Insight and Analysis

March 2017

By Jeremiah J. Baronberg

This May, the World Health Organization (WHO) will elect its next director-general to lead the 194-nation United Nations membership agency. The WHO was created with the charge of helping safeguard the health of the world’s population by focusing on global preparedness and responding to public health challenges.

Amidst transnational challenges such as Ebola and Zika, this year’s election is seen by many observers as having particular significance. Debate surrounding the WHO’s structure, mandate, and identity have been swirling in recent years and have generated hope that the agency will bring in decisive and inspirational leadership that can make the case for greater investment in public health. With an annual budget of $2 billion, the organization’s guaranteed funding has been frozen for more than a decade, leaving its director-general since 2006 Dr. Margaret Chan to say, “My successor needs to continue to address the financing of (the) WHO. There’s no two ways about it.”

The actual process for selecting the WHO’s leadership has been under increased scrutiny. This year, for the first time since its founding in 1948, the vote for the director-general will be open to the organization’s entire membership, not only its executive governing board. Recent calls for increased transparency in the process mean that the candidates must campaign openly in front of their peers and the public and engage in forums designed to better illuminate their visions on the role of the WHO and to answer questions directly from member states themselves. Still, there remain lingering concerns over the newly-designed “one-country-one-vote” procedure, due to its secret ballot system.

The three shortlisted finalists in contention for director-general are: 

• Dr. Tedros Adhanom Ghebreyesus of Ethiopia, a former health and foreign minister

• Dr. Sania Nishtar of Pakistan, former government minister who led the reform of her country’s ministry of health

• Dr. David Nabarro of the UK, senior UN advisor on the 2030 agenda for sustainable development and climate change

While at one point Dr. Nabarro was seen as a potential frontrunner, concerns over the impact of Brexit and his UN-insider status may have diminished his standing. Others have suggested that it is time for an African candidate to take over the reins. Nevertheless, recent surveys of global health stakeholders responded that, overall, the most important characteristics for the next WHO leader were “vision and ability to set direction” and “ability to build consensus,” followed by “ability to take necessary action independently.”

It is clear that the global health community is waiting with bated breath for the selection of the next WHO leader.

March 2017

By Jesica Dobbins Lindgren

“Without better governance, our goals of ending extreme poverty and boosting shared prosperity will be out of reach.”
- World Bank Group President Jim Young Kim

Since 1978, the World Development Report has tackled a pressing global development issue each year. This year's topic is especially timely: Governance—the good and the bad—affects how every country’s political, economic, and social institutions function. When a government is impaired by corruption or fails to enforce its own laws, the power balance can easily shift toward greater inequality and disrupt the delivery of vital services that citizens depend upon.

To address these concerns, the 2017 World Development Report calls for countries to strive for economic policies that ensure “commitment, coordination, and cooperation” to be most effective in serving the needs of their citizens and producing better governance outcomes. Otherwise, countries may find themselves reeling from one crisis to the next, struggling to create or sustain the stability needed for growth, or facing the prospect of failed statehood.

Ultimately, the report challenges governments to rethink how they govern and to transform their approach. Whether the issue relates to the functioning of institutions, identifying the extent of power asymmetries, or strengthening the rule—as well as and the role—of law, the report recommends practical ways that governments can rethink their approach.

To quote from the report’s main messages:

• Successful reforms are not just about “best practice” (they) must guarantee credible commitment, support coordination, and promote cooperation.
• Power asymmetries can undermine policy effectiveness…unequal distribution of power in the policy arena can lead to exclusion, capture, and clientelism.
• Elites, citizens, and international actors can promote change by shifting incentives, reshaping preferences and beliefs, and enhancing the contestability of the decision making process.

Good governance depends on delivering security, growth, and equity for citizens. In this way, viable policies that promote those goals effectively are fundamentally worth pursuing.

Click here to see highlights and to download the full report.

March 2017

By Jeremiah J. Baronberg

“We want a future of work that works for all and gender justice at the workplace is central to this.”
- Guy Ryder, Director-General of the International Labour Organization

On the occasion of this year’s International Women’s Day, the United Nations’ will convene its 61st session of the Commission on the Status of Women from March 13-24 under the theme of “Women’s economic empowerment in the changing world of work.

As part of this focus, the International Labor Organization (ILO) together with Gallup is releasing a new report entitled, “Towards a Better Future for Women and Work: Voices of Women and Men.” The report details the results of a global research project conducted through the Gallup World Poll to assess women’s and men’s views around the world about women and work. Interviews were conducted with 149,000 adults across 142 countries.

ILO Director-General Guy Ryder helped launch the report at a special event and panel discussion in Washington, DC. Click here to watch the video of the launch event.

Among the report’s highlights include findings that:

• 70 percent of all women and 66 percent of men would prefer that women have paid jobs
• 58 percent of women not in the workforce would like to work at paid jobs
• 41 percent of women would like to be able to work and care for their families

Click here to view more findings and to download the full report.

Although much progress has been made in the last century, women continue to face challenges—in both the developed and the developing world—to achieving full gender equality in the workplace. For example, in many parts of the world, women are unable to escape low-skilled work and must work longer, unpaid hours.

Women’s full and effective participation in the workforce is a key mandate of the ILO, which works to bring new perspectives that can guide actions to make the world of work a more gender-equitable place. Gallup has worked together with the ILO to help inform this effort by conducting this global survey on attitudes and perceptions regarding women and work, from both women and men.

Think you know your facts on women and the economy? Take this short quiz.

History of International Women’s Day

The history of International Women’s Day traces its roots to the political suffrage and labor protest movements of the early 1900s. In 1907, 15,000 women, many of whom were European immigrants working in the garment industry, marched through the streets of New York City to support this vision. In 1911, the Triangle Shirtwaist Factory fire—to this day the deadliest industrial disaster in New York City history and one of the worst in the history of the United States—shocked the country and added inspiration for marking the day. International conferences soon followed, drawing delegates from around the world. Since then, countries around the world have marked the day in different ways, including as a national holiday and in celebrations, reflection, and open discussions in municipalities and in local workplaces.

February 2017

By Jeremiah J. Baronberg

During the recent U.S. presidential campaign, Donald Trump made reshaping America’s involvement in international economic affairs a centerpiece of his platform. As a candidate, he specifically called out international trade—from abandoned factories to lost jobs and competitive wages—as a locus for many of the economic and societal challenges facing the country. Since being elected president, Mr. Trump has gone so far as to threaten to "tear up" or renegotiate existing U.S. free trade agreements (FTAs). He has also stated his preference for negotiating new bilateral trade pacts as opposed to broader regional agreements.

Can a president do all that? The answer: it's complicated.

