Four scenarios for Italy’s legislative elections in 2018

Four scenarios for Italy’s legislative elections in 2018

As Italy readies itself for the upcoming parliamentary elections, the country faces a heightened risk of political uncertainty. None of the major parties may garner sufficient votes to govern, or even to form a governing coalition. Alexander Brotman and Nicola Bilotta present four scenarios that could result from March polls.

Italy may not be mired in a separatist crisis, or facing existential problems about its relationship with Europe, like Spain or the UK. However, as the third largest economy in the eurozone, its future is important to how ongoing debates such as the migrant crisis and Brexit negotiations continue to shape European politics and public life. The upcoming March 2018 elections will expose risks from left-wing and right-wing Eurosceptic parties, which seek to undermine Franco-German alliance building across the continent, as well as traditional, more moderate centre-right and centre-left parties, which seek to maintain the status quo.

Uncertainty often rules the Italian political scene, and in this case, instability looks once again like the only possible winner. Any political party will need to establish a coalition to be able to govern and still, in this case, none will be sure to actually have the number to lead the country. While Movimento Cinque Stelle (M5S) leads the survey, its inability to cooperate with other parties will condemn it to a marginal role. In this unpredictable future, the strongest coalition seems to be Lega Nord (LN), Fratelli d’Italia (FdI) and Forza Italia (FI). But even their coalition is far from the 40% of votes needed to get seats enough to properly govern.

With the Rosatellum bis electoral system, there is a real danger of institutional blockages. In the case of a technocratic or  minority government, any political leader will struggle to find the support to govern. But re-running a general election under the same electoral law will not help to stabilize the country because it would produce a similar outcome: an ungovernable parliament.

Scenario 1: A right-wing alliance

Forza Italia – Lega Nord – Fratelli d’Italia

This coalition would be unlike past right-wing governments. Historically, FI played a dominant role while the other parties were just complementary actors. In the election of 2006, FI got 23.72% of votes while LN only received 4.58%. The hegemony of Berlusconi’s party was confirmed in 2013, when his party, Popolo delle libertà, gained 21.56% of the vote, whereas LN recorded 4.09%. Nowadays, FI and LN are running with similar percentages of votes, according to recent surveys.

As the onus of power has shifted inside the coalition, it will be difficult to predict how FI and LN will reform the Italian economy. Even though Berlusconi has been quite critical of the European Union and the Euro, he believes in a liberal and moderate centre-right government. His party does not aim to fight the Italian membership of the European Union, but rather FI maintains a political orientation close to the European People’s House.

On the contrary, LN’s principal flag is strong Euroscepticism and domestic federalism.

“The Euro is a dead currency. (…) The Euro has been one of the worst crimes against humanity in history”.

Matteo Salvini, Lega Nord

LN blames the EU for being the primary constraint to Italy’s economic recovery and the party is in strong opposition against the euro. It has recently sided with the National Front in France, the Party for Freedom in the Netherlands, and the Freedom Party in Austria, which means any desire for EU reforms is coupled with profound disagreements and distrust towards the Brussels establishment.

Despite the fact that Italy is unlikely to rescind the Euro as a currency, the right-wing coalition may have a stronger sovereign position, as the leverage of anti-European allies has increased. Therefore, the observation of the European fiscal compact may be threatened because both Berlusconi and Salvini have promised anti-austerity economic reforms.

On the one hand, LN proposes a populist agenda: an increase of productive public investments and the nationalization of strategic companies. On the other hand, Berlusconi promises a consistent rise for the minimum retirement benefits from 500 euro to 1000 euro. In addition, he means to introduce a flat tax system. The centre-right and moderate parties clearly have different measures to boost the Italian economy. However, they share a view of the European fiscal compact as negative.

From a foreign policy perspective, a LN/FI coalition would be strong on terrorism and international security, but hesitant to follow the US lead on multilateral interventions in the Middle East. The factor of uncertainty, when compared to a possible FI/PD coalition, would be Russia, as both parties are opposed to sanctions levied against Russia after the annexation of Crimea, and LN even signed a cooperation protocol with Vladimir Putin’s United Russia party in March of 2017. LN leader Matteo Salvini and FI’s Silvio Berlusconi have both praised Putin as a model leader, and a coalition of both parties would undoubtedly cause friction with France, Germany and other major European states.

Probability: 85%

Scenario 2: A left-leaning partnership

Partito Democratico – Left Wing Parties

Dialogue between Partito Democratico (PD) and small extreme left-wing parties is currently on hold, but their alliance seems to be the only way in which left-wing parties would be able to establish a government. Despite the transformation initiated by Matteo Renzi in Partito Democratico, there is still political space to establish a coalition with Possibile, Sinistra Italiana and Articolo 1.

