Italy’s Left Rules Out Centrist Coalition After Election

Italy’s left-wing parties do not want to prop up another government led by Mario Monti.

Italy’s left-wing leader, Pier Luigi Bersani, has dismissed the possibility of breaking his alliance with smaller Green and socialist parties in favor of a centrist coalition that includes the supporters of incumbent prime minister Mario Monti.

Bersani, whose Democratic Party is expected to win a plurality of the seats in February’s election, said, “This possibility does not exist,” when asked about sacrificing Sinistra Ecologia Libertà, formerly a coalition of far-left parties, in favor of a coalition with Monti’s supporters.

Unlike Bersani’s own party, Sinistra Ecologia Libertà has not supported Monti’s economic and fiscal reforms. Partly leader Nichi Vendola characterizes the possibility of joining a government that includes Monti as “fantasy politics.”

Monti’s preferences

The former European commissioner who took over as prime minister from Silvio Berlusconi in November 2011 — when Italy appeared to teeter on the brink of sovereign default — told the World Economic Forum in Davos, Switzerland earlier this week that “the most difficult reforms that will have to be undertaken will require broad coalitions.”

He added in a radio interview that he had “no intention of making any agreement with parties that aren’t strongly reformist.” He pointed out that Berlusconi’s conservatives were resisting anti-graft legislation, implying that he prefers a deal with the left.

Short of a majority

The parties that support Monti get just over 11 percent of the votes in recent polls whereas the Democrats and Sinistra Ecologia Libertà win 32 percent combined. The two may win a majority in the lower house of parliament but probably not in the Senate, where they would need centrist support to pass legislation.

Bersani could have little choice but to strike a deal with the centrists. Raising this prospect now may convince leftists to switch to the far left, however, denying the Democrats their plurality.

Berlusconi’s Il Popolo della Libertà and the separatist Northern League get around 17 and 6 percent in surveys, respectively.

Criticism from the right

Monti’s program, which included tax increases and labor-market and pension reforms, were backed by both the main left- and right-wing parties.

Berlusconi’s conservatives pulled their support from the technocrat’s administration in December, however, citing a collapse in home sales, economic contraction, the rising tax burden and tepid labor reforms.

Both parties now criticize Monti’s austerity program.

Renato Brunetta, the right’s economics spokesman, told Reuters last month that Monti’s policies had failed.

“Putting our heads down and carrying on like this with a blood, sweat and tears economic policy designed by Angela Merkel,” the German chancellor, “doesn’t help anyone,” he said.

Berlusconi has repeatedly touted his willingness to stand up to German demands while he was prime minister.

Criticism from the left

Stefano Fassina, the economics spokesman for the left, told the Financial Times earlier this month that he sees no need for further labor market reforms.

“It is not difficult for businesses to fire people in Italy,” he said.

The Democrats previously blocked a Monti proposal to lift the obligation on the part of businesses to rehire workers who are deemed to have been wrongfully terminated.

Fassina added that “the structural reform agenda should move on. We want to open up the insurance market, pharmacies, legal services.”

Professional restrictions

Monti walked back pharmacy liberalizations when trade unions balked at his proposal to allow more drugstores. Aspiring pharmacists still have to prove a “tradition” to open one. As a consequence, it’s virtually impossible except for the children of active pharmacists to enter the profession.

Efforts to lift professional restrictions on attorneys have been similarly halfhearted. Minