• Text Size
  • Contrast
  • 2018/03/13
  • 0

Italy: where is the missing piece of the electoral puzzle ?

Identity-based fear and economic precarity: the roots of anger

A quick analysis of the results reveals four key facts: no party or coalition won a majority; the Five Star Movement (M5S) came top; the centre-right coalition was the leading political grouping in terms of both votes and seats; and the centre-left coalition collapsed. The outcome is unequivocal. There was a massive swing in votes away from Matteo Renzi’s Democratic Party (PD) and Silvio Berlusconi’s Forza Italia (FI) to M5S and the Northern League, to the extent that the moderate parties are now in the minority. The success of M5S, although expected, was more decisive than anticipated (4-5 points higher than indicated in polls), especially in the south of the country, where voters distanced themselves from the traditional parties. Berlusconi lost in his southern stronghold and was weakened in the north (by 2-3 points) by the Northern League, which performed better than expected (+4 points). The Democratic Party collapsed (-5 points), as did the far-left Liberi e Uguali (LeU) (-3 points). The centre ground is disappearing. With Berlusconi’s defeat in the south, the balance of power within the centre-right coalition has tilted towards the Northern League, which has a stronger footing in the north. Berlusconi is fighting to hold onto his position as leader of the centre-right, now challenged by Matteo Salvini, leader of the Northern League. This will be all the more difficult now that internal dissension over Salvini’s leadership of the League is dissipating following the very strong election result. The Italian right will be sovereigntist and extremist. Forza Italia is facing further potential erosion, with moderate voters switching to M5S or PD. The centre-left has failed to consolidate its presence in its central Italian stronghold, or to maintain its presence in the south. The PD is likely to see more of its electorate switch to M5S, but it can also take advantage of the erosion of Forza Italia and the loss by the latter of its moderate voters. A new polarisation is emerging between the northern and the southern vote. Identity-based fear fuelling perceived insecurity, as well as very real economic precarity, are key to understanding this result. M5S’s electoral promises of universal income were a big hit in the south of the country, where the gap to the north has widened continuously since the crisis. M5S and the Northern League are united by their criticism of a European Union incapable of enforcing policy on the reallocation of migrants, placing too heavy a burden on those countries where migrants arrive in Europe. They also advocate a policy of controlling the country’s external borders.  

Is a grand compromise still possible?

The weaknesses of Renzi’s PD and Berlusconi’s FI have swept aside the idea of a grand coalition between the traditional right, left and centre parties. This was our – and the markets’ – baseline scenario before the elections.

That M5S or the centre-right can mount a successful attempt to run the country with a minority government looks unlikely to us.

Early elections cannot be ruled out if the parties fail to reach agreement. However, given the Italian and European institutional calendar, it would be difficult for this to happen before early 2019. A return to the polls would be even more unfavourable to the moderate parties. On paper, there are three possible coalitions if an agreement is reached, though a very broad coalition supported by all parties and guided by an institutional or ‘technical’ figure (a sort of ‘president’s government’) is also still a possibility:

  • M5S with the centre-left and far left: Matteo Renzi, who has now resigned as party secretary, has ruled out such an alliance. Even if the party’s right wing is open to an alliance with M5S and LeU, 90% of its members are opposed. While there are a few areas of common ground on the economy, such an alliance would be dangerous for the PD, which would do better to stay in opposition and try to siphon off moderate M5S voters jaded by experience of government.
  • M5S with the Northern League and the far right (Fratelli d’Italia): Matteo Salvini has explicitly ruled out such an alliance. The parties’ electoral bases are very far apart and their territorial interests are different. Their economic programmes are also divergent, apart from on migration issues and criticism of the European Union. It would also be difficult to reconcile the ambitions of the two young leaders of the party than won the most votes and the main party in the coalition that won the most votes. Some of the Northern League’s leaders have suggested an alliance of the whole of the centre-right with M5S, which would restore the balance of power. However, Berlusconi is, for the time being, opposed to such a move. M5S, which has named its adversary as Silvio Berlusconi and is campaigning on an anti-Berlusconi platform, would risk disappointing a big chunk of its electorate.
  • The centre-right with the PD: while such an alliance would be complicated for both the PD and the Northern League, it is not impossible. In spite of its defeat, the Democratic Party can still tip the scales faced with two forces neither of which has the majority it needs to govern. Under pressure to put an end to instability, such an alliance could come into being either with the direct support of the PD through an explicit manifesto agreement or indirectly through straightforward external support. This is still our baseline scenario. It is also the scenario markets have bought into, explaining their relative complacency over the election results.

A testing ground for Europe

In no sense is the result of the Italian elections an isolated case. It is in keeping with the process of merging social democracy and the neoliberal economic agenda, which has gradually come to occupy the centre of the political chessboard. A prosperous middle class was to have provided the social and political base needed to extend this centre. But then came the crisis, and the promises of prosperity for this middle class withered away in the face of growing inequality and economic polarisation in European societies, especially in those countries hit hardest by the crisis. The formula proposed by this grand centre could not prevent – and perhaps even magnified – this polarisation, thus creating fertile ground for the defeat of the centre and the rise of extremists. The Netherlands and Germany have managed to keep extremists at the margins of government; in Austria, they are included in more moderate coalitions; in Spain, they have weakened the traditional forces; and in Greece, they have folded under the weight of harsh economic reality. What sets Italy apart is that they will inevitably govern as part of coalitions that they will lead.

The question then arises: what European game will Italy’s next government play? Will it continue with the strategy of negotiating a cooperative solution aimed at securing fiscal room for manoeuvre in exchange for structural reform? These days, electoral manifestos no longer say anything about leaving the economic and monetary union. The new political consensus is to try to change the euro from within rather than pull out. The two most extreme parties will have to do deals with the more moderate ones if they want to avoid an unholy alliance between the two victorious and ambitious leaders. In spite of ever more generous promises, the time has now come to face reality. Will they be able to channel their voters’ rage by opening up a debate with European institutions and partners, by asking questions – often legitimate – without refusing to cooperate? Only this strategy could avoid tension in the countries of Northern Europe, which would otherwise, via a reappraisal of perceived risk, ask for more guarantees to lower this risk. This is all the more true given that these countries are accountable to their parliaments, where eurosceptic forces are on the rise. This point is crucial for a European agenda marked by planned reforms over the next year, with a central focus on finding a balance between reducing and sharing these risks. How can this potentially high-risk event be transformed into a sort of awakening that could constructively change the rules of the game? It would be wise to encourage such a process by taking a careful look at Italy as a test of the effectiveness of European policy in response to demands to support growth and the need to address the democratic deficit. This is the first time a central European country has experienced a situation hitherto reserved for Eastern European countries, whose institutions are supposedly weaker. Italy will therefore serve as a testing ground for the real stress test to assess the robustness of not only its institutions but of Europe’s as well. Since the political cycle is long, this test could speak volumes about the risks that could yet materialise elsewhere in Europe. If our baseline scenario – a sort of ‘change everything so everything stays the same’ – were to materialise, it might merely delay this stress test until the end of the parliamentary term or the next European elections.

 

 

Paola Monperrus-Veroni

paola.monperrus-veroni@credit-agricole-sa.fr

Follow info