Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Minneapolis-St. Paul

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa-St. Petersburg news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa-St. Petersburg

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Italian Prime Minister Giuseppe Conte (R), flanked by Deputy Prime Minister and Interior Minister Matteo Salvini. Photo: Andreas Solaro/AFP/Getty Images

This is a summer of crises for Europe, with a political collision in Italy landing in the midst of Brexit chaos while the continent's top economies flirt with recession.

Driving the news: Italian Prime Minister Giuseppe Conte said Tuesday that he would submit his resignation amid tensions between the 2 populist parties that comprise his government coalition: the anti-establishment Five Star Movement and the far-right League. He declared that the ruling coalition of 2 populist parties "ends here."

  • Deputy Prime Minister Matteo Salvini, Conte's former coalition partner, Italy’s interior minister and leader of the far-right League party, has been demanding fresh elections and could soon claim the prime minister’s office for himself.

Why it matters: Italy has seen 16 leaders take power in the last 30 years. If Salvini is the 17th, Italy's crisis could spread far beyond its borders.

How we got here:

  • The League and the anti-establishment 5 Star Movement were the big winners from Italy’s 2018 elections. They formed an uneasy ruling partnership, with Conte plucked as a compromise prime minister.
  • The parties almost immediately clashed with one another, and with the EU. Proposals from both would further inflate Italy’s massive public debt, provoking threats and pleas from Brussels.
  • Salvini made his move on Aug. 8, calling for the government to break apart. Polls suggest the fiercely anti-immigrant League and a right-wing ally could likely form a majority government. However, his far-right party is still facing questions over a campaign finance scandal involving Russian funds.

What to watch: Salvini may have miscalculated.

  • With Conte’s resignation, President Sergio Mattarella will now have to determine whether a stable government can be formed or fresh elections are needed. One possibility would see 5 Star and the center-left Democratic Party join together and expel the League from government.

The big picture: Italian politics are famously volatile, but the stakes here are high for Europe and for the global economy.

  • Salvini has floated an exit from the euro. Even short of that drastic step, the looming debt crisis is a greater source of concern even than Brexit for many in Brussels.

What they're saying:

  • Conte called Salvini "irresponsible" and said he didn't commit himself to "the government's good work" because "he was too focused on looking for an excuse to pull the plug on it."
  • Salvini said he would do everything over again: "I am a free man. I am not afraid of the judgment of Italians."
  • Matteo Renzi, a former prime minister, called for a government of national unity: "Populism has failed in this country."

The bottom line: Conte has lasted 14 months as prime minister. That’s not a particularly short tenure by Italian standards.

Go deeper

Felix Salmon, author of Capital
Updated 8 mins ago - Economy & Business

How central banks can save the world

Illustration: Aïda Amer/Axios

The trillion-dollar gap between actual GDP and potential GDP is a gap made up of misery, unemployment, and unfulfilled promise. It's also a gap that can be eradicated — if central banks embrace unconventional monetary policy.

  • That's the message from Eric Lonergan and Megan Greene, two economists who reject the idea that central banks have hit a "lower bound" on interest rates. In fact, they reject the idea that "interest rates" are a singular thing at all, and they fullthroatedly reject the idea — most recently put forward by New York Fed president Bill Dudley — that the Fed is "out of firepower."

Why it matters: If Lonergan and Greene are right, then central banks have effectively unlimited ammunition in their fight to increase inflation and employment. They are limited only by political will.

Updated 26 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: Large coronavirus outbreaks leading to high death rates — Coronavirus cases are at an all-time high ahead of Election Day — Fauci says U.S. may not return to normal until 2022
  2. Politics: Top HHS spokesperson pitched coronavirus ad campaign as "helping the president" — Space Force's No. 2 general tests positive for coronavirus
  3. World: Taiwan reaches a record 200 days with no local coronavirus cases — Europe faces "stronger and deadlier" wave France imposes lockdown Germany to close bars and restaurants for a month.
  4. Sports: Boston Marathon delayed MLB to investigate Dodgers player who joined celebration after positive COVID test.
Dan Primack, author of Pro Rata
3 hours ago - Economy & Business

Leon Black says he "made a terrible mistake" doing business with Jeffrey Epstein

Photo illustration: Sarah Grillo/Axios. Photo: Rick Friedman/Corbis/Getty Images

Apollo Global Management CEO Leon Black on Thursday said during an earnings call that he made a "terrible mistake" by employing Jeffrey Epstein to work on personal financial and philanthropic services.

Why it matters: Apollo is one of the world's largest private equity firms, and already has lost at least one major client over Black's involvement with Epstein.