14 December 2017

The 4 March will probably be the day of the next Italian elections, the dailies Repubblica and Il Corriere della Sera reported yesterday. The date is said to satisfy the preferences of the main Italian parties, as well as the desiderata of the President of the Republic, Sergio Mattarella. It’s possible that the Italian parliament might now be dissolved before the end of the year, with the President of the Republic’s announcement expected between Christmas and New Year’s, most probably on 27 December. Nonetheless, some uncertainty on the date remains. It’s also unclear what results the ballot will throw up and what the political future of the country will be.

The Italian elections will also be an important test for the future of the EU. Should the ballot crown the triumph of the Five Star Movement or a right-wing coalition – even though they might fail to secure a governing majority – calls to reform the European Union will be strengthened. But those calls might not run in the same direction as plans outlined by French President Emmanuel Macron. The criticism of the Five Star Movement and of Italian right-wing parties towards the common currency (although this does not amount to outright calls to withdraw from it, at least in the short term) and their emphasis on national sovereignty, for instance, rests uneasily with the vision outlined by the French President in his Sorbonne speech.

The latest political developments

In a previous blog, I outlined the existence in Italy of three distinct poles (centre-left, centre-right and the Five Star Movement), suggesting that none of them might be able to secure a stable governing majority next year. The landscape is somewhat in evolution, but going by the latest polls this risk has not disappeared. Support for the Five Star Movement is stable – the party has polled first in the country (with over 27 percent) for some time now. Support for the other two camps looks more fluid.

On the centre-left, Matteo Renzi’s Democratic Party is in a more difficult position than it has been during the current legislature. The party has experienced an electoral decline and, while still solidly in second place, it is now down to less than 25 percent. More importantly, the fracture between the party and the forces to its left has cemented and the most recent attempts to secure a pre-electoral alliance have failed. In the absence of further developments, this means the Democratic Party will run virtually alone in the next contest, with the possible marginal exception of small allies. The break with other left-wing forces risks losing Renzi’s party a sizeable share of its electorate. They could shift to a new coalition of left-wing parties, Liberi e Uguali, reuniting Democratic Party exiles and other forces on the left and headed by the current president of the Italian Senate, Pietro Grasso.

On the right, Berlusconi’s Forza Italia has experienced a gradual but constant growth in polls. Now close to 16 percent, it is accredited as the lead party in a coalition which also brings together the Lega (League, formerly Northern League) and Fratelli d’Italia. While good news for Berlusconi, who once more confirms electoral campaigns are his natural environment, Forza Italia’s advances have been paralleled by a drop in support for the Lega. This might make it easier after the elections to form a right-wing government with broader appeal to more moderate voters. Yet, the drop in votes for the Lega might make its leader, Matteo Salvini, who has always resisted unreservedly embracing the alliance with Berlusconi, question the medium-term electoral benefit for his party to join such a coalition. Tensions between the two parties have already increased.

Prepare for uncertainty

In such a context, Italy is preparing for a period of post-electoral uncertainty. Should the ballot fail to produce a stable majority, post-electoral alliances would be required to form a government. Yet, the Five Star Movement’s allergy to striking deals, coupled with fears on the centre-left and right alike that a grand coalition could reduce their electoral appeal would make new elections a more likely option, particularly should Berlusconi’s Forza Italia’s upward trend be confirmed. The tycoon would hope to win a majority in rerun elections.

The scenario in the country might therefore resemble that experienced by Spain in 2015 (and the one unfolding now in Germany), where a prolonged period of uncertainty followed the elections. Should such a picture emerge, Italy might nonetheless have an advantage compared to other countries. Throughout its post-war history, periods of political uncertainty have been the norm rather than the exception and Italian institutions have grown used to deal with them.

The President of the Republic, Sergio Mattarella, is already preparing to face an uncertain situation. The choice of the election date, which has been anticipated (compared to earlier suggested dates), reflects this necessity. Mattarella is exploring the possibility of asking current Prime Minister Paolo Gentiloni to remain at the head of government for some time after the elections, an option which could win Berlusconi’s favour too. Gentiloni, accordingly, is not expected to present his resignation once the Parliament is dissolved, but rather to simply declare his task “concluded”. Bringing forward the election date is intended to help protect Gentiloni’s credibility by reducing the time when the incumbent government could lose its majority from pre-election defections.

What this means for Europe and for Brexit

Although political instability in Italy is not uncommon, further uncertainty in the country in the wake of the German troubled post-electoral situation, might be problematic for the EU. In particular, should coalition talks fail in Germany, the prospect of precarious governments in two of the three EU27’s largest economies would represent a tough test for Europe. French President Emmanuel Macron could of course make virtue out of necessity, exploiting uncertainty to push forward his role as the continent’s new guiding light. But how far can his European reform plans go without reliable support from key allies such as Italy and, most importantly, Germany?

Instability in Italy would have a more limited impact on Brexit negotiations. In fact, should Paolo Gentiloni be confirmed as Prime Minister for some time after the next elections, this could be good news for the UK. In a recent interview with the Financial Times, Gentiloni called for a “tailor-made” Brexit trade deal, which confirms he is a friendly voice within the EU27 bloc. That said, without any clear winner in the next elections, the position of any transitional government in Italy would be precarious and its voice on the European scene weakened, which would inevitably limit its influence in the negotiations.