Game of Thrones, Italian style

Game of Thrones, Italian style

 Italy’s Deputy Prime Minister Matteo Salvini. (Reuters)

Italian politics was always unstable, erratic and slightly on the mad side. However, what unfolded over the last week went beyond the wildest expectations — even by the standards of Italian politics.

The country’s deputy prime minister and interior minister, Matteo Salvini, quickly established himself as the strong man in the (uneasy) coalition government between the right wing populists of the Lega and their leftwing populist partners of the Five Star Movement (M5S), which is led by the other deputy premier Luigi Di Maio. Salvini’s power base is in the North, whilst the M5S’s lies in the South where unemployment is high. The former advocated for tax cuts which went down well with the wealthy elites in the North and the latter achieved a minimum income for the unemployed. The combination of less tax revenues and more government expenditure did little to endear the Italian government to the EU, given that the ratio of Italy’s total government debt to gross domestic product stands at 132 percent, more than double the threshold permitted by Brussels.

Be that as it may, Salvini’s anti-immigration policies and laws also made him popular in the country’s South, which bears the brunt of the stream of refugees coming across the Mediterranean. This particular crisis always reaches its high point during the summer months. No wonder then that the tough talking politician’s popularity soared in the polls. It currently stands at 37 percent (down a bit from the 40 percent some weeks ago). In a reversal of fortune, Di Maio lost M5S a good 16 percent since last year’s election and now reaches barely 17 percent.

This was therefore a good time for Salvini to seize the moment. He wanted to force a no confidence vote against Prime Minister Giuseppe Conte and his government in which Salvini serves. He hoped to trigger a new election, where his Lega could gain the majority and he could become prime minister. The senate had to be convened to opine on the proposal — at the height of Italy’s Ferragosto holiday season. Senators had to fly in from their summer retreats.

Things did, however, not pan out as Salvini expected. In what can only be compared to a minor political earthquake, Di Maio teamed up with a former prime minister, Matteo Renzi, and his social democrats, Partito Democratico (PD) to block Salvini’s motion. PD and M5S are not friends — the new government sidelined the social democrats in last year’s election. A government party teaming up with an opposition party to avoid a vote of no confidence brought by its coalition partners is a first even for Italy — we will now have to wait until next week to find out if there will be a vote.

Whichever way we turn, majorities will be tenuous bar an election and an election would come at the worst possible moment, because Italy needs to pass its budget for approval by the EU.

Cornelia Meyer

The Italian government has a five year term. Parliamentarians across the world like the status and stipends associated with the office, and many would fear for their positions, given the surge in popularity of Salvini’s Lega. This will be a factor in whether the vote and a subsequent election has a chance.

Tuesday night has redrawn the political fault lines. Renzi’s coup might open the possibility of other government coalitions. There are the PD and the M5S who together achieved slightly above 50 percent last March. Salvini can talk to his former ally Silvio Berlusconi and his Forza Italia party, or to the “post-fascist” party Fratelli d’Italia.

Whichever way we turn, majorities will be tenuous bar an election and an election would come at the worst possible moment, because Italy needs to pass its budget for approval by the EU. A failure to come up with a budget would not just get the country (the EU’s third largest economy after Brexit) in hot water with Brussels. It would also have serious ramifications within the country, as it would lead to extraordinary measures. A budget which was passed by a transition government with a tenuous majority would lack credibility.

The next few weeks will be eventful: Salvini has already started campaigning. Berlusconi will want his pound of flesh for co-operating with the Lega. The founder of M5S Beppe Grillo, who categorically refused to work with the PD, has changed his mind. Di Maio is weakened, while Renzi warns that Salvini would be a force for bad and shift the country too far right. It will be interesting not only for Italians: The EU and the markets will watch Italy’s game of thrones closely, too.

  • Cornelia Meyer is a business consultant, macro-economist and energy expert. Twitter: @MeyerResources
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