Italy Government Deal: What’s In It and What’s Next

The facade of the Palazzo Montecitorio, the seat of the Italian parliament in Rome, October 23, 2010
The facade of the Palazzo Montecitorio, the seat of the Italian parliament in Rome, October 23, 2010 (Stefano Maffei)

Italy’s populist Five Star Movement and (formerly Northern) League have finalized a coalition agreement.

Among their policies are:

  • Reducing personal and business taxes to two rates: 15 and 20 percent.
  • A €780 monthly basic income for poor families.
  • Repealing 2011 pension reforms that raised the retirement age and made the system financially sustainable.
  • Withdrawal of EU sanctions on Moscow.
  • Speeding up the deportation of around 500,000 immigrants.

The final version of the text does not call for a pathway for countries to leave the euro, nor does it call on the European Central Bank to cancel €250 billion in Italian debt. These proposals had been in leaked drafts.

However, the planned fiscal measures will almost certainly cause Italy to break the EU’s 3-percent deficit ceiling. Read more

Time to Start Worrying: Populists May Form Government in Italy

Luigi Di Maio, the leader of Italy's Five Star Movement, answers questions from reporters in Rome, April 12
Luigi Di Maio, the leader of Italy’s Five Star Movement, answers questions from reporters in Rome, April 12 (Presidenza della Repubblica)

Italy’s Five Star Movement and (formerly Northern) League may form a government after all.

President Sergio Mattarella has given the two parties until Sunday to hash out a deal.

Time to start worrying. Read more

Nobody Is Happy in Germany, League Calls for Italian Euro Exit

German chancellor Angela Merkel delivers a news conference in Berlin, March 24, 2015
German chancellor Angela Merkel delivers a news conference in Berlin, March 24, 2015 (Bundesregierung)

Nobody in Germany is happy with the deal Angela Merkel struck with the Social Democrats this week.

Politico reports that conservatives are upset she gave the Finance Ministry to the left. The party’s youth wing is openly calling for Merkel’s replacement.

The Financial Times reports that Martin Schulz is testing his Social Democratic Party’s (SPD) unity by joining the new government as foreign minister.

Tilman Pradt argued here the other day that Schulz has wasted away his credibility by reneging on his promise never to serve under Merkel. “Given the fate of its sister parties in Europe,” Pradt wrote, “the SPD should have been aware of the dangers of putting personal ambitions over party politics.” Read more

Italy’s Salvini Commits to Right-Wing Pact, Asks Same of Berlusconi

Matteo Salvini, the leader of Italy's Northern League, gives a speech in the European Parliament in Strasbourg, March 15
Matteo Salvini, the leader of Italy’s Northern League, gives a speech in the European Parliament in Strasbourg, March 15 (European Parliament)

Matteo Salvini, the leader of Italy’s anti-immigrant Northern League, has ruled out reneging on a right-wing pact and asked Silvio Berlusconi, the leader of the mainstream conservatives, to do the same.

Both parties get around 15 percent support in recent surveys. In combination with smaller right-wing parties, they might just reach the 40 percent needed to form a government.

If they fall short, Salvini could theoretically team up with the anti-establishment Five Star Movement, which is polling at 26-28 percent.

Salvini and the Five Stars share views on Europe and political reform, but they come at it from opposite ends of the political spectrum.

Both have ruled out an alliance. Read more

Salvini Would Pick Populists Over Center-Left for Coalition

Matteo Salvini, the leader of Italy's Northern League, gives a speech in the European Parliament in Strasbourg, April 29, 2015
Matteo Salvini, the leader of Italy’s Northern League, gives a speech in the European Parliament in Strasbourg, April 29, 2015 (European Parliament)

Italy’s Northern League would rather go into coalition with the populist Five Star Movement than the mainstream center-left, its leader, Matteo Salvini, has said.

Speaking in Palermo on Monday, the conservative lamented that the Five Stars are “showing their incompetence where they govern.”

But, he added, “if I were to call someone, I wouldn’t call Renzi or Alfano” — referring to Democratic Party leader Matteo Renzi and Foreign Minister Angelino Alfano, the leader of the small center-right Popular Alternative.

Renzi’s Democrats are polling neck and neck with the Five Star Movement. Salvini’s Northern League is vying with former prime minister Silvio Berlusconi’s Forza Italia to become the largest party on the right. Support for the Popular Alternative is in the single digits. Read more

Italian Right Makes Pact for Prime Ministership

Italian prime minister Silvio Berlusconi is welcomed at the headquarters of the Organization for Economic Cooperation and Development in Paris, France, March 27, 2010
Italian prime minister Silvio Berlusconi is welcomed at the headquarters of the Organization for Economic Cooperation and Development in Paris, France, March 27, 2010 (OECD/Benjamin Renout)

Italy’s two largest right-wing parties have agreed that whichever one of them receives the most votes in the upcoming election will provide the prime minister in a future coalition government.

The separatist Northern League is currently outpolling former prime minister Silvio Berlusconi’s once-dominant Forza Italia. Together with the national-conservative Brothers of Italy, they would win around a third of the seats in parliament.

The ruling center-left and the populist Five Star Movement would each win another third. Read more

Italian Voting Reforms Could Have Little Impact on Balance Between Parties

The facade of the Palazzo Montecitorio, the seat of the Italian parliament in Rome, October 23, 2010
The facade of the Palazzo Montecitorio, the seat of the Italian parliament in Rome, October 23, 2010 (Stefano Maffei)

Voting reforms enacted by the Italian parliament this week could do little to make the country more governable, an analysis of Ipsos polling data by Corriere della Sera reveals. The three main political blocs would remain roughly equal in size.

The new law allocates a third of the seats in the lower chamber on a first-past-the-post basis and removes the premium for the largest party.

The expectation was that these changes would hurt the populist Five Star Movement and help the mainstream left and right.

But it turns out the effect could be negligible. Read more