Many believe Congress must also be involved. Though exactly to what degree is less clear and open to debate.

Under U.S. law, trade agreements are “congressional-executive agreements” created by statute, not treaty. They only have legal force once they are translated into official “implementing legislation” that must be passed by Congress and then signed into law by the president. As authorized by Congress, the president has the power to execute America’s trade laws and to negotiate and sign trade pacts with other countries. Still, ultimate authority to approve, reject, or cancel those deals and to amend U.S. trade law resides with Congress.

On TPP...

Soon after assuming office, President Trump quickly moved to issue a presidential memorandum directing the Executive branch to “withdraw” the U.S. as a signatory country to the Trans-Pacific Partnership, the sweeping trade pact negotiated by the Obama administration with 11 Pacific Rim trading partner nations. While TPP had been signed by the Obama administration in February 2016, it hadn’t yet been voted on or ratified by Congress. As a result, President Trump was able to renege on the U.S.’s continued consideration of the deal before Congress could take it up for debate.

Instead, President Trump has said that he is confident that he can replace TPP with a series of smaller and more narrowly focused bilateral trade agreements with individual Asian nations, such as with Japan. Notably, the president stressed that any such new agreements would include clauses allowing for a 30-day termination notice if the United States was not treated "fairly."

President Trump has been less vocal about the United States' ongoing trade negotiations with Europe, known as the Transatlantic Trade and Investment Partnership (TTIP).

On NAFTA...

In contrast to TPP which was never voted on by Congress, all approved U.S. trade agreements that are currently in effect have withdrawal clauses built into their terms. Based on the Constitution and U.S. trade law, a president would be authorized, technically, to “withdraw” the U.S. from a trade pact without Congressional approval. But whether such a potential “withdrawal” from an existing FTA in fact officially “terminates” an agreement’s implementing statute in all its practical aspects appears to be, however, less clear. Most likely, action by the president to terminate an exiting agreement without Congressional approval would end up in court.

This is the case with NAFTA, the 1994 North American Free Trade Agreement signed by Canada, Mexico, and the United States, which President Trump has threatened to cancel if it cannot be renegotiated to his liking. NAFTA’s Article 2205 enables a country to withdraw from the agreement six months after giving notice. However, like all approved trade deals, NAFTA’s actual implementing legislation is based on the Constitution’s Commerce Clause, which states that only Congress may alter U.S. tariff, tax, and customs laws. As such, many observers believe that President Trump would not be able to officially terminate (“reverse”) U.S. participation in NAFTA—or in any Congressionally enacted statute such as participation in the World Trade Organization (WTO)—without a corresponding new statute to “repeal” the original statute agreement, which must first be enacted by Congress and only then signed by the president. Still, even this requirement remains open for debate.

It should be noted that President Trump is not the first U.S. president to call for NAFTA to be updated and renegotiated. As a presidential candidate, President Obama also was critical of the deal. His administration’s approach to updating it was in part accomplished via TPP (to which Mexico and Canada are signatories), which modernizes and addresses many of the shortcomings of NAFTA, including providing more effective enforcement mechanisms for global labor and environmental protections as well as robust intellectual property and e-commerce sections.

Renegotiating trade deals

Notwithstanding the need for Congressional approval in order to fully terminate an existing trade pact, reopening a trade agreement for negotiation is itself not an easy task. For starters, President Trump’s own nominations to lead such negotiations—U.S. Trade Representative Robert Lighthizer and Secretary of Commerce Wilbur Ross—have yet to be confirmed by the Senate. Moreover, each of the relevant Executive branch departments and agencies—the Departments of State, Commerce, Treasury, and Labor and the Environmental Protection Agency, among others—would all need get on the same page before negotiating positions could be finalized.

Still, under “Trade Promotion Authority” (known as “fast track”, the current iteration of this legislation was passed by Congress in 2015 and applies to all agreements reached before July 1, 2018 and with possible extension to July 1, 2021), President Trump is authorized to pursue negotiations on new as well as existing trade deals with other countries and regional blocks.

In the end though, once any new agreement is finalized by the administration, it will need Congressional approval to implement its provisions.

February 2017

By Amanda Valdez

Ms. Valdez is a Partner at Dentons Lopez Velarde based in Mexico City, where she focuses on energy, mergers and acquisitions, and project finance.

For the past 70 years since nationalization, the exploration and production of oil and gas in Mexico has been subject to a state monopoly and entrusted to Pemex, the national oil company. Pemex historic significance and economic weight as a contributor to public revenues has been unique in Mexico.

When, in 2013, the Mexican Federal Constitution was amended to open the energy sector (oil, gas, and electricity) to private investment, domestic and international private sector interest in the Mexican energy sector erupted.

Thus far, upstream oil exploration and production (“E&P”) has been the main focus for investment and is fully open to domestic and international private investors and operators. Indeed, more than 35 blocks— both onshore and offshore—have been awarded to private consortiums, a change that was difficult to imagine only a decade ago. But not only is there focus on the upstream sector; the entirety of the oil and gas sector is undergoing dramatic changes and is ripe for opportunity.

For example, “midstream”—the transportation of refined energy products—is also of great interest to foreign companies due to Mexico’s continued decrease of oil production since 2005 and the country’s inability to finance the modernization of its refining and logistics infrastructure. As a result, and ironically, Mexico has for decades been a net importer of refined petroleum products and natural gas. More than 50 percent of the gasoline and 25 percent of the natural gas sold in Mexico is imported—mostly from the United States—and demand for these products outpaces short-term domestic production. Consequently, the midstream sector has drawn the attention of many commodity companies, particularly those from the U.S. based on their interest in exporting refined products to the Mexican market.

In order to develop its midstream sector, the market in Mexico will need to implement profound changes such that refined products can be transported and stored. Major natural gas pipelines to import gas from the U.S. have recently begun operating or are under construction and Pemex has been forced to give private companies access to its existing pipelines and terminals. At the same time, the Mexican Energy Regulatory Commission (“CRE”)—which is responsible for regulating and supervising the midstream and downstream sector of the oil and gas industry, as well as the electricity industry—is issuing regulations that guarantee open access and non-discrimination, rules that are intended to contain Pemex market power.

The natural gas market is where some of the most important changes in the Mexican energy sector are materializing. Pemex has already transferred all of its natural gas pipelines to the National Center for Natural Gas Control (“CENAGAS”), created in 2014 to operate the National Storage and Transportation Integrated System (“Sistrangas”). Comprised of 6,300 miles of natural gas pipelines extending across 20 Mexican states, Sistrangas was previously owned and operated by Pemex and other private owners. It now operates as the largest integrated system in the country.

