Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team Eurosceptic Italy faces fresh elections amid political turmoil Italy could face an election as early as late summer as turmoil over the country’s leadership continues. The president Sergio Mattarella has asked the former economist Carlo Cottarelli to lead a caretaker government until a fresh vote can be called. Mr Cottarelli said that it could take place soon after the August holiday or, at the latest, at the start of 2019. The country has now been without a government since early March, after an election failed to return a clear winner and led to a political impasse. Markets have begun to take fright, with bond markets suggesting investors are becoming more cautious about lending to Italy. – ITV News Italy’s next government ‘will support UK over Brexit’ predicts top Five Star politician – Express Italy’s fresh election risks being referendum on euro – Reuters With political chaos, pressure on leaders and a divided continent, it’s as you were for Europe – Bloomberg Autumn vote will turn into a referendum on the EU – The Times (£) Will the next Italian elections be a referendum on democracy? – Henry Newman for The Spectator Interference from Brussels is being blamed for the new political storm brewing in Italy – The Sun Don’t expect a quick fix if another euro crisis unfolds – Matthew Lynn for the Telegraph (£) If Brussels to play hardball with Italy, it will be shooting itself in the foot – Luigi Scazzieri for the Telegraph (£) Italy’s populists will take advantage of this chaos for all it is worth – Christian May for City A.M. Europe’s soft coup d’etat in Italy is a watershed moment – Ambrose Evans Pritchard for the Telegraph (£) Italian voters head for euro showdown – Alberto Mingardi for Politico Europe’s losing streak – Politico Italy’s woes expose the flaws at the EU’s heart and show people have had enough of Brussels’ stifling rules – Tim Stanley for the Telegraph (£) Italy, like Britain, is tiring of infringements on its sovereignty – Telegraph editorial (£) Philip Hammond will make the City a ‘rule taker’ from Brussels, Bank of England fears Philip Hammond has been accused by one of the Bank of England’s most senior figures of pursuing a Brexit deal that would leave the Bank as a “rule taker” from Brussels. Sir Jon Cunliffe, one of the Bank’s deputy governors, fears that the Treasury is “going to give it all away” when it comes to City regulation post-Brexit, it is claimed. Relations between the Treasury and the Bank are said to be “very, very bad” as a result of the growing distrust. – Telegraph (£) Bank of England and UK finance ministry divided over city regulation after Brexit – Reuters Treasury and Bank of England at war over City regulation – The Times (£) BoE and Treasury at loggerheads over ‘Plan B’ for City Brexit – FT (£) BoE denies rift with UK Treasury over post-Brexit regulations – Bloomberg Brussels and Brexiteers united in anger over budget extension Britain will help to determine the EU’s £1 trillion budget up to 2027 after European countries defied Brussels and invited UK officials to take part in negotiations. The invitation, which has been accepted, was made because EU officials believe that Britain will keep paying billions of euros to Brussels for years after Brexit. The European Commission is furious at the plan, which was devised by the EU council representing individual member states. The commission claims that Britain will use budget discussions to change the rules to make it easier for the country to join science, research and other spending programmes after leaving the EU. – The Times (£) EU builds barriers to keep British companies from new €500m defence fund after Brexit The European Union has moved to shut the door on British and other non-EU defence companies from participating in a new flagship €500m (£437m) defence fund after Brexit, the Telegraph can reveal. The move, which comes amid a mounting row over the exclusion of British companies from the €10bn Galileo satellite navigation system on security grounds, has raised further fears about the EU willingness to forge a deep UK security partnership after Brexit. – Telegraph (£) Boris Johnson should be given more power over Brexit, intelligence and defence, says foreign affairs select committee chair Boris Johnson should be given more power over Brexit, defence and intelligence matters, the chairman of the foreign affairs select committee will say. Tom Tugendhat will warn that for too long Foreign Secretaries have been ‘hobbled’ as their power has been chipped away and handed to other ministers. And he will call for the Foreign Office to be handed authority over far more of Britain’s overseas policy. Speaking at the Royal United Services Institute for Defence and Security Studies tomorrow, he will call for a dramatic overhaul to secure the UK’s role in the world. He will say: ‘Successive Foreign Secretaries – including the current one – have been hobbled. They’ve had the title, but they haven’t had the power.’ – Daily Mail Nicola Sturgeon says Theresa May has to concede that Britain must remain in a customs union… Nicola Sturgeon has been accused of talking down the importance of the UK market after she claimed Theresa May would have to concede “sooner or later” that Britain must remain in a customs union with the EU. She said it was the “only credible” option after Brexit, adding that the Prime Minister was only listening to “mad Brexiteers” – naming Boris Johnson, the Foreign Secretary, Michael Gove, the Environment Secretary, and the Tory MP Jacob Rees-Mogg. The First Minister claimed the UK Government’s position of pulling out of the single market and the customs union was “unsustainable”. – Telegraph (£) …and attacks ‘mad Brexiteers’ after meeting Michel Barnier Nicola Sturgeon attacked “mad Brexiteers” like Boris Johnson, Jacob Rees-Mogg and Michael Gove after meeting with Michel Barnier in Brussels on Monday. The Scottish First Minister demanded Britain stay in the Customs Union and Single Market after it leaves the EU shortly after hiding talks with Mr Barnier, the EU’s chief Brexit negotiator. Theresa May has repeatedly said that Brexit means leaving both but Mrs Sturgeon said that position was “unsustainable” and that remaining in them could find majority support in the House of Commons. – Telegraph (£) Nicola Sturgeon: UK’s Brexit position ‘unsustainable’ – Politico Sturgeon takes Brexit concerns to Brussels – BBC News Nicola Sturgeon: ‘Time is running out for the UK’ in Brexit talks – BBC News Scotland ‘uneasy about Northern Ireland gaining Brexit advantage’ – Reuters May ‘is wrong to refuse referendum’ – The Times (£) ‘Show some steel!’ Brexit-backing Wetherspoon boss urges May to prepare for no deal Tim Martin, founder of the pub chain Weatherspoon, warned that the Prime Minister’s “weak” negotiating strategy was putting Britain’s future at risk. He also called for her to be ready to cancel the planned £39billion taxpayer-funded divorce payment to the EU and spend the cash on local projects across the UK instead. “It’s time to show some steel,” he told Mrs May. Mr Martin’s broadside, in an exclusive article for the Daily Express, reflects growing concerns among prominent Leave supporters in business that the Government is failing to stand up to Brussels negotiators in the talks about the country’s exit from the bloc. – Express Straw wars: The EU strikes back at Michael Gove The European Commission has challenged Michael Gove to a race to see whether Britain or Brussels can ban plastics first in the latest twist of the battle dubbed “straw wars”. On Monday, the commission put forward its plans to cut down on single use plastics such as straws, balloon sticks, drink stirrers, cutlery and plates. Instead, those products will have to be made from other, sustainable materials. Frans Timmermans, Jean-Claude Juncker’s deputy and the commission’s first vice-president, took a swipe at Mr Gove, the British environment secretary, as he launched the bill. – Telegraph (£) Britain ‘open skies’ deal with US due this summer as negotiators agree key terms Britain is set to agree an ‘open skies’ agreement with America this summer that will keep planes flying between both countries after Brexit, The Daily Telegraph can reveal. Four sources in London and Washington briefed on the talks have said a deal is “close” after consensus was reached on the biggest issues up for debate. UK and US negotiators have agreed that major transatlantic airlines must be covered despite them being foreign owned – a break with the normal rules. – Telegraph (£) Manufacturers’ association suggests MaxFac customs proposal is a ‘non-starter’ The government should not waste any more time or money exploring the so-called “maximum facilitation” option for future UK and EU customs, the manufacturers’ association has said. The max fac proposal – which would use technology to allow so-called “trusted traders” to cross the Northern Ireland and other EU borders freely after Brexit – has been slammed by EEF as “naïve” and “unrealistic”, with “immense” consequences if it fails. – City A.M. Brexit indigestion: row brewing over call for UK laws to protect likes of cognac and feta Feta cheese, Parma ham, French cognac and Belgium’s sour lambic beers are the latest cause of indigestion in Brexit talks, after the EU stepped up demands on the UK to legislate to preserve the status of European speciality produce. EU special status for regional food and drink has emerged as a new sticking point in the negotiations, following a bad-tempered week of discussions in which the two sides clashed over the Galileo satellite system, and the EU’s chief Brexit negotiator, Michel Barnier, told the UK government to stop playing “hide and seek” over its goals. – Guardian Telegraph: The Brexit ‘divorce bill’ is Theresa May’s only card left. She must use it One assertion never uttered by the Government anymore is that no Brexit deal is better than a bad one. When Theresa May became Prime Minister in July 2016 it was often on her lips to exemplify a determination to walk away from the negotiating table if progress was unsatisfactory. But for the threat to be anything other than empty rhetorical posturing, preparations had to be made for a clean and abrupt break. Although some preparations have been made, they are perfunctory – and, as we report today, Mrs May won’t even let her ministers talk about them, which seems to defeat the object of using them to extract concessions. – Telegraph editorial The Sun: Britain must start planning for a ‘no deal’ Brexit — or we’re only setting ourselves up for failure in negotiations The lack of adequate planning for a “No Deal” Brexit is a scandal. The best card we have to play in our negotiations with Brussels is that we can walk away if their hardline demands aren’t in our interests. That makes for a very strong hand. The EU would have a huge hole in its budget without our cash, and the Continent’s businesses will be livid if trading with the world’s sixth largest economy becomes