Italy election: It’s about Brussels, not Rome

Any new Italian government will have to face the economic and political reality of the EU

18:17 March 5, 2018
Silvio Berlusconi

Madrid: With most votes counted in Sunday’s general election in Italy, the only certainty now is that it will likely take weeks for any new coalition government to take shape — a prospect that ensures the European Union will be reluctant to make any concessions over easing fiscal and economic restraints to the new eventual administration.

The Five Star Movement (M5S) has ended up as the largest single party, having roughly one-third of seats both in the Chamber of Deputies and the Senate of the Republic. Under Italy’s constitution, any party or coalition group requires a majority in both houses. M5S had campaigned on the premise that it would not enter into a coalition agreement. If true to its word, it has ruled out the prospect of partnering with the Democratic Party, which formed the previous government but saw its popular support broadly collapse to just 16 per cent.

The hard right and populist Northern League took 18 per cent of the votes — better than projected — and should it team up with Silvio Berlusconi’s Forza Italia and Brothers of Italy, will still be far short of a ruling majority in both houses, with roughly 37 per cent support.

What unites M5S and parties on the centre-right is a growing disdain for the Euro, the single currency used by 19 members of the European Union. Popular perception is that tight fiscal and budgetary constraints on EU member states under the Fiscal Compact agreement, limit the amount of borrowing and deficits governments can utilise. With unemployment at 10.6 per cent across Italy — and at 24 per cent for those under 25 years of age — Italians are eager for an economic boost to improve their lot. That, along with the fact that for every €1 (Dh4.52) in their economy, another €1.34 is owed elsewhere, makes easing the Fiscal Compact a priority for any new administration when formed.

All parties want a new financial deal with the EU. The fact that there is no clear winner after Sunday’s vote, and forming a government will take time — with no guarantee that any new government will have staying power — means that any new Italian coalition government will be a weak bargaining position with European officials.

What also doesn’t help is that given the mess and uncertainty that has been created by the decision of voters in the United Kingdom to leave the EU, Brussels is in no mood to compromise either with Britain — or with any new Italian government seeking a new deal on its finances.

In Germany, after five months of talks following last September’s election, members of the Social Democrat Party have approved a coalition deal that secures German Chancellor Angela Merkel’s role as the firm leader of the EU. She, along with French President Emmanuel Macron, are eager to kick start economic and political reforms, strengthen the power of the EU. That new reality in Brussels will thwart any political and economic aspirations of an eventual weak government in Rome.

Italy faces political gridlock

Italy is facing political instability aer voters delivered a hung parliament in the country’s general election. Traditional parties lost out to anti- establishment and far right groups which attracted record numbers