As a result, access to Sistrangas is essential for the participation of private natural gas companies. Currently, CENAGAS is carrying out the first open season for firms to reserve transportation capacity in these pipelines. The process is scheduled to conclude in June 2017, with the execution of gas transportation agreements between CENAGAS and private companies.

Mexico has also developed other incentives to promote a competitive natural gas market. Last year, the CRE issued a series of resolutions for the implementation of the so-called “Pemex Gas Release Program,” requiring Pemex to make 70 percent of its gas supply contracts available to private gas companies over the space of four years. Private companies may then improve on Pemex’s terms and conditions and customers can select from offers in a competitive environment, terminating their gas supply agreements with Pemex without any liabilities.

While Sistrangas’ open season and the Gas Release Program are two of the most important steps that the Mexican government is taking to reorganize its energy sector at all levels, they are only one part of broader energy reform in the country. The liberalization of prices for gasoline and other fuels and the complete revamping of Mexico’s electricity industry are other important pieces in the metamorphosis of the Mexican energy sector.

In this environment and despite global uncertainties and challenges, existing stakeholders and newcomers are taking positions and redefining strategies to seize the opportunities that a competitive Mexican market is creating. Their commitment and successes are needed to materialize the expected benefits of Mexico’s energy reform for both the private sector and for Mexican consumers.

February 2017

By James Le Grice

This article is a contribution from our network partner firm Insight Consulting Group based in London.

Theresa May has put Britain’s special relationship with the U.S. at the heart of her Brexit strategy. On the surface this seems a wise move. Anglo-American relations have experienced a resurgence whilst EU-U.S. relations have soured following the inauguration of President Trump. Both the EU and the U.S. are in need of the Atlantic bridge that Britain has historically provided. However, with major changes to the European status quo and U.S. foreign policy on the horizon, May will need to demonstrate that Britain can be more than a middleman if its influence on both sides of the Atlantic is to survive.

While most European leaders were hesitant to embrace President Trump, Theresa May was swift to strike a positive relationship. This won her the prestige of being the first foreign leader to have a meeting with the new president, at which she secured a ‘100 per cent’ commitment to NATO and a commitment to begin pursuing a U.S.-UK free trade deal.

May is currently using these diplomatic victories to support her negotiating position for a post-Brexit free trade deal with the EU. The Prime Minister is under no illusion that it will be difficult to secure the arrangement she seeks; there have been calls from some in Europe to impose a punishing settlement on Britain to dissuade other member states from leaving.

By touting her successes to date with the Trump administration, Theresa May is effectively telling EU leaders to maintain good relations with Britain, as its influence with the U.S. is guaranteeing their collective security. This appears to be having some resonance. President Trump’s comments that NATO is ‘obsolete’, made just two weeks before Theresa May’s visit, caused panic amongst European leaders. European Council President Donald Tusk even went so far as to label the Trump administration, along with Russia, China and radical Islam, as one of the key challenges threatening the future of the EU.

At the EU summit in Malta on 3^rd February, Donald Tusk admitted that a good relationship with the UK ‘will protect our unique relationship with the U.S., and the transatlantic guarantee for freedom and international order.’ He added that protecting relations with the U.S. is ‘still the highest political priority’.

However, Britain’s Atlantic bridge is a two-way street. While Europe has traditionally benefited from British influence with the U.S. for its security, the U.S. has benefitted from British influence within the EU to advance its economic and geopolitical interests. If the current dynamic is to be preserved, Theresa May will need to gain some concessions from the EU to prove to America that Britain is still capable of advancing its interests.

May is currently lobbying European leaders to increase their defence spending – a key ask of the Trump administration. This is a far more difficult concession to secure than a vocal U.S. commitment to NATO, but if May can demonstrate a result it will undeniably give her a stronger hand in negotiating a favourable future trade deal with the United States.

The problem is that it is not in the current interests of the EU leadership for Britain to have a favourable post Brexit free trade deal with the United States. The rationale is best summarised in Donald Tusk’s recent letter to European heads of government warning against the potential break-up of the union:

It must be made crystal clear that the disintegration of the European Union will not lead to the restoration of some mythical, full sovereignty of its member states, but to their real and factual dependence on the great superpowers: the United States, Russia and China. Only together can we be fully independent.

If the UK is able to have a free trade relationship with the U.S. without becoming dependent on America, it will severely undermine the grounds on which the European Council’s president is appealing for further European unity.

Fear of U.S. dependence post Brexit is certainly high amongst much of the British public. Theresa May’s embracing of Donald Trump has been met with scepticism from both the left and the right, and following President Trump’s controversial travel ban, May faced backlash for her hesitancy to criticise the President.

Tens of thousands took to the streets of London and other UK cities to protest the travel ban and Theresa May’s silence, and nearly two million people have signed an e-petition to prevent Donald Trump from making a state visit to the UK in the autumn. One Member of Parliament even dubbed the Prime Minister ‘Theresa the Appeaser’.

While the reaction to the travel ban itself is unlikely to have a long-term impact, the wider debate it has reawakened about Britain’s ability to challenge U.S. policies than run counter to its interests is significant. The fate of Tony Blair, whose alliance with an unpopular U.S. president was his undoing, remains closely remembered in British politics.

The ramifications of a dependent relationship with the U.S. would extend beyond Britain’s borders. Many in the UK’s defence establishment, who view Russian expansionism in Eastern Europe as a key threat, are concerned about what a potential détente between the U.S. and Russia will mean for Britain. Over the past few years, the UK has similarly grown silent on Chinese interference in Hong Kong’s democracy to further better trade with Beijing.

Theresa May therefore needs to look beyond Britain’s traditional role as transatlantic mediator to secure the best post Brexit outcomes for Britain and the countries that rely on it. This will mean deepening trade ties beyond Europe and the U.S., a job that the newly created Department for International Trade has been tasked with. If successful, Britain will be able to sell itself to the U.S. and EU not only as a transatlantic bridge, but also as a bridge to the Gulf Cooperation Council and to the Commonwealth – key targets of the Prime Minister’s trade offensive. This will give it considerably more clout in negotiating with Europe and the United States.

Additionally, Theresa May will need to redefine how Britain wields influence in Europe, recognising that the current European status quo is unlikely to last. Euroscepticism, partly inspired by Brexit, is on the rise and making heavy marks on the polls in upcoming European elections. At the time of writing, Geert Wilders’ far right Freedom Party has favourable odds to win in the Dutch election next month. Exiting the EU is a key priority for his party.

More significant though is the upcoming French election, in which National Front leader Marine Le Pen has entered the race and is campaigning for a Frexit. Le Pen currently has strong chance of becoming France’s next president. Likewise, Italy may hold an early general election this year, and the Eurosceptic Five Star Movement is expected to make major gains.

