17 October 2017

On Thursday last week, the lower chamber of the Italian parliament finally passed a long-awaited new electoral law. The law, which provides for a mixed proportional and majoritarian electoral system, will now go through Senate scrutiny. If approved, it will then be used in the parliamentary elections which must be held by next spring – and could have significant implications for the chances of Italy’s anti-establishment party, the Five Star Movement, to lead the next government. After the strong performance of Eurosceptic parties in Germany and Austria, these elections may prove yet another test for Europe and have important implications for the future of the EU and for the Italian stance on Brexit specifically.

The Italian electoral reform

While much uncertainty reigns over the possible result of the next elections, the proposed electoral reform has implications for the chances of different political forces – particularly Eurocritical and Eurosceptic parties – to enter into power.

The law, which provides for a two thirds proportional (candidates elected in plurinominal constituencies through lists) and one third majoritarian (uninominal constituencies according to the first-past-the-post system) structure, is mainly aimed at harmonising the electoral arrangements for the two Chambers of the Italian parliament, which are currently elected following two different systems. This is considered a key prerequisite to strengthen the government that will emerge from the elections; given the perfect bicameralism which characterises the Italian political system (where the Senate has the same powers as the lower Chamber), a different majority in the two chambers would produce a hung Parliament.

However, it has been questioned whether the proposed reform can really guarantee a stable government. The majoritarian dimension of the proposed reform goes some way in addressing the issue, incentivising pre-electoral coalitions, a measure which has been indicated as particularly beneficial to the Right in Italy and as a way to reduce the chances of a Five Star Movement’s electoral success. Its proportional aspect, however, implies that no political force, at least based on current polls, will likely be able to secure a governing majority, which would result in the necessity to strike post-electoral alliances and demand a grand coalition.

The Italian view on Brexit

Italy and the UK are traditional allies. Italy supported the UK’s bid to join the EEC in 1973 and has historically seen Britain as an important counter-weight to the Franco-German axis on the European stage. The British decision to leave the EU has raised serious concerns in Italy, which worries about an unchecked Franco-German hegemony.

Italy is therefore pushing to maintain close relations with the UK, in an effort to keep the country as closely tied to Europe as possible. The current government, led by Prime Minister Gentiloni (who replaced Renzi in autumn last year), has warned against punishing the UK, a temptation which the Italian Prime Minister has reported circulating among some other European leaders.

As an example, in the ongoing debate on the Council’s conclusions on Brexit, which will be made public at the next summit of European leaders later this week, Italy supports the milder approach favoured by the Council President Donald Tusk. Germany and France, on the contrary, are the main advocates of a harder line and have demanded to include a reference to the continued jurisdiction of the ECJ on citizens’ rights as part of the Council’s conclusions.

With elections due next spring, the Italian government might nonetheless well change, opening up different scenarios. In this light, it is worth taking a look at where the main contenders in the next elections stand in respect to Brexit and in terms of their broader European view.

The Contenders

Democratic Party

A government led by the centre-left Democratic Party, currently polling just below 27 percent, would represent the least disruptive option. In this case, Italy’s stance on the EU and Brexit negotiations would probably not undergo a significant shift. Italy would likely continue to support an agreement aimed at securing close relations with the UK, but would also subordinate this goal to its agenda for further EU integration and reform.

In Europe, such a government would push for greater political integration and for a reform of the Eurozone, including proposals for greater fiscal and banking integration and the creation of a Eurozone Finance Minister – reforms not dissimilar from the ones advocated by the French President Emmanuel Macron. It would also insist on the need for greater fiscal flexibility aimed at incentivising growth, while giving continuity to the process of structural reforms on the domestic side, started by Renzi’s last government and continued under Gentiloni.

Furthermore, should we witness Matteo Renzi’s come-back as Prime Minister, we might expect to see a more assertive Italy on the European scene. This would in fact not only be a product of the change in leadership, but also – and more significantly – because the new government, contrary to the current one, would be able to rely on a popular mandate.

Lega Nord / Forza Italia

One plausible scenario sees the once-separatist right-wing Lega Nord [Northern League] and Berlusconi’s Forza Italia as the main forces in a right-wing coalition. Such a coalition would encompass views which significantly diverge, particularly when it comes to their European inclinations. While this electoral alliance has precedents in Italy under previous Berlusconi’s governments, it would this time be formed in a context of different internal power dynamics. The Lega Nord, the most openly Eurosceptic party in Italy, is currently polling between 14 and 15 percent; at the same level, and indeed higher according to some polls, than Berlusconi’s party.

