Italy: First European Country In The Hand Of Populists?

The general assumption was that the political and parliamentary landscape of Italy would become more complex after the 2018 elections. However, quite unexpected was the major political earthquake the vote has triggered.

Clear winners are the Five Star Movement and the League. Equally, clear losers are: the Democratic Party, together with its left-wing splinter alliance the Free and Equals, and Silvio Berlusconi’s Forza Italia. Five Star with more than 32 percent of the votes is now the largest Italian party. In post-war history only the Christian Democracy, the Italian Communist Party, and later on Forza Italia and the Democratic Party have achieved comparable results.

On the right, the League – successfully transformed by its leader Matteo Salvini into a national party by dropping the attribute “Northern” from the name and making significant headways south of the Apennines – has clearly overtaken Forza Italia, since 1994 the dominant party in centre-right coalitions. The centre-right alliance as a whole scored well in the election, gaining seven percentage points compared to 2013, but Berlusconi, who for years dominated the right pole of the bipolar so-called second Republic, suffered a significant setback.

The two winning parties have been highly vocal in their criticism of current national and European policies. Together they make up 50 percent of the vote – for the first time a majority of the electorate of a big European country has decided to give its vote to an outright populist party.

Distance to former governments and harsh EU criticism pays off

A mix of contextual and of more political factors lies behind these results. According to the Bertelsmann Stiftung’s 2017 Sustainable Governance Indicators (SGI) on Italy the economic recovery started to take off under the Democratic Party-based governments of Matteo Renzi and Paolo Gentiloni, but people’s perceptions didn’t change much and are still dominated by the effects of the deep recession of the past years – fear of unemployment, experiences of business failures, and the tightening of living conditions. Naturally, the main governing parties suffer under such conditions, whereas opposition parties that are perceived as being far distant from the government enjoy voters’ goodwill. Thus, first and foremost the Five Star Movement and the League grew rather than Forza Italia which had headed the government three times between 1994 and 2008.

A second reason for the success of these two parties is the growing resentment in large strata of the population against the policies of the EU. Many people feel damaged by economic austerity on the one hand and resent the scant solidarity shown to Italy’s problems with immigration on the other. The Five Star Movement and the League have both shown very critical attitudes towards the EU – to the point of even suggesting a referendum on the Euro.

There are also more strictly political reasons. Both winning parties had undisputed and visible leaders – Luigi Di Maio for the Five Star Movement and Salvini for the League – and their electoral platforms focused on a few very salient and popular issues: Five Star on ‘moralization’ of political life and a “citizen’s wage”, the League on a flat tax and strong controls on immigration plus setting a challenge to the EU.

The Democratic Party on the other hand wasn’t able to find a suitable successor for Renzi, who was substantially weakened by his 2016 constitutional referendum defeat. In spite of his popularity, the incumbent Prime Minister Gentiloni was not allowed to lead the electoral campaign and capitalize on the successes of his cabinet.

On the right Forza Italia backed Berlusconi’s return to the scene. He was handicapped by his inability to fully participate in the elections because of his ban from holding public office, but even more by his negative record in the 2011 financial crisis. Berlusconi’s presence prevented the emergence of a younger leader, and the party platform was an unfocused mix of unrealistic promises. It was only more moderate than that of the League but unable to grab voters.

What next? A strong anti-European cabinet or a more moderate solution?

What government will lead Italy in a phase when, according to Bertelsmann Stiftung’s 2017 SGI report on Italy, economic recovery must be consolidated and crucial national problems such as containing public debt, reducing unemployment, enhancing productivity and reforming public bureaucracy need to be tackled? As domestic politics is obviously not the only sphere that deserves attention, another crucial question is: How will the next Italian government play the European game at a time when EU reform is on the agenda?

Given the prevailing proportional nature of the electoral system and the tripolar alignment of political forces, the election has not produced a clear parliamentary majority. Which coalition will emerge to form the new government remains uncertain at this stage. The uncertainty is even enhanced by a leadership crisis, which has opened up in the Democratic Party with Renzi’s immediate resignation, but also by emerging doubts about Berlusconi’s claim to leadership in Forza Italia and potential tensions in the centre-right alliance.

Is it likely that the two winners will join forces in an anti-European coalition? This scenario, feared by some observers, would put Italy on a collision course with the French and German European leadership but does not seem, at this moment, the most probable for at least two reasons. First, because the co-existence of two victorious (and proud) leaders in the same government would be difficult, second because the current crisis of the Democratic Party and of Forza Italia gives hopes to Di Maio and Salvini to further expand their own parties at the losers’ expense. This would become more difficult, if the Democratic Party and Forza Italia went into opposition.

If an alliance of the twin winners is rejected, both leaders have to court the centre of the parliament in order to build a majority. They have already given some signals in this direction. This means they will have to moderate some of their most radical positions. In particular, both will have to bargain with political forces that are more pro-European. We may expect therefore a government that would raise questions in Brussels but not refuse cooperation. It would be wise for EU authorities and other European leaders to encourage this process by paying more attention to the problems that Italy has been facing recently, not least because some were exacerbated by sub-par EU policies.