Regardless of whether these fringe parties win their respective elections, the future leaders of their countries will not be able to ignore the rising Euroscepticism of their electorate. Brexit may have shaken the EU, but if France and Italy – founding members of the European Economic Community – seek to leave, then the EU will truly be in crisis.

This is where Britain has its strongest advantage for influence. Brexit was not a victory of anti-establishment fringe parties, but rather mainstream Conservative Party politicians who championed it as their own cause. Even the opposition Labour Party is now embracing Brexit. In setting out her Brexit strategy, Theresa May took ownership of the Brexit narrative, moving it away from rhetoric on immigration towards international trade and pledging a commitment to the EU’s future success alongside an independent Britain.

Theresa May can leverage this position to act as both a moderating influence on the Eurosceptic fringe parties of Europe, who are claiming Britain as their inspiration, and the EU’s leadership, whose response so far has been to push for ‘more Europe’. Britain has the potential to be a force for meaningful reform of the EU’s structures to better serve the populations of Europe, whilst preserving the stability and security provided by the alliance of European nations. If it can wield this influence effectively, Britain could find itself in the driving seat of a reformed Europe - infinitely strengthening its position as both an Atlantic bridge and a bridge to the wider world.

January 2017

By Jeremiah Baronberg and Molly Magnarelli

With the November 8, 2016 United States Presidential and Congressional elections concluded, the U.S. is now in the midst of a federal government transition process that will culminate with the inauguration of Donald J. Trump as the 45th president of the United States on January 20, 2017. The incoming 115th Congress has just begun its tenure, which will last from January 3, 2017 to January 3, 2019, and will operate during the first two years of the four-year presidential term. The 2016 elections resulted in continued Republican Party majority control of both houses of Congress: the House of Representatives and the Senate.

U.S. Administration and Presidential Appointees

While he has not yet officially taken office, President-elect Trump is currently exercising his Constitutional authority during this interim transition period to nominate senior level Executive branch leaders and advisors, including a presidential “cabinet” comprised of the appointed officers who will serve as the heads of their respective federal departments and agencies. As established in Article II, Section 2 of the United States Constitution, the cabinet’s function is to advise the president on any and all subjects related to the duties of each cabinet member’s respective office.

Every cabinet appointee, as well as many other senior level presidentially-appointed positions, must undergo a very strict and defined vetting process and official confirmation vote by the Congress (Senate) before they can serve in their roles in the administration. This confirmation process has only just begun and no cabinet appointees have yet been confirmed. The Senate confirmation process itself can be a lengthy and often contentious political and policy debate during which the views and backgrounds of nominees are brought to light and where senators grill nominees in highly publicized committee hearings on their suitability to their respective positions.

The mandated confirmation process begins with nominees first being subject to strict legal, financial, and other conflicts investigations by the White House, Federal Bureau of Investigation (F.B.I.), and Office of Government Ethics (O.G.E.), including handing over forms detailing financial disclosures, criminal background checks, and links to foreign governments. Next, the nominee’s name together with this background is submitted by the president-elect in writing to the Senate which then refers the nominee to the relevant committee with jurisdiction over the position or the agency in which the position exists. Committees may then choose to hold a hearing to debate and question the nominee directly and can subsequently either vote to “move” the nomination to the full Senate floor for consideration—requiring a simple majority vote to pass—or not move the nominee at all, effectively “killing” the nomination. Committees may also vote to “report” the nomination favorably, unfavorably, or without recommendation.

While historically most nominees have been confirmed, the process itself does not guarantee this outcome and is no mere formality. It is an important exercise during which senators can make use of well publicized confirmation hearings to directly influence and impact the future policy making process of the incoming administration, including by conditioning their support for nominees to specific pledges and commitments.

Current Democratic and Republican Party leaders have clashed over the Trump nominations process, which includes concerns that several of the nominees had not completed required ethics reviews prior to their scheduled hearings. New incoming Senate Minority Leader Chuck Schumer (Democrat-New York) reportedly asked for additional disclosures and records and demanded adequate time to review them before confirmation hearings were scheduled, saying, “Bottom line is we believe that these nominees need a thorough vetting.” The OGE also expressed dismay about the confirmation schedule proceeding before its ethics screening reviews could be fully completed.

In this evolving context, Senate Majority Leader Mitch McConnell has indeed moved to slow down the cabinet confirmation process. What was originally supposed to be a hectic week of 10 confirmation hearings has been significantly scaled down, with four hearings delayed. Mr. McConnell has stated the goal to have up to six or seven cabinet picks confirmed by Inauguration Day on January 20, the same number that incoming President Obama had by that juncture in 2009. Still, with continued conflict between Democratic and Republican Party leaders over several nominees, some estimates suggest that the entire confirmation process could take as long as two months to complete, if not more.

The current schedule of Senate confirmation hearings is:

January 10

Attorney General—Jeff Sessions (Committee on the Judiciary)

Secretary of Homeland Security—Gen. John Kelly (Committee on Homeland Security and Governmental Affairs)

January 11

(continued) Attorney General—Jeff Sessions (Committee on the Judiciary)

Secretary of State—Rex Tillerson (Committee on Foreign Relations)

Secretary of Transportation—Elaine Chao (Committee on Commerce, Science, and Transportation)

January 12

Central Intelligence Agency (C.I.A.) Director—Mike Pompeo (Select Committee on Intelligence)

Secretary of Defense—Gen. James Mattis (Committee on Armed Services)

Secretary of Housing and Urban Development—Ben Carson (Committee on Banking, Housing, and Urban Affairs)

(continued) Secretary of State—Rex Tillerson (Committee on Foreign Relations)

January 17

Secretary of Education—Betsy DeVos (Committee on Health, Education, Labor, and Pensions)

Secretary of the Interior—Ryan Zinke (Committee on Energy and Natural Resources)

January 18

Environmental Protection Agency (E.P.A.) Administrator—Scott Pruitt (Environment and Public Works)

Secretary of Commerce—Wilbur Ross, Jr. (Committee on Commerce, Science, and Transportation)

Secretary of Health and Human Services—Tom Price (Committee on Health, Education, Labor, and Pensions)

U.N. Ambassador—Nikki Haley (Committee on Foreign Relations)

February to be determined

Secretary of Labor—Andrew Puzder

Click here to stream live web-cast video or listen to audio here of the hearings.

Cabinet Composition and Additional Senior Level Positions

In recent years, a president’s cabinet has been comprised of the elected vice president, together with the appointed heads (“secretaries”) of 15 federal executive departments: Agriculture; Commerce; Defense; Education; Energy; Health and Human Services; Homeland Security; Housing and Urban Development; Interior; Labor; State (Foreign Affairs); Transportation; Treasury; and Veterans Affairs; as well as the Attorney General.

