Overview: Italy, Post-Elections

The results of the Italian general election were inconclusive. Mr. Bersani’s centre-left coalition won the most votes, but due to Italy’s complicated electoral system, the centre-left will not be able to form a government without creating a coalition with other parties. According to Italian law, a government has to win a vote of confidence in both chambers of Parliament. Mr Bersani only has a majority in the lower house, but not in the Senate. In the lower house, the coalition that wins the most votes at national level is guaranteed a majority premium, but in the Senate, the premium is based on regional vote. Mr. Berlusconi’s centre-right coalition conducted a populist and anti-austerity campaign that ended up performing much better than opinion polls had suggested before the election. As a result, they are able to form a blocking minority in the Senate. Mr. Monti’s alliance performed poorly; his cabinet pushed through several much needed fiscal and structural reforms in just one year, which significantly strained domestic demand. Although the impact on financial markets was clearly evident, effects on the real economy were not visible yet, which drastically undermined Mr. Monti's popularity.

The real winner was Beppe Grillo’s anti-establishment Five Star Movement (5SM) which won over 25% of the votes in the lower house and almost 24% in the Senate. The movement explicitly campaigned against the political class, which is tainted by numerous scandals. Against this backdrop, Italian voters were fed up with politics and politicians, particularly at a time when the government was introducing painful fiscal consolidation measures.

What next?
On March 15 the newly elected Parliament will go to work. In the days that follow, Mr. Napolitano, the President of the Republic, will probably ask Mr. Bersani to try and form a government. Since a coalition with Mr Monti will not suffice, he will have to try to reach an agreement with the 5SM. It is highly unlikely, however, that the 5SM will enter directly into the government. It could, however, provide some external support as it is doing in Sicily. This region is administered by the centre-left, and the 5SM provides support for each single legislative proposal. Yet just how stable and sustainable this agreement is would be is very hard to predict. The President of each Region is elected directly by popular vote and forms an individual government. The president could then try to obtain larger majorities on each law presented by the government in the regional parliament. On a national level, things are more complicated as the national government must receive a vote of confidence in both houses of parliament.

BY Clemente DE LUCIA

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