1 March 2018

In what seemed a carefully planned move, Italian Prime Minister Paolo Gentiloni, French President Emmanuel Macron, and German Chancellor Angela Merkel appeared jointly before the media as they were arriving at the most recent gathering of European leaders. If it’s true that the Franco-German duo pays attention to their Italian partner only when developments in the country could spell disaster, the move is a sign that Europe’s leaders will closely monitor Italy’s vote this Sunday, and with some anxiety.

European Commission President Jean-Claude Juncker confirmed the concerns last week, warning the EU should prepare for a “no operational government” scenario, with the latest polls suggesting no majority is the most likely outcome of the ballot. This, or even worse an openly EU-hostile government in Italy, could represent an obstacle on the path to a European reform. And it’s also very bad timing, considering that Germany might on Sunday solve the political impasse which has characterised its last few months.

But while European leaders are right to monitor closely developments in the boot-shaped country, and in the face of an election that is among the most uncertain in memory, the potential reverberation of the Italian vote at the EU level should be qualified.

Everything changes so that nothing changes?

Italy’s position in Europe is characterised by two main features. First, it is a broadly Europhile country; even if its electorate has over time become increasingly critical of the EU, Italian voters tend to think Europe should do more, not less. Second, largely because of its chronic domestic instability, Italy carries a much smaller weight in EU circles than one would expect the third largest EU27 economy to do. The vote could slightly change this outlook, but more indirectly than directly.

On the first point, a right-wing government (or even more so a ‘sovereigntist’ alliance between the nationalist Lega (formerly Northern League) and the populist Five Star Movement (M5S)) could certainly shift Italy’s preferences on specific proposals tabled at the European level. For instance, Italy’s support for making the Spitzenkandidaten system a permanent feature of European elections, as well as for increasing the EU budget, might change. But overall the country is unlikely to become, even in the still remote eventuality of a sovereigntist government, a major spoiler within the EU.

The M5S has made clear over the last few months that it no longer intends to leave the Euro. Its leader Luigi Di Maio went as far as defining the Movement as a pro-European force and praised Macron’s call for an EU reform. And although the Lega remains more Eurosceptic, its hypothetical governing role seems destined to be that of a junior partner. Even under the scenario most adverse to the EU therefore, Italy would likely turn less integrationist, but not to being outright anti-EU.

Nor is Italy’s weight within the EU institutional context expected to increase – in fact if anything it risks decreasing. Domestic instability is unlikely to disappear regardless of the vote’s outcome. Even assuming that the right-wing coalition can secure a governing majority, this is likely to be small. And considering the need to reconcile different views within the coalition – divisions between Berlusconi’s Forza Italia and the Lega have already emerged during the electoral campaign on several issues, including on attitudes towards the EU – it is unlikely to be particularly stable.

The prospects are not different under other scenarios. In the case of larghe intese (a grand coalition), any government so formed will again need to balance between the diktats of different parties supporting it. And knowing that any political force could tear it down if it were to perceive an advantage in triggering new elections, the government would not be able to take decisive or controversial stances.

Finally, should demands for a rerun prevail in the absence of a governing majority, Italy would be left in the hands of a caretaker, transitional government. The latter, with no real popular mandate and a short life expectancy, could not have a strong voice in Europe either. No matter the outcome of the vote, therefore, it seems that the trend that sees Italy punching below its weight in European circles is destined to endure for some time more. And this will only be exacerbated when Mario Draghi is replaced next year as President of the European Central Bank.

Can the vote still make a difference?

Saying that the vote will not have an immediate dramatic effect on Italy’s positioning within the EU however, does not mean that the results will produce no consequences on Italy’s European stance at all. Rather, it seems that the consequences will be mostly indirect; a product of the medium-term effects the vote might have on Italy’s domestic situation.

The real question mark revolves around the ability of any future government emerging from the ballot, no matter its composition, to follow up on the country’s economic recovery. The latter has contributed to dilute Euroscepticism in Italy, which had reached its peak at the heights of the economic crisis and the national economy’s recession in which EU-imposed rules played a crucial role in the view of a many Italians.

The nature of some of the reforms promoted by successive centre-left governments is questionable (for instance, while unemployment has decreased in recent years, the majority of new jobs are temporary contracts). But the Italian economy is growing, albeit slowly, with some real, if modest, impact on people’s finances. It is unclear if any new government would follow up and continue on the reforming path initiated at the domestic level. Both the M5S and the right-wing coalition put less emphasis on the need for structural reforms at home than it has been so far the case for centre-left governments.

In such a landscape, it is not possible to rule out a new slowdown for the Italian economy. If this happens, several parties, from Berlusconi’s Forza Italia to the M5S, could be tempted to revive the EU-hostile narrative they adopted at the peak of the economic crisis. Furthermore, in the event of an economic slowdown, any incumbent government would try to shift blame for its ineffectiveness. Pointing at EU rules would be an easy target and rampant Euroscepticism could return in Italy – not to mention the troubles that new economic hurdles in the country could create to the Eurozone regardless of any government’s political line.

It is for these reasons that Europe cannot afford to ignore the Italian vote and developments in its aftermath.