Seven additional appointed positions also hold the status of cabinet-rank: White House Chief of Staff; Environmental Protection Agency Administrator; Office of Management and Budget Director; United States Trade Representative; United States Mission to the United Nations Ambassador; Council of Economic Advisers Chair; and Small Business Administration Administrator. Beyond the cabinet are over 1,200 key senior level appointed positions that require Senate confirmation (e.g. agency directors, deputy and assistant secretaries, chief financial officers, general counsel, ambassadors, and federal judicial vacancies) as well as over 450 senior level appointed positions that do not require confirmation. In total, a presidential transition team may need to find appointees to serve in up to approximately 4,100 positions.

To date, President-elect Trump has nominated most of the members of his cabinet and a number of non-cabinet senior level appointed positions requiring Senate confirmation as well as additional senior White House staff and Executive Office of the President officials that do not require confirmation. President-elect Trump's nominees currently include:

[Click here, here, and here for additional details and background on each nominee.]

Cabinet and Cabinet-level—Require Senate Confirmation

Attorney General—Jeff Sessions

Secretary of Agriculture—Sonny Perdue

Secretary of Commerce—Wilbur Ross Jr.

Secretary of Defense—Gen. James Mattis

Secretary of Education—Betsy DeVos

Secretary of Energy—Rick Perry

Secretary of Health and Human Services—Dr. Tom Price

Secretary of Homeland Security—Gen. John Kelly

Secretary of Housing and Urban Development—Dr. Ben Carson

Secretary of Interior—Ryan Zinke

Secretary of Labor—Andrew Puzder

Secretary of State (Foreign Affairs)—Rex Tillerson

Secretary of Transportation—Elaine Chao

Secretary of Treasury—Steven Mnuchin

Secretary of Veterans Affairs—Dr. David Shulkin

Council of Economic Advisors Chair—not yet named

Environmental Protection Agency Administrator—Scott Pruitt

Office of Management and Budget Director—Mick Mulvaney

Small Business Administration Administrator—Linda McMahon

United States Trade Representative—Robert Lighthizer

United Nations Ambassador—Nikki Haley

Cabinet-level—Do not require Senate Confirmation

White House Chief of Staff—Reince Priebus

Non-Cabinet-level—Require Senate Confirmation

Central Intelligence Agency (C.I.A.) Director—Mike Pompeo

National Intelligence Director—Dan Coats

Secretary of the Army—Vincent Viola

Securities and Exchange Commission (S.E.C.) Commissioner—Jay Clayton

United States Agency for International Development (U.S.A.I.D.) Administrator—not yet named

White House Office and Executive Office of the President—Do not require Senate confirmation

Assistant to the President for Homeland Security and Counterterrorism—Thomas Bossert

Centers for Medicare and Medicaid Services Administrator—Seema Verma

Chief Strategist and Senior Counselor—Stephen Bannon

Counselor to the President—Kellyanne Conway

Deputy Chiefs of Staff—Rick Dearborn, Joe Hagin, Katie Walsh

Deputy National Security Advisor—Kathleen Troia (K.T.) McFarland

Director of Trade and Industrial Policy (National Trade Council)—Peter Navarro

National Economic Council Chair—Gary Cohn

National Security Adviser—Michael Flynn

Council on Environmental Quality Chair—not yet named

Office of National Drug Control Policy Director—not yet named

Office of Public Engagement Director—not yet named

Office of Science and Technology Policy Director—not yet named

Press Secretary and Communications Director—Sean Spicer

Senior Advisor to the President—Jared Kushner

Senior Advisor to the President for Policy—Stephen Miller

Special Advisor to the President on Regulatory Reform—Carl Icahn

Special Representative for International Negotiations—Jason Greenblatt

White House Counsel—Donald McGahn

115th Congress *

In addition to the presidential and Executive branch transition, the U.S. Congress is undergoing its own transition. The November 2016 Congressional election resulted in the Republican Party retaining majority control of both the House of Representatives (241 Republicans; 194 Democrats) and the Senate (52 Republicans; 46 Democrats; 2 Independents). In 2017, the 115th Congress will meet from January through December, punctuated by intermittent recesses. Click here for the House calendar and here for the Senate calendar.

As part of this Congressional transition, both political parties have announced changes to their senior leadership teams as well as to their leadership of various committees (chair=majority party; and ranking member=minority party).

In the Senate, Mitch McConnell of Kentucky will continue to serve as Republican Majority Leader while the Democratic Party in November 2016 elected Charles Schumer of New York to his new role as Minority Leader, following Democrat Harry Reid’s (Nevada) retirement from Congress at the end of his fifth term of service. Mr. Schumer quickly moved to expand his leadership team by adding new voices from senators such as Bernie Sanders of Vermont, Joe Manchin of West Virginia, and Tammy Baldwin of Wisconsin as well as elevating Patty Murray of Washington to the third ranking position. In the House, both parties will continue with their same senior leadership teams, while the Democratic Party elevated Joseph Crowley of New York and Linda Sánchez of California to caucus chair and vice chair, respectively.

Senate Republican Party—Majority Leadership

Republican Leader—Mitch McConnell (Kentucky)

Assistant Republican Leader—John Cornyn (Texas)

Republican Conference Chair—John Thune (South Dakota)

Republican Conference Vice Chair—Roy Blunt (Missouri)

Republican Policy Committee Chair—John Barrasso (Wyoming)

Republican Senatorial Committee Chair—Cory Gardner (Colorado)

Senate Democratic Party—Minority Leadership

Democratic Leader and Chair of the Conference—Charles Schumer (New York)

Minority Whip—Richard Durbin (Illinois)

Assistant Democratic Leader—Patty Murray (Washington)

Democratic Policy and Communications Committee Chair—Debbie Stabenow (Michigan)

Democratic Conference Vice Chair—Elizabeth Warren (Massachusetts)

Democratic Conference Vice Chair—Mark Warner (Virginia)

Steering Committee Chair—Amy Klobuchar (Minnesota)

Outreach Chair—Bernie Sanders (Vermont)

Democratic Policy and Communications Committee Vice Chair—Joe Manchin (West Virginia)

Democratic Conference Secretary—Tammy Baldwin (Wisconsin)

Campaign Committee Chair—Chris Van Hollen (Maryland)

House Republican Party—Majority Leadership

Speaker of the House—Paul Ryan (Wisconsin)

Majority Leader—Kevin McCarthy (California)

Majority Whip—Steve Scalise (Louisiana)

Republican Conference Chair—Cathy McMorris Rodgers (Washington)

Republican Policy Committee Chair—Luke Messer (Indiana)

House Democratic Party—Minority Leadership

Democratic Leader—Nancy Pelosi (California)

Democratic Whip—Steny Hoyer (Maryland)

Assistant Democratic Leader—James Clyburn (South Carolina)

Democratic Caucus Chair—Joseph Crowley (New York)

Democratic Caucus Vice Chair—Linda Sánchez (California)

Democratic Campaign Committee Chair—Ben Ray Luján (New Mexico)

Key Committee Leadership

Among the 115th Congress’ key committee leadership changes in the House of Representatives include: Representative Greg Walden (Oregon) succeeding Representative Fred Upton (Michigan) as Republican Party chair of the Energy and Commerce Committee; and Representative Richard Neal (Massachusetts) taking over as the new Democratic Party ranking member on the powerful House Committee on Ways and Means, succeeding Representative Sander Levin (Michigan), who is stepping down from his long-time leadership role on the committee, including as both chair and ranking member. The Committee on Appropriations and the Committee on the Budget have also each announced new Republican Party chairs.

