Voters Punish Italy’s Renzi as Reforms Stall

The Italian prime minister’s supporters suffer in local elections as reforms have yet to pay off.

Italian prime minister Matteo Renzi delivers a news conference in Modena, September 17, 2015
Italian prime minister Matteo Renzi delivers a news conference in Modena, September 17, 2015 (Palazzo Chigi)

To his credit, Italian prime minister Matteo Renzi did not try to spin his party’s lackluster performance in elections this weekend.

“We are not satisfied and we’re not going to put on a fake smile,” said the former mayor of Florence after it became clear his candidate had lost the first round of the mayoral election in Rome, the capital, to the anti-establishment Five Star Movement.

Democrats did not do well in other major cities either. The center-right could take control of both Milan and Naples.


The letdown comes after a strong showing in the 2014 European Parliament elections, when the prime minister’s party won a full 40 percent of the votes.

Now polls suggest it would take around 30 percent.

A weak economy and the European migrant crisis have depressed support for the left. A series of corruption scandals, while themselves not unusual in Italy, have compounded the sense of fatigue.


The fear is that this dissatisfaction will convince Italians to reject constitutional reforms in a referendum in October.

Renzi has staked his political career on the outcome, saying he will resign if the plebiscite goes against him.

Italians will be asked to approve a transformation of the Senate: from a body with equal lawmaking power to the lower house into a relatively weak assembly of regional deputies. The goal is to make Italy more governable by reducing the need for broad and unwieldy coalitions.

Renzi’s center-left government currently has a comfortable majority in the Chamber of Deputies. But the right won nearly as many seats in the Senate in the last election, raising the specter of divided government.

Stalled reforms

Having expanded much of his political capital on political reforms — including the introduction of an election threshold — Renzi’s economic program has stalled.

He hailed a drop in unemployment, from 11.6 to 11.4 percent, earlier this year as proof that hard-fought changes to the labor code are paying off.

But, as the Atlantic Sentinel reported at the time, Renzi’s reforms, while making it easier for firms to hire and fire workers, had two major caveats: the changes did not apply to anyone already in work and tax breaks to incentivize hiring under the new contract are scaled back later this year.

The reforms also did nothing to lift licensing requirements and other types of restrictions that make it difficult for young Italians to start a career as a lawyer, notary, pharmacist or taxi driver.

Nor has Renzi managed to improve the enforcement of contracts or speed up Italy’s court procedures, two notorious impediments to business growth.

The central bank said on Monday it expects the economy to expand just 1.1 percent this year, down from a 1.5-percent forecast it made in January.

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