September 22, 2020

Europe

ITALY: More of the same (and it’s not that good)

BY Wolfango Piccoli

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Report Contents

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( 4 mins)
  • The outcome of the regional elections was not disruptive for the ruling coalition.
  • Yet, the government remains inherently ill-suited to address the country’s economic challenges, even with the help of EU money.

The Lega-led center-right opposition failed to make the breakthroughs it had hoped for in regional elections in a boost to the fragile coalition government. Looking ahead, the main risk remains the government itself and not the opposition. This is because the ruling coalition and the cabinet are not in the position to deal with Italy’s economic challenges and address deep-seated structural deficiencies. Italy is the greatest beneficiary of the EU recovery fund, however, for this money to be invested in value creating initiatives, a radical overhaul of governance mechanisms and administrative reforms will be needed to allocate competencies efficiently between different authorities in addition to adopting suitable selection criteria for the investments. As the prospect of these changes materializing is very low, the risk is that much of the EU aid will be wasted.

In a national referendum held alongside the local elections, Italians voted in favor of cutting the number of lawmakers in the upper and lower houses of parliament to 600 from 945. Some 70% of voters backed the measure allowing the Five Star Movement (M5S) to claim victory despite its very poor scoring in the regional elections. The Democratic Party (PD) fought off a challenge from the center-right alliance in three out of the four regions it was defending, including its traditional stronghold of Tuscany. It also held onto Puglia and Campania but lost Marche. As the PD managed to keep the expectations low, the outcome of the vote was sold as a success by the PD and its leader, Nicola Zingaretti.

A 3-3 draw for the parties while some governors scored big time

Although the center-right bloc held onto Veneto and Liguria, Lega leader Matteo Salvini did not take the day’ s biggest prize: the important region of Tuscany. Just like in Emilia Romagna earlier this year, the Lega failed to conquer this center-left stronghold, undermining Salvini’s efforts to regain the political limelight. The center-right bloc prevailed in Marche, the only region that changed color in the elections, with the leftist bastion taken from the PD by a candidate from Georgia Meloni’s right-wing Fratelli d’Italia (FdI). In Puglia, however, Meloni’s candidate was defeated by the incumbent center-left governor.

The biggest losers were Silvio Berlusconi’s Forza Italia and Matteo Renzi’s Italia Viva as both parties got tiny percentages across the board. Berlusconi recovered from Covid-19 but his party remains moribund. As for Renzi, the 4.5% his party gathered in Tuscany means that the former prime minister’s party played no decisive role even in his own home region.

The biggest winners were the incumbent regional governors, especially those who managed to establish a strong and independent profile during the first wave of the pandemic. Luca Zaia, the Lega governor of Veneto who has become a household name in the country thanks to his handling of the Covid-19 crisis, secured a thumping victory with 76.8% of the vote. In Campania, the incumbent center-left governor Vincenzo De Luca, famous for his sheriff-like management of the response to the virus outbreak, was re-elected with 70% of the vote.

Leaving aside the 3-3 draw, this electoral round mainly delivered success to some high-profile local administrators and modest results to most parties. The center-left somewhat hold the ground, the center-right managed to snatch only one region and the M5S performed once again very poorly in local elections, including in southern regions where it did well in the last general elections.

The overall outcome is a positive one for Prime Minister Giuseppe Conte as not much has changed. Within the inherently unstable ruling coalition, the PD will likely seek to gain a bigger say as it did better than the M5S but it still has no credible cards to use. The thorny issue of applying for financial aid (up to EUR 36bn) from the ESM is likely to return on the agenda, alongside with possible amendments to immigration laws. Another potentially divisive element on the policy front is the electoral reform, which has been slowly moving in the direction of a proportional model corrected with a parliamentary entry threshold. As Italia Viva’s votes are crucial in the Senate to control a majority, Renzi will use this lever in the talks with the PD and M5S over setting this delicate threshold.

Given the ruling coalition’s thin majority in the Senate, it is also worth noting that center-right candidates prevailed in two by-elections that took place over the weekend.

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