In the Senate, many of the key committees such as Foreign Relations and Finance will retain their same leadership. Among the important changes include: Senator Mike Crapo (Idaho) succeeding Senator Richard Shelby (Alabama) as the new Republican Party chair of the Committee on Banking, Housing, and Urban Affairs; and Senators Patrick Leahy (Vermont) and Claire McCaskill (Missouri) taking over as Democratic Party ranking members on the Committee on Appropriations, and the Committee on Homeland Security and Governmental Affairs, respectively.

House of Representatives Committees

Committee on Agriculture

●       Chair Michael Conaway (Texas)

●       Ranking Member Collin Peterson (Minnesota)

Committee on Appropriations

●       Chair Rodney Frelinghuysen (New Jersey)

●       Ranking Member Nita Lowey (New York)

Committee on the Budget 

●       Chair Tom Price (Georgia) (Nominated for Secretary of Health and Human Services)

●       Ranking Member John Yarmuth (Kentucky)

Energy and Commerce Committee

●       Chair Greg Walden (Oregon)

●       Ranking Member Frank Pallone (New Jersey)

Financial Services Committee

●       Chair Jeb Hensarling (Texas)

●       Ranking Member Maxine Waters (California)

Committee on Foreign Affairs

●       Chair Ed Royce (California)

●       Ranking Member Eliot Engel (New York)

Committee on Homeland Security

●       Chair Michael McCaul (Texas)

●       Ranking Member Bennie Thompson (Mississippi)

Small Business Committee

●       Chair Steve Chabot (Ohio)

●       Ranking Member Nydia Velázquez (New York)

Committee on Ways and Means

●       Chair Kevin Brady (Texas)

●       Ranking Member Richard Neal (Massachusetts)

Senate Committees

Committee on Agriculture, Nutrition, and Forestry

●       Chair Pat Roberts (Kansas)

●       Ranking Member Debbie Stabenow (Michigan)

Committee on Appropriations

●       Chair Thad Cochran (Mississippi)

●       Ranking Member Patrick Leahy (Vermont)

Committee on Banking, Housing, and Urban Affairs

●       Chair Mike Crapo (Idaho)

●       Ranking Member Sherrod Brown (Ohio)

Committee on the Budget

●       Chair Mike Enzi (Wyoming)

●       Ranking Member Bernie Sanders (Vermont)

Committee on Commerce, Science, and Transportation

●       Chair John Thune (South Dakota)

●       Ranking Member Bill Nelson (Florida)

Committee on Energy and Natural Resources

●       Chair Lisa Murkowski (Alaska)

●       Ranking Member Maria Cantwell (Washington)

Committee on Finance

●       Chair Orrin Hatch (Utah)

●       Ranking Member Ron Wyden (Oregon)

Committee on Foreign Relations

●       Chair Bob Corker (Tennessee)

●       Ranking Member Ben Cardin (Maryland)

Committee on Health, Education, Labor and Pensions

●       Chair Lamar Alexander (Tennessee)

●       Ranking Member Patty Murray (Washington)

Committee on Homeland Security and Governmental Affairs

●       Chair Ron Johnson (Wisconsin)

●       Ranking Member Claire McCaskill (Missouri)

Committee on Small Business and Entrepreneurship

●       Chair Jim Risch (Indiana)

●       Ranking Member Jeanne Shaheen (New Hampshire)

Joint Committees

U.S. Helsinki Commission on Security and Cooperation In Europe

●       Chair Representative Chris Smith (New Jersey)

●       Co-Chair Senator Roger Wicker (Mississippi)

●       Ranking Member Representative Alcee Hastings (Florida)

●       Ranking Member Senator Ben Cardin (Maryland)

*Explanation of Titles and Roles

Speaker of the House—Elected by the whole of the House of Representatives, the Speaker acts as leader of the House and combines several roles: the institutional role of presiding officer and administrative head of the House, the role of leader of the majority party in the House, and the representative role of an elected member of the House. The Speaker of the House is second in line to succeed the President, after the Vice President.

Majority Leader—Represents Republicans on the House floor.

Majority Whip—Assists leadership in managing party's legislative program.

Republican Conference Chair—Heads organization of all Republican Party members in the House.

Republican Policy Committee Chair—Heads Conference forum for policy development.

Democratic Leader—Represents Democrats on the House floor.

Democratic Whip—Assists leadership in managing party's legislative program.

Assistant Democratic Leader—Works with caucuses and as liaison to Appropriations Committee.

Democratic Caucus Chair—Heads organization of all Democratic Party members in the House.

Democratic Caucus Vice Chair—Assists the Chair; Second in command of the House Democratic Caucus

January 2017

By Norman Rozenberg

At no time in the last two years has the future of sanctions policy towards Russia over Ukraine been more uncertain. The transatlantic economic sanctions regime that has dominated American and European relations with Russia since 2014 is under scrutiny as a new president enters the White House and unanimous support among Europeans is waning. Political change in both the United States and the European Union is driving a new time of uncertainty.

Recent accounts of the Russian government’s alleged involvement in the Democratic National Committee (DNC) hacks and document leaks have added additional complications to this evolving situation. According to the U.S. intelligence community, the level and scope of the alleged DNC hack and document leaks to websites such as WikiLeaks could only be attributed to the Russian government. In response, Members of Congress are currently deliberating a new round of sanctions beyond those signed by President Obama, including the ejection of 35 Russian diplomats from the country. If Congress were to pass a new sanctions bill against Russia, many of the previous executive orders by the Obama administration would be made permanent.

Economic and travel sanctions were first instituted in 2014 by the Obama administration and the E.U. after Russia annexed the Crimea peninsula of Ukraine on the Black Sea and publicly supported separatists in Eastern Ukraine. These sanctions included both visa bans against top Russian officials and restrictive measures against the country’s top banks. The most damaging of these measures severely restricted access to dollar funding for Russian banks and gas companies. Major gas producers such as Novatek have had to postpone infrastructure projects due to difficulties securing funding from foreign investors dissuaded by the sanctions. Sanctions have had an impact.

In the U.S. to date, there has been bipartisan consensus among lawmakers in Congress that sanctions were a necessary tool to pressure Russia into de-escalating the situation in Ukraine and by respecting the Minsk Protocol that called for a ceasefire in Eastern Ukraine. Indeed, the House of Representatives passed a strongly-worded resolution in 2015 in support of President Obama’s sanctions policy, while Republican Senators such as John McCain and Bob Corker called for even tougher measures, including arming Ukraine with lethal weapons.  

In Europe, policy makers have instituted tactics such as asset freezes and visa bans designed to impact Russian business interests in London and other key global financial centers. For their part, while the Europeans have viewed sanctions as a means to pressure Russia to come to the negotiating table, Russian countersanctions and deteriorating relations have cast doubt on the potential for such an outcome. Concurrently, European politicians have expressed strong support for a unified Trans-Atlantic partnership for working with Russia to find a solution to the crisis. But with the failure of a ceasefire that was promised in both iterations of the Minsk Protocols and no progress on a solution for Crimea, the chorus of arguments against sanctions policy has since grown louder for some lawmakers and pundits, particularly in Europe. 

In this context, the shaky ground that the current sanctions regime stands on is fast coming under increased pressure. With no clear solution, decision-makers on both sides of the Atlantic are increasingly calling for new approaches. U.S. President-elect Donald Trump, as well as his newly appointed national security advisor Michael Flynn, have expressed a desire to work with counterparts in the Kremlin to address Ukraine and have called for closer ties between the U.S. and Russia.

Furthermore, while respected area experts such as Andrew Wood and David Kramer have argued in favor of a strong sanctions regime, others have been far more skeptical that such punitive measures are alone capable of either de-escalating the conflict or bringing Russia to the negotiating table. As sanctions seem to have had little effect on Russia’s interest in working with the West, dissenting opinions have grown and strengthened. Those such as Eugene Rumer has criticized the Obama administration for not engaging with Russian President Putin or his inner circle. Instead of tougher sanctions, they call for deeper engagement with Russia and a continuing dialogue aimed at addressing Ukraine.

Elements of realpolitik have also entered the equation. A number of E.U. member states rely heavily on trade with Russia, such as France, Italy, Hungary, and Slovakia. Western sanctions and Russian counter-sanctions have negatively impacted trade relations with these countries where some have lost an important export market for their manufactured goods and agricultural products. While Russians can go without brie, French farmers rely heavily on these exports to survive.

In the U.S., despite seemingly strong bipartisan Congressional support, sanctions policy is in danger of unraveling in favor of potential alternative approaches, however limited those options may appear to exist. American sanctions are authorized by an executive order signed by President Obama, which the new U.S. president could undo with the stroke of a pen. If Mr. Trump cannot be convinced by members of the Republican Party or his own cabinet to maintain the sanctions regime, similar European measures may also become vulnerable. The E.U. votes on whether or not to extend their sanctions policies every six months. If it is looking to the U.S. for leadership in this area, the E.U. may find itself wanting and not be able to obtain the unanimous votes needed, leaving the sanctions to expire.

This situation has led politicians on both sides of the Atlantic to question just how effective sanctions policy has been. The problem, however, is that politicians seem to be left with only two options: maintaining sanctions on Russia; or looking for an alternative option that may result in the removal of the measures. While Mr. Trump has expressed interest in the latter, the Republican-dominated Congress has held steadfast on sanctions. Most recently, Mr. Trump’s nominee for Secretary of State Rex Tillerson told the Senate Foreign Relations Committee that he believed sanctions on Russia would continue until the new administration decided its position on the subject. Further, with Senator McCain’s recent visit to Ukraine, some see a political battle brewing between the president and Congressional leadership.

The coming weeks will be crucial for sanctions policy as a new U.S. administration enters the White House and signals to the world what its next steps will be in addressing the Ukraine crisis and sanctions levied against Russia.

January 2017

By Gabriella Ippolito

As this new year begins, a number of countries in South America are facing serious economic and political challenges as well as national elections. In Brazil and Argentina, political leaders are grappling with long-lasting economic recessions and anxious citizens, while in Ecuador and Chile, South America’s “pink tide” may continue being rolled back as conservative candidates are catching up or leading the polls in upcoming presidential elections. Finally, the ongoing political and humanitarian crisis in Venezuela continues to command the attention of the region as well as the broader international community.

In Brazil…

South America’s largest economy remains mired in an economic crisis and a political class that is dogged by ongoing corruption allegations. The current administration headed by President Michel Temer has experienced declining approval rates during the prolonged recession and is under pressure to improve the country’s shrinking economy and get the budget deficit under control. President Temer has announced new measures to help jump-start the economy such as boosting productivity by offering more credit from state development bank BNDES to small businesses and a labor reform. The government is also examining measures to reduce the time it takes to authorize imports and exports. Notwithstanding these efforts, the economic outlook for Brazil in 2017 has worsened in recent weeks. For example, on January 2, the central bank reduced its forecast for GDP growth for 2017 to .5 percent, down from .8 percent. 

As part of the ever-growing “Lava Jato” corruption investigation, former president Luiz Inacio “Lula” da Silva will face a fifth corruption trial and, if convicted, could face more than 15 years in prison. The latest case involves the acquisition of land for the Lula Institute (a think tank founded by the former president) and an apartment in a Sao Paulo suburb allegedly used by Odebrecht, a construction firm, to bribe Lula in exchange for public contracts. Yet despite all this, recent polls still favor Lula to regain the presidency should he choose to run in the 2018 elections. 

In Argentina…

Since taking office, economic reforms have been central to President Mauricio Macri’s political platform. Despite Mr. Macri’s promise of a return to growth in the second half of 2016, Latin America’s third largest economy is still in a recession. In order for the president to avoid losing ground in Argentina’s October 2017 legislative elections, the projected return to growth in 2017 is crucial. Mr. Macri's own political party (“Republican Proposal”) is in the minority in the Argentine National Congress and if it loses seats in the election, the further passing of reforms and legislation will likely prove even more difficult. President Macri recently shook up his finance team, announcing that finance minister Alfonso Prat-Gay would be replaced and that the Ministry will be reformed into two divisions: a Finance Ministry led by Luis Caputo; and a Treasury Ministry headed by Nicolas Dujovne. It is hoped that this new economic team will enable growth, slow inflation, and reduce unemployment. 

