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Stalemate in Italy

A picture of instability with potentially significant repercussions for the Eurozone

The stalemate

The political deadlock in what has been one of the most awaited, crucial and symbolic elections in Italian history since the end of the Second World War has come as a surprise to many. It paints a picture of instability with potentially significant repercussions for the Eurozone. No single coalition or party has the majority of seats in both chambers and, as a result, an alliance of heterogeneous forces is necessary to form a government.

At this stage, the inevitable outcome is a caretaker government, supported by the centre-left coalition headed by Bersani’s Democratic Party. Due to a particularly byzantine electoral system, Bersani  won the majority in the Chamber of Deputies but not in the Senate, where he will need the support of either Berlusconi’s Freedom Party or Beppe Grillo’s Five Star Movement (or of both, in the case of a grand coalition). The caretaker government would be tasked with passing a limited number of reforms (a new electoral law, a reduction in the number of MPs, a law preventing conflicts of interest, and new rules to cut public funding to political parties and spendthrift local and regional governments). New elections would follow, where a new electoral system would hopefully give the winning party or coalition the numbers to form a viable government.

What to do with Grillo?

This road is, however, fraught with difficulty. A caretaker government backed by the same grand coalition that supported the technocratic Monti would relegate Grillo to the opposition. To many, this strategy would be tantamount to political suicide for the centre-left, whose defeat came among accusations of having colluded with Berlusconi for the past two decades in draining the public purse, instead of representing a real alternative. And if the objective of a grand coalition without Grillo is to stop the populist wave, persisting with the same old faces that brought the country to the brink of economic catastrophe could further inflame public frustration and reinforce Grillo’s movement. Last but not least, if one should judge the chances of an anti-Grillo coalition by the track record of the forces backing it, the ineptitude and self-interest shown in their time in power is a concerning, but reliable, indicator of future performance.

The first test will be the elections of the speakers of parliament in mid-March, which will require a parliamentary majority

The alternative, a caretaker centre-left government supported by Grillo, poses a number of questions. Would the Five Star Movement, whose leader will not even sit in the Parliament (Grillo decided not to run for a seat), have the necessary cohesion to provide continued support in the Parliament? Why wouldn’t he choose to continue to ride the populist wave, hoping to eventually win the majority at the next elections and form a government autonomously? The first test will be the elections of the speakers of parliament in mid-March, which will require a parliamentary majority. By then, a clearer picture will emerge. In the meantime, all options are on the table.

Europe, fantasies, and a special kind of populism

These elections also suggest a few considerations and lessons for policymakers:

•       Anti-austerity, anti-Europe:

To those who have the European project at heart the Italian elections are another alarm bell

The vote has expressed a strong anti-austerity and, to a lesser but still significant extent, anti-European drive. Over 45 per cent of voters have chosen to support Berlusconi, Grillo and their ambiguous stance vis-à-vis Europe and the Euro. A positive message about the benefits of the European Union is clearly failing to reach vast strata of the population and the
 view that Europe today equals austerity imposed from Brussels is strong and spreading rapidly. To those who have the European project at heart the Italian elections are another alarm bell. New strategies are needed to contain the mounting populist waves. Austerity alone will only reinforce it.

•       Fantasies matter:

The flop of the centre-left Democratic Party and Monti’s centrist coalition, and Berlusconi’s dramatic comeback, reminded us once again that strong messages,
 emotions, narratives and fantasies still matter in politics. Berlusconi focused his campaign predominantly on an anti-austerity fiscal agenda. He promised tax cuts and refunds. His loud, coarse, irreverent style resonates well with many Italians who, like him, are allergic to authority and rules (in a country, let’s not forget, where authority is often corrupt and rules often arbitrary). To his ability to manipulate reality and stimulate fantasies (the relentless anti-German rhetoric, the conspiratorial take on the sources of the country’s woes, the irrational optimism and the unfounded hope that
 comes with it), his opponents responded with a consistently dry, rational, depressing and stylistically conservative campaign. Their negative, hopeless programme centred on more austerity, more tax, more sacrifices and more public demonisation and denigration of the adversary. And it should not have come as a surprise if the relentless Bersluconi-bashing backfired once again. Transgression became ever so tempting. After all, if you keep on telling me that I am a second class citizen because I voted for Berlusconi last time around, chances are that I will vote for him again…

•     Populism, AKA accountability and transparency:

Democracy as we know it is in Italy severely underdeveloped and the success of Grillo should be seen in that context

Some aspects of Grillo’s movements clearly bear a resemblance to other recent forms of populism. But there are a number of elements that make him quite unique in a European context, just as Italy is unique among developed countries in terms of its almost unparalleled levels of dysfunctionality. If Grillo’s style (the ridicule of his adversaries, the simplistic approach to complex problems) is populist, his agenda centres on transparency and democratic accountability reforms, commonplace in other OECD countries but rather revolutionary by Italian standards. Grillo’s political platform is not built to govern. It lacks proper economic and fiscal policy frameworks and is dangerously ambiguous with regard to key foreign policy and immigration themes. Yet to those familiar with how Italy works and the pervasive network of nepotistic, criminal and corrupt interests and practices, the grievances colourfully voiced by Grillo appear very legitimate. Democracy as we know it is in Italy severely underdeveloped and the success of Grillo should be seen in that context. Dismissing basic calls for democratic accountability as clownish populist rants is a mistake. And this is probably the most revealing element of the uniqueness of Grillo’s version of populism: it took a loud, flamboyant comedian turned politician, staunchly opposed by the entire political establishment, to impose a truly revolutionary agenda: that of turning Italy into a normal country.

The author wishes to thank Michele Affinito, Emidio Piccione, Piero Tortola and the Quattrogatti team for their input.

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