more difficult. Yet if EU negotiators don’t take us seriously because we haven’t got regulators and standards bodies on standby if we do decide to go it alone, Brussels will serve us up nothing but thin gruel. And we’ll have no choice but to meekly surrender. – The Sun says Enea Desideri: Italy’s constitutional crisis: Where now? It seemed that the Italian political stalemate since the elections, which has now lasted over two months, was edging towards a breakthrough. But Italy is back to square one. Following a standoff with the would-be coalition partners over the appointment of economist Paolo Savona to the Economy and Finance Ministry, the Italian President of the Republic, Sergio Mattarella, yesterday decided not to green light the new Five Star Movement-League government. The two parties – particularly the League – refused to put forward a different name, and Mattarella likewise refused to back down. Explaining the reasons behind his decision, Mattarella pointed to the anti-Euro stances of professor Savona, stressing how leaving the single currency had not been part of the debate in the run up to the 4th March elections, and that any step in this direction should first go through public scrutiny and be a matter for in-depth public debate, and not be pursued through the back door.. – Enea Desideri for Open Europe John Redwood: The EU doesn’t like democracy The news from Italy takes my breath away. The President has vetoed one of the appointments to Ministerial office because he has expressed some Eurosceptic views, in line with the views of the winning parties in the election. He wishes to impose a government of unelected officials instead, which is unlikely to command the confidence of the Italian Parliament. He is challenging the winning parties to vote his government down and go for another election, when the results of the last one were clear and produced a potential coalition government with an agreed programme. – John Redwood’s Diary Leo McKinstry: Elite accepts Irish Referendum but rejects Brexit poll It is an outcome that has been widely hailed as a triumph for democracy and freedom, heralding a new era of progress in Ireland. “This is what liberation feels like,” proclaimed the feminist writer Susan Mackay, who added that the vote represented “a huge victory for humanity, for compassion, for empathy”. That feeling has been just as prevalent within most of the media and progressive opinion in Britain. At times, during saturation coverage of the result by the BBC, it looked as if some presenters had to restrain themselves from dancing a jig. Yet all this jubilation is in contrast to the response that greeted another referendum held recently in the British Isles. Two years ago, when the public here backed Brexit, the same liberal elite reacted with outrage and despair. – Leo McKinstry for the Express Martin Howe: Why we’re leaving the EU – and why the ECJ shouldn’t have jurisdiction over us after we leave Despite my original support for our membership of the EEC, by the time of the 2016 referendum I was firmly convinced that the right path for my country was to leave the European Union. So I was pleased to lead the lawyers’ official campaign group for a ‘Leave’ vote. The fundamental reason is this. The ever growing spread of EU laws into wider and wider areas removes the democratic right of the British people to live under laws which are decided upon by their elected representatives in Parliament. The spread of Community law (and later EU law) and the consequent loss of sovereignty has always been regarded in the UK as a negative feature of our membership. It has been tolerated in the past, because it was perceived to be in the economic and trading interests of the UK to join a trade bloc with internal free trade. – Martin Howe for Lawyers for Britain Henry Newman: The EU isn’t a conspiracy against democracy, but it does a pretty good job of looking like one That Italy has collapsed into a political crisis won’t surprise everyone. But the sense that the Italian President has vetoed the appointment of a candidate because they were too Eurosceptic is causing waves across the republic and beyond. Perhaps it shouldn’t, because not too long ago Silvio Berlusconi was forced from office with the reported backing of Angela Merkel and Nicolas Sarkozy, apparently because they felt he was becoming a threat to the Euro. This time the winners of the elections in March – the Five Star Movement and the League – were blocked from putting forward a Finance Minister because he refused to rule out any circumstance when he might back leaving the Euro. Angry calls are growing in Italy that democracy itself is under-threat. Five Star want to see the President impeached for violating the Constitution. Matteo Salvini, the League’s leader, has said that Italian sovereignty is limited (something that won’t surprise Brits used to groundhog debates here on Brexit). Salvini also complained that Berlin or Brussels were determining the Italian government, not Italians. – Henry Newman for ConservativeHome Brexit in brief Tacking The Ship – Gwythian Prins for Briefings for Brexit Escaping From Hotel California – Gwythian Prins for Briefings for Brexit Wake up, Europe! – Iain Martin for Reaction Arbitrary UK visa quotas lead to perverse and damaging outcomes – Sarah O’Connor for the FT (£) Life after Brexit: what voters care about — and which parties they trust – Matt Bevington for The Times (£) The real cost of Brexit is in missed opportunities – Janan Ganesh for the FT (£)