In addition to economic turmoil, Argentina is home to high political drama as former president Cristina Fernandez de Kirchner was indicted in late December 2016 on fraud and corruption charges related to major public works projects. This case will be ongoing throughout 2017.

In Ecuador…

Ecuador’s general elections, with the first round set for February 2017, could bring significant change to the country, including a new president for the first time in a decade since current President Rafael Correa (Alianza Pais Party) was first elected in 2007. The presidential candidates include former vice president and U.N. Special Envoy on Disability and Accessibility Lenin Moreno of the left-leaning Alianza Pais Party and more conservative candidates, including Guayaquil banker Guillermo Lasso (CREO), Guayaquil attorney and National Assembly member Cynthia Viteri (Social Christian Party), and former mayor of Quito Paco Moncayo (National Agreement for Change Coalition).

While Mr. Moreno currently has the lead in the polls at 28.6 percent, he is unlikely to cross the threshold that will enable him to avoid a runoff, which would take place on April 2. Mr. Moreno’s lead has also shrunk in recent months as more conservative-leaning candidates catch up. If the election goes to a runoff vote and the conservative parties coalesce around Mr. Lasso, Ms. Viteri, or Mr. Moncayo, Ecuador could become the latest country in Latin America whose “pink tide” is turned back, following Argentina, Brazil, and Peru of last year.

In Chile…

Chile’s next presidential election is scheduled for mid-November 2017. Recent updates show that former president Sebastian Piñera, a conservative candidate, is leading in the polls with 23 percent, having positioned himself as the leader of the opposition to current left-leaning president Michelle Bachelet’s policies. President Bachelet has said that she will retire from Chilean politics after the election and her popularity has decreased notably towards the end of her mandate. In a recent poll, 68 percent of Chileans said they disapproved of her presidency. Other candidates for president include independent Senator Alejandro Guillier (19 percent), former president Ricardo Lagos (four percent), Manuel Jose Ossandón (four percent), and former Secretary General of the Organization of American States (OAS) José Miguel Insulza (one percent). Still, the race is just beginning and more candidates may announce their intention to run. Indeed, many political parties in Chile have said that they will only announce which candidate they are supporting in March.

In Venezuela…

While Argentina and Brazil each show potential for economic growth, Venezuela continues to be the most weighed down economy in the region as it suffers from a double digit recession and triple digit inflation. Venezuela has the both the highest inflation rate (1,107 percent) and the deepest recession in the world. President Nicolas Maduro (PSUV-Socialist Party) has failed to mitigate the country’s economic, political, and humanitarian crisis and has faced street protests and calls for a recall referendum last year. Only his hold over the electoral council and courts has enabled him to avoid such a referendum. Vatican-moderated talks with the opposition commenced in late October 2016 but fell apart in December.

On January 4, the evening before the National Assembly’s new session was scheduled to commence, Mr. Maduro appointed a new Vice President, Tareck El Aissami, a former minister of the interior and Governor of the state of Aragua. Mr. El Aissami’s appointment is critical because, should the opposition gather the signatures necessary for a referendum vote, and should President Maduro be recalled, Mr. El Aissami would complete Mr. Maduro’s presidential term through 2019. Mr. El Aissami, a self-identified “extreme Chavista,” is reputed to have ties to narco-traffickers as well as to Hamas and Hezbollah.

Leaders in the opposition-controlled Venezuelan National Assembly have said that they are afraid that President Maduro and his PSUV Party supporters will attempt a coup d’etat this year to remove all of the Assembly’s powers and further solidify control over the state. Indeed, PSUV leaders have stated publicly that the current National Assembly needs to be dissolved, despite calls to the contrary by the OAS. In this increasingly destabilizing environment, many observers are arguing that greater regional pressure on the Maduro government will be needed to help lessen the crisis and provide support for opposition voices.

December 2016

By Gabriella Ippolito

On December 4, 2016, Austria and Italy each held electoral exercises which had strikingly different outcomes and were seen as gauges of the strength of Europe’s populist and far right political parties.

In Austria, and seemingly breaking with 2016's anti-establishment trend, the country elected Independent party candidate Alexander Van der Bellen as president with 53.3 percent of the vote. Mr. Van der Bellen’s support for Austria’s European Union membership and immigrant integration stood in stark contrast to his more populist-oriented opponent, Norbert Hofer of the far right-wing Freedom Party, whose campaign was marked by calls for significantly limiting migration and refugees and a marked concern for Islamist terrorism in Europe.

In Italy, however, a constitutional referendum supported by Prime Minister Matteo Renzi and his Democratic Party failed after voters overwhelmingly rejected it. At 70 percent, turnout for the vote was higher than usual, with 60 percent voting against the referendum. While polls had shown that Prime Minister Renzi’s reform proposals would likely fail, the margin of the loss and the electorate’s apparent decisiveness surprised many observers.

Mr. Renzi, who had during the campaign stated his intention to resign if the referendum failed, remained in office until December 7, per Italian President Sergio Mattarella’s request, so that the country’s budget could pass in the Parliament.

Subsequently, President Mattarella announced that he would open consultations with each of the Italian political parties on December 8. He appointed a new prime minister on December 11, Paolo Gentiloni, who had served as Foreign Minister under Mr. Renzi. Mr. Gentiloni now has the responsibility of creating a new government, which will draft a new electoral law leading to elections that will likely take place in spring 2017. The new government should be formed in the coming weeks; it is thought that it will resemble Mr. Renzi's as Mr. Gentiloni also belongs to the Democratic Party which remains the largest party in the Congress.

President Mattarella did not call for snap elections. Rather, he said that he is in favor of stability and of a regulated electoral process and announced on December 5 that the Constitutional Court must rule on the existing voting law prior to elections. This ruling is not expected until late January thus making elections prior to April 2017 virtually impossible, given Italy’s legally-mandated 45-day campaigning period.

Italy's vocal opposition parties, most notably the populist Five Star Movement and the right-wing Northern League, called for snap elections and a non-binding plebiscite on Italy’s euro membership. They are now saying that they will ask for a confidence vote on Mr. Gentiloni in the coming days. If snap elections were held, the Five Star Movement would likely become the largest party in the Italian Parliament. The Northern League leader, Matteo Salvini, has threatened street protests if an election date is not announced soon. Both parties are against the Eurozone and in favor of strictly curtailing the mass immigration which Italy has experienced in recent years.

This political uncertainty in Italy has shaken its already weak economy. In recent years, Italy’s banks have been a cause for concern and its most troubled bank and the country’s third largest, Monte dei Paschi di Siena, may be in need of a bailout loan shortly. In this dynamic environment, these economic concerns reinforce a growing need for increased political stability in the country.