Labour benches. It is entirely possible that Yvette Cooper will table a further amendment aimed at delaying Brexit in the event that a deal is not on the table. The more cohesive that the two parties are – and the Conservatives in particular – the less likely it is that amendments of this type will succeed.

It is also likely that the Prime Minister will be pushed to clarify during her statement whether an application will be made for an Article 50 extension. It is increasingly widely accepted that an extension will be required.

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