Wheels falling off government in Britain and Italy

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Oct 14, 2022 View in browser   By Ryan Heath Follow Ryan on Twitter | Send tips and insights to rheath@politico.com The wheels are falling off Britain's new government today, and there are signs a similar problem may be emerging in Italy for Giorgia Meloni, the putative winner of a Sept. 25 snap election who is yet to form a government. GLOBAL RISKS AND TRENDS U.K. — TRUSS FIRES HER FINANCE MINISTER: Prime Minister Liz Truss has fired Kwasi Kwarteng as chancellor, in a bid to save her imploding government. Truss will give a press conference later today, amid reports of another imminent U-turn on significant parts of her plan to cut taxes. Kwarteng was forced to leave an IMF gathering of finance ministers Thursday night as the political storm brewed. The government had already been forced to ditch an unfunded tax cut for high income earners, and is now expected to ditch an announced corporate tax cut. Truss' decision was an effort to cut off possible market chaos from 11 a.m. ET, when the Bank of England will end a bond-buying spree which was started to stabilize markets. That's after markets went into free-fall after a recent government announcement about the unfunded tax cuts. More in London Playbook. More chaos just below the surface:  — Plummeting polls: Truss is now as unpopular as John Major at the 1992 depths of his unpopularity: just 16 percent approve of her performance per Morning Consult, while 71 percent disapprove. — Party rebels: The Cabinet is split over whether to decouple welfare payment increases from inflation, and Conservative rebels are operating a smartphone spreadsheet collecting their grievances, in a sign Truss is still in deep trouble. — Civil service politicized: Truss this week vetoed Antonia Romeo as Treasury chief. Romeo, a polarizing figure for a notionally behind-the-scenes civil servant, had been lined up for the job after Tom Scholar was fired on the first day of the new government. — Britain's new electoral map: A crop of Conservative MPs will move from safe to toss-up seats under this independent redistricting process, increase pressure on those members of Parliament to stand up to Truss in hopes of saving their own careers. —  U.K.— India trade deal in peril: Immigration minister Suella Braverman slammed Indian migrants as persistent visa overstayers, generating a sharp backlash in New Delhi. 30,000 FOOT VIEW: Forget policy details and party labels for a moment and step back to look at the U.K.'s problems in the context of its late-stage identity crisis. The country has lost its connective tissue, Queen Elizabeth II, and was told Prime Minister Boris Johnson had to go because his ethical lapses could not be tolerated, even by his own party. Instead of working to project a sense of calm and continuity into this vacuum the new government decided to be as disruptive as possible, without any mandate from the public. So much for the national slogan "Keep Calm and Carry On." BY THE NUMBERS — 118 : That's the number of days in office of the shortest-serving British prime minister. Truss has 80 days to go to beat that mark. ITALY — TROUBLE ALREADY BREWING FOR MELONI: President Sergio Mattarella will start consultations with the parties today and is expected to give a mandate to Giorgia Meloni to form a government. Meloni has said she aims to win approval for her ministerial slate by Oct. 24. But there's trouble brewing for Meloni: On Thursday, her Brothers of Italy party colleague, Ignazio La Russa — a collector of fascist memorabilia — was confirmed as the new speaker of the Italian Senate without the support of Silvio Berlusconi's center-right Forza Italia party, which is meant to be on Meloni's side. Hannah Roberts has the story. Meloni's next pressure point is finding a finance minister that keeps both investors and voters calm. Fabio Panetta, Italy's board member at the European Central Bank, already turned down the offer. Antonio Tajani, Berlusconi's long-time right-hand and former European Parliament president, is set to get the top diplomatic job as foreign minister.   SUBSCRIBE TO POWER SWITCH: The energy landscape is profoundly transforming. Power Switch is a daily newsletter that unlocks the most important stories driving the energy sector and the political forces shaping critical decisions about your energy future, from production to storage, distribution to consumption. Don't miss out on Power Switch, your guide to the politics of energy transformation in America and around the world. SUBSCRIBE TODAY.     NATO VS. CSTO  NATO RAMPS UP AIR DEFENSE: While allied defense procurement will never be quick enough to satisfy Kyiv's requests, NATO continues to take steps to speed-up and strengthen its cooperation. This week Washington has said it would speed up delivery of its NASAMS air defense system and Germany has sent the first of four IRIS-T SLM air defense systems. NATO chief Jens Stoltenberg announced Thursday that NATO will "shortly" deliver counter-drone equipment to Ukraine, including "hundreds of drone jammers." Additionally, 14 members of the alliance — plus Finland, which is about to join — announced an ambitious effort to build a new, interlinked missile defense system that spreads across the continent. NATO is also developing a 10-year plan to rebuild the Ukrainian defense industry, with the first meeting between the alliance and Kyiv slated for next week. DIVIDED CSTO CAN'T EVENT CONDUCT DRILLS: The Russia-led Collective Security Treaty Organization is suffering increasing divisions. On top of Kyrgyzstan canceling joint military drills between the six nations, less than a day before they were due to start on its territory Monday, the group split in a U.N. General Assembly vote to condemn Russia's attempted annexations of Ukraine territory. Meanwhile, Kyrgyzstan and Armenia are openly expressing irritation at the bloc's failure to mobilize to quel deadly border violence, with fellow member Tajikistan and former member Azerbaijan, respectively. MORE SANCTIONS PRESSURE ON RUSSIA:  Seeking a second diplomatic victory of the week — after Western diplomats succeeded in getting 143 U.N. members to condemn Russia's annexation gambit —  there's an extraordinary meeting takes place today among NATO allies with the goal of identifying spots in Russia's military industrial complex that the alliance can economically strangle. The goal is to undercut Russia's ability to rearm. Deputy Treasury Secretary Wally Adeymo explained the strategy to Alex Ward. Turkey's each-way bet: A day after voting to condemn Russia's attempted annexation, Turkish President Recep Tayyip Erdoğan met with Russian President Vladimir Putin to advance talks about turning Turkey into a hub for Russian gas distribution. CHINA — NEW XI ERA LOOMS: China's Communist Party convenes on Sunday, to kick-off a once every five years gathering that will almost certainly install Xi Jinping as leader for life. Some China scholars are urging reporters to stop referring to Xi as China's president. They want Xi to be referenced with the title linked to his claim to power: general secretary of the Chinese Communist Party (he's also chairman of China's Central Military Commission ). The argument is that referring to Xi as "president" instead of "general secretary" is a win for Beijing's propaganda machine. Here's your refresher course on the Party congress, from Phelim Kine: "6 things to know as Xi Jinping moves to be China's dictator for life" CHIPS ARE DOWN — TOP SUPPLIERS CUT TIES WITH CHINA: Lam Research, Applied Materials and KLA Corporation are taking immediate measures to comply with new U.S. rules banning export to China of certain American semiconductor equipment, FT reported this morning. The Biden administration announced sweeping (and complicated) export controls last week. The goal: Slow down China's ability to catch up to advanced American chipmaking. The risks: The controls force China to finally build its own fully independent chip sector which could then actually catch up to the U.S., including via seizure of Taiwanese intellectual property, equipment and manufacturing capacity. MIGRATION — U.S. STARTS TO TURN BACK VENEZUELANS AT SOUTHERN BORDER: The new policy is part of a joint effort by the U.S. and Mexico to crack down on human smuggling operations. The new policy grants up to 24,000 Venezuelans humanitarian access by air, while authorizing U.S. officials to expel to Mexico those caught trying to cross illegally by land. Until now most that made it to the land border were released into U.S. pending asylum application hearings. BIODIVERSITY — GLOBAL DECLINE: Global biodiversity keeps declining, according to WWF's Living Planet report — a biennial assessment of ecosystems based on data collected on about 5,230 species. Species abundance (the number of individuals per species) has declined by an average 69 percent since 1970. Latin America experienced a devastating 94 percent decline. "There is no sign that the loss of nature is being halted, let alone reversed," said the report. Up to now, the main threat to biodiversity has been land-use change, including from forest and grassland to agriculture. In the future, climate change is expected to become the dominant cause of biodiversity loss. In other words: the problem is set to accelerate. GREEN 28: POLITICO's power ranking of players guiding Europe's climate agenda for the next year is topped by President Putin. FRENCH FUEL — A CRISIS AND A VICTORY: Around one-third of all gas stations in France are without fuel, with workers at the oil giants Total and Exxon Mobil continuing industrial action in a wage dispute. Prime Minister Élisabeth Borne has ordered essential Exxon workers to return to their refinery posts. Meanwhile France has for the first time started sending natural gas to Germany , part of efforts to diversify Germany's supply. The move puts into action an "energy solidarity deal" agreed last month in which France will help Germany with gas supply, while Germany will supply electricity to France during times of peak consumption. CONGRESS MEETS WORLD POLARIZING NEW SAUDI ARMS FREEZE BILL: Sen. Richard Blumenthal (D-Conn.) and Rep. Ro Khanna (D-Calif.) unveiled legislation on Wednesday to immediately freeze all arms sales to Saudi Arabia, amid outrage over the decision by OPEC+ to slash its oil output. Sen. Joni Ernst (R- Iowa) is leading the charge to continue Saudi defense cooperation. SENATORS SEEK BILLIONS MORE IN MILITARY AID FOR TAIWAN: They want to prevent Taiwan turning into the next Ukraine, via an additional $10 billion in military assistance over five years. That's up from a previously proposed $6.5 billion over the same period. GLOBETROTTERS REVENGE SOUGHT: Members of the European Parliament are apoplectic that Pfizer CEO Albert Bourla reneged on their invitation to testify before the coronavirus committee to talk about secret vaccine deals. LAUNCHED: Asia Society France entered the universe Thursday, on Paris' Left Bank at an event chaired by Jamil Anderlini, POLITICO's Europe editor-in-chief. Serge Dumont, a former PR executive who has held a number of honorary U.N. roles, will chair the new organization. BRAIN FOOD "When we spend more on people's retirement than their education, we're not leaving the world better than we found it. We're deciding as a society that the enjoyment of our elder years matters more than preparing our children's future." — Tomas Pueyo, Course Hero vice president. Thanks to editor Heidi Vogt and producer Hannah Farrow. SUBSCRIBE to the POLITICO newsletter family: D.C. Playbook | Brussels Playbook | London Playbook | Paris Playbook| Ottawa Playbook| EU Confidential | D.C. Influence | EU Influence | London Influence | Digital Bridge | China Direct | Berlin Bulletin | Living Cities   STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.       Follow us on Twitter Ryan Heath @PoliticoRyan   Follow us

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