Matteo Salvini, the leader of the Lega Nord, is arguably the most fervent antagonist of the EU in Italy. On the day the UK triggered Article 50, he congratulated the British people for unchaining themselves from the “Brussels cage” and saw it as an omen of Italy following the same path. He also vowed that Italy would adopt a friendly spirit towards the United Kingdom during the negotiations. A good deal for the UK would crucially benefit his party, as it would prove that there is an alternative for Italy outside the EU. Interestingly, in the last European Parliament vote on the status of negotiations, when the Parliament demanded that agreement on sufficient progress should be postponed, the Lega Nord was the only Italian party to express a negative vote.

However, more recently the Lega Nord seems to have softened their European position, possibly to avoid openly clashing with Berlusconi’s Forza Italia on the issue. Although in the past the media mogul’s relations with the EU have witnessed ups and downs, and as recently as March he had suggested a double currency for Italy, his party has adopted a more Europhile attitude in the run-up to the election campaign. This might be influenced by the possibility of the current president of the European Parliament Antonio Tajani running as Forza Italia’s Prime Ministerial candidate.

It is difficult at this stage to predict what approach such a variegated coalition would take towards the EU, let alone on Brexit negotiations. Given the strong pro-business attitude of Forza Italia – and to lesser extent of the Lega Nord – they would likely push for a bilateral trade deal which would ensure minimum losses for Italian businesses. However, it seems unlikely that such a government could act as a key broker in a UK-EU deal, as Lega Nord would likely be met with hostility by key European players. While a right-wing government would furthermore demand a revision of the European Treaties, its credibility and possibilities to achieve any success in Europe, would be connected to its ability to deliver reforms at home and strike key alliances on the continental stage. That is why, following a troubled relationship in the past, Berlusconi is pushing to re-establish a positive relation with the European People’s Party (EPP).

Five Star Movement

As noted above, should the new electoral law be approved by the Senate, the Five Star Movement might see their chances of leading a government reduced, despite polling as the second most popular party in Italy around 26 percent – very close to the level of support of the Democratic Party. Since such a law would probably require a broad governing coalition deal, it is difficult to see how the anti-establishment party, which has in the past refused to negotiate with any other political force, could command a governing majority. Yet, the electoral campaign could still shift electoral preferences and the possibility of a Five Star government cannot therefore be ruled out entirely.

The foreign policy stance of the Movement is quite controversial. They are fiercely critical of the EU and of the Euro in particular. In the past, they have also called for a referendum on Italy’s membership of the Eurozone, although this no longer features in the electoral programme which instead calls for “a radical revision of the Treaties, agreeing on solutions alternative to the Euro.” The Five Stars support Brexit as an expression of the will of British citizens. Having referred to the warnings of the Remain campaign in the run-up to the referendum as a “Project Fear”, they have stressed how it is in the interests of both the UK and the EU to negotiate close bilateral relations.

Yet, commenting on the Brexit referendum, the party, which sits with UKIP in the European Parliament, have remarked that they believe the EU should be reformed from within via institutional reforms and that they do not wish Italy to leave the bloc. The Five Star Movement has furthermore criticised free trade agreements such as the TTIP and CETA in the past and has made opposing EU FTAs a key point in their foreign policy programme. There is therefore a possibility that they might take a similar stance in any EU-UK FTA negotiation.

A Five Star government at its first test of power on the national scale would likely focus on domestic issues and would not take a major interest in the Brexit negotiations. The issue might become more relevant when key Italian interests are concerned – the Five Stars have made clear that any agreement should guarantee the rights of Italian citizens living in the UK and ensure that the UK respects its budgetary commitments – and should Italian media provide for a substantial coverage of the issue. Such a government, lacking key alliances in Europe, would encounter difficulties in having its voice heard on the continent.

Conclusions

In short, in different forms and for different reasons, Italian parties look at the UK as a friend with whom the relationship should remain as close as possible. None of the Italian main electoral contenders has an interest in pushing for a hard approach in Brexit negotiations. (Unless the Five Star take a harder approach on a UK-EU FTA if this is seen as favouring big businesses over consumers’ guarantees and standards).

Next spring’s elections are therefore unlikely to produce a major shift in the Italian position, and the country will keep pushing to ensure a deal with the UK can be secured. Yet, whatever the scenario that will emerge following the next elections, for the time being, with the electoral campaign absorbing most of the energies of the Italian key political players, Brexit will unlikely be a high-saliency issue in the Italian political debate.

While the Italian stance on Brexit is not likely to go through a significant change, the ballots could nonetheless substantially change Italy’s take on Europe and on a much-demanded European reform. In this respect, while a government led by the centre-left would result in no significant change, the prospects of a right-wing government with the presence of the Lega Nord, or even more so, a Five Star government, would radically change the scenario. In particular, these governments would likely oppose a European reform in the form demanded by French President Macron and, in the case of the Five Star Movement, might even lead to an open clash between Italian and European positions on key issues in the European agenda.