UPDATE 22/05/2018: It’s taken almost two months of backroom wrangling and fought coalition negotiations, but it looks like Italy is finally about to get a new government. Giuseppe Conte, a lawyer and professor of law (labelled a “political novice” by the media) has been nominated as the preferred choice for prime minister by both the Five Star Movement and the League.
If confirmed, Prime Minister Conte would represent a massive headache for the more fiscally-conservative members of the European Union. Italy’s new coalition government would presumably pursue a more expansionary fiscal policy (spending more and cutting taxes), and would push for a significant write-down of Italian debt. There were similar concerns when the radical left SYRIZA was elected in Greece in 2015, and ultimately a compromise was reached in that case. However, Greece represents roughly 1% of the EU economy. Italy, on the other hand, is the fourth-largest economy in the European Union. The threat to the Eurozone of a bust-up between Member States is surely much more significant today.
So, what happens now? Is a more Eurosceptic, pro-growth Member State exactly what the European Union needs to give it a kick in the pants? Could a more populist coalition government in Italy help promote reforms across the bloc? Or Is Italy now on a collision course with the more fiscally-conservative EU states? Let us know your thoughts and comments below!
ORIGINAL 06/03/2018: A pox on both your houses! That was basically the message from Italian voters as they rejected the political mainstream. Instead, so-called populist, anti-establishment parties managed to bag fully half of all votes cast.
The biggest single winner was the populist Five Star Movement with over 32% of the vote. However, the right-wing coalition of former Italian Prime Minister Silvio Berlusconi’s Forza Italia party and the anti-immigration Lega Nord (recently rechristened as just “the Lega”) came in first with 37%. In one of the biggest upsets of the night, Matteo Salvini’s Lega is now the senior partner in the right-wing coalition with 17% of the vote compared to Forza Italia’s 14%. Salvini argues that the result gives him a mandate to form a government as Italy’s next prime minister (a possibility which has other European governments quaking in their boots).
The populists cannot be ignored any longer. Unlike in Germany (which recently announced a new government), the electoral mathematics do not support a “grand coalition” of the centre. Instead, any governing alliance will need to draw support from either the Lega or the Five Star Movement. A deal between the two biggest populist parties has apparently been ruled out by Salvini.
What does this mean for Europe? It will likely take weeks of negotiations (and possibly another election) before Italy can form a government. Is the EU ready for Prime Minister Matteo Salvini, a man who once called the euro a “crime against humanity” and has pledged to begin the mass deportation of half a million people when in office?
Are the Italian election results a disaster for Europe? Will Italy need to hold a new election, or can a government be formed? Let us know your thoughts and comments in the form below and we’ll take them to policymakers and experts for their reactions!