The other left-wing parties accuse Renzi of having embraced conservative reforms. They disapprove of how the PD’s government reformed the labour market through the Job Act, and how it is dealing with the migrant crisis. Nevertheless, they have expressed willingness to run together with PD if Renzi goes back to promoting policies that they consider to be “left wing”.

Whereas PD is moderately critical about the European fiscal compact and believes the country needs more economic flexibility to boost its recovery, a government supported by other left-wing parties may lead PD to strongly challenge the EU and its economic policies. The Italian Left has openly called for the ‘controlled disintegration of the Eurozone’ and other anti-establishment measures that would rattle the market.

The balance of power between PD and the other left-wing parties will be determined by the outcome of the election, but the PD would very likely have significantly more leverage within the coalition. PD certainly has more international legitimacy as well as considerable governing experience, which would provide some level of reassurance to Berlin and Brussels, but an electorate eager for change and bold new ideas means this coalition could be unpredictable in treading the line between stability and radical reforms.

Probability: 40%

Scenario 3: The populists

Movimento Cinque Stelle – Left Wing Parties

M5S is an unpredictable political player. Alessandro Di Battista, one of the party’s principal leaders, said his party aims to propose a referendum on Italy leaving the Euro. Other representatives go so far as to question whether the country even benefits from being part of the EU. However, until now, the electoral platform of M5S has not offered a clear position over the relationship between Italy and the EU.

The party promises greater public investments to support Italian industry and essential public services for citizens. In addition, it proposes to introduce a system of basic universal income. Although M5S claims its government will find sources of funding by cutting unproductive public companies and bureaucratic costs, analysts are not convinced its economic plan is realistic.

M5S claims that it will not form a coalition government with any other political party. Its candidate for Prime Minister – and current front-runner in the polls – Luigi Di Maio has said he welcomes support in the legislature from rival parties, but is not willing to give up any cabinet seats in exchange for a coalition deal.

Due to its anti-establishment nature, M5S is not an ideological party, and shares governing platforms with both right and left-wing parties. But, in a game of probability, it is easier to picture a scenario in which M5S governs with the support of the new left-wing parties such as Possibile, Articolo 1 and Sinistra Italiana.

This coalition would have the least amount of prior government experience and the highest degree of enthusiasm to transform the political system and get rid of establishment politicians. On foreign policy, the left-wing parties would likely support M5S’s desire to reject international trade agreements, end sanctions against Moscow, and even hold a referendum on leaving NATO. This coalition would stand in sharp contrast to France and Germany when it comes to European integration, the euro, and other policy matters, and would likely have more in common with newer EU members in Central and Eastern Europe on matters of foreign policy and asylum seekers.

Probability: 60%

Scenario 4: Preserving the status quo

Forza Italia – Partito Democratico

FI and PD are an unlikely coalition, but would be the most stable, pro-Europe and status-quo. Despite having divergent political views, their alliance would assure a commitment from Italy to European economic rules. Since 2011, their cooperation has been crucial to guarantee the country’s political stability.

Renzi and Berlusconi always argued that their alliance was a temporary necessity to save the country from a potential default. But it worked – according to Openpolis, between 2011 and 2014 the head of the upper house of FI and PD voted for the same outcomes 90.9% of the time.

A technocratic or political government supported by FI and PD would be more inclined to observe European economic rules and promote fiscal stability. Berlusconi and Renzi would likely present their cooperation as the only alternative to instability and ungovernability from M5S and LN.

This would also be true in the foreign policy sphere, as this alliance would signal continuity with other EU members and the US, with no drastic changes to policy positions on Russia, the Islamic State or asylum seekers. In the midst of ongoing Brexit negotiations and wavering policy positions from the US, this coalition would be more in line with Germany and France and thus present a united front on some of the most crucial international security challenges in the year ahead.

Probability: 70%

European Populism and Italy in 2018

Europe will continue to face tests from populism in 2018, mainly from Central and Eastern European countries which seek to challenge the Franco-German partnership, after France has elected a centre-left president in Emmanuel Macron and Germany looks set to have a centrist alliance between the SDP and CDU. Further east, Andrej Babis of the populist ANO 2011 party will become Prime Minister of the Czech Republic, and Slovakia, Hungary and Poland will likely experience strong populist movements built around migrant quotas, security and questions of European identity. With LN and M5S in Italy adding their Eurosceptic, anti-establishment platforms to the political mix, populism will remain a challenge across the EU’s oldest and newest member states.

Categories: Europe, Politics

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