Tuesday, January 24
SUPREME COURT TO RULE ON BREXIT
On Tuesday, the UK’s top court will make a final ruling on whether the government must seek parliamentary approval before beginning the Brexit process. The Supreme Court is likely to insist it does.
In anticipation of this, PM Theresa May’s has reportedly prepared four different bills to be introduced as soon as possible. The drafts have been kept short in order to expedite the process. However, if Tuesday’s ruling mandates an Act of Parliament is required, rather than a simple vote, the process is expected to be lengthy. This will heap pressure on the prime minister, who has pledged to begin the process by March at the latest.
Last week, Theresa May signalled her preference for a “hard Brexit” that would see the country leave the EU and, in all likelihood, the bloc’s common market. To offset this, May’s promised her government would seek a “bold and ambitious” trade deal with the Union. But with Eurosceptic parties gaining ground elsewhere in Europe, Brussels has little incentive to make the UK’s exit an easy one.
Ms May’s job is about to get a lot harder.
ITALIAN COURT CONSIDERS PIVOTAL ELECTORAL LAW
Italy’s Constitutional Court will debate the legality of a 2015 electoral law known as Italicum on Tuesday.
The law, which was introduced in a bid to end the country’s revolving-door of governments, dictates that a party with 40% of the popular vote will be allocated 54% of lower house seats. Many in Italy – and indeed across Europe – are concerned that this makes it easier for the poll-leading populist and Eurosceptic Five Star Movement to seize power.
If the Court rules aspects of the law unconstitutional, the ruling centre-left Democratic Party will be able to scrap Italicum and possibly prevent their populist rivals from forming government. A successful reform of the electoral laws also means early elections are likely to be called ahead of the May 2018 deadline.
While the Constitutional Court may not reach a definitive ruling on Italicum on Tuesday, Italy’s parliament will continue to prioritise electoral reform to prepare for the next elections.
TURKEY’S CENTRAL BANK MAKES CRUCIAL DECISION
Turkey’s central bankers will meet on Tuesday to review the country’s monetary policy. Investors will be hoping for a rate rise to shore up the lira – 2017’s worst performing currency.
Last week, the reserve bank announced it would tweak banking regulations in a bid to slow the currency’s decline; economists and investors say that only a rate rise will do.
Tuesday’s decision is being seen as a test of the central bank’s independence. Turkey’s powerful president, Recep Tayyip Erdogan, has long scoffed at the possibility of raising interest rates due to the negative effect this would have on investment.
In signature style, Mr Erdogan has acknowledged the lira’s plunge by equating currency speculators to “terrorists” and insisting “someone is trying to force the country to its knees after failing to seize it with tanks, guns and F-16s on July 15″.
This thinly veiled jab at US-based cleric Fethullah Gulen plays into Erdogan’s broader political battles; in April he will put his much talked about presidential reforms to the Turkish people in a referendum. By then, the president will hope to have arrested the lira’s decline and set the economy on a more sustainable path.