What Italy needs is strong and stable government

What Italy needs is strong and stable government

Italian President Sergio Mattarella speaks to the press after consultations with political parties' leaders, in Rome, Italy, August 22, 2019. (Reuters)

Italian President Sergio Mattarella’s deadline for political parties to form a new government expires on Tuesday. Italy has had more than 60 governments since 1945, and the latest political instability is unsettling not just domestic audiences, but international ones too.  

Italy, a key G7 nation with the fourth-largest EU economy, has the second-biggest debt load in the eurozone, and its banking sector is under significant stress with under-performing loans. The fear is not just of fresh elections, with the uncertainty they would bring, but also that a new administration would be weak, unstable and incapable of securing the structural reforms that the country badly needs — raising the prospect of further political paralysis.

The stormy 14-month coalition between the far-right League and anti-establishment Five Star Movement (M5S) collapsed last week.  Mattarella summoned leaders of the main parties — the coalition partners plus the smaller far-right party Brothers of Italy, the right-of centre Forza Italia and the center-left Democratic Party (PD) — and gave them four days to form a new administration.

Mattarella will meet the leaders again on Tuesday and “make the necessary decisions.” If no one can form a new government, the president must either appoint a caretaker prime minister and government, or order new elections.

Last week’s government collapse was no great surprise.  Relations between M5S and the League had been deteriorating for months.  The administration, whose formation initially sent shockwaves around Europe, was the result of elections in March 2018 in which no party or bloc won an overall parliamentary majority.  

The headlines then were captured by M5S, founded a decade ago by comic Beppe Grillo and now led by Luigo Di Maio, which capitalised on a rancorous campaign dominated by immigration and economic woes.  However, since then it is the League that has made political headway and surged in the polls.

The latest bout of Italian instability could bring new elections or a hastily constructed government that could again comprise the League and M5S.

Andrew Hammond

 

Part of the reason for MS5’s decline is that it reneged on its pledge not to join a coalition.  Ultimately it took a leap of faith to align with the League, with which it has key policy similarities, after their strong showing in last year’s election; together they won more than half the vote.

Despite these tensions, a new alliance between these two parties cannot be ruled out, in part because of the poor showing in last year’s elections of the two political forces that have dominated Italian politics for decades — Forza Italia and the PD. 

However, concerns are growing again about Italy’s future.  There remains significant public disquiet over corruption, the migration crisis, and the fragility of the economy, with double-digit unemployment and low growth.  Indeed, only Greece has fared worse in the eurozone in the past two decades, which has fueled the political success of anti-establishment politics.

New elections could again be inconclusive. A relatively new voting system that is two thirds proportional representation,and one third first-past-the-post makes it harder for one party to win an outright majority; the threshold is now about 40 percent of the vote, to which no party has come close in recent years.

It is for this reason that Mattarella may seek a review of election law to see if a less proportional, more “first-past-the-post” system is better suited to Italy’s needs.  This would repeat the constitutional debate in 2016, when Prime Minister Matteo Renzi’s planned reforms to bring greater political stability were voted down in a referendum.

Renzi’s argument then was that more stable majorities were needed in the legislature, bringing stronger government that would enable reforms needed to enhance economic growth and reduce the public debt.  However, opponents of the reforms, including ex-technocrat prime minister Mario Monti, said they would have given the executive excessive power and made government less accountable.   

So the latest bout of Italian instability could bring new elections or a hastily constructed government that could again comprise the League and M5S.  However, in most plausible scenarios a key danger is that a new administration will be weak, unstable and incapable of securing the structural reforms that Italy badly needs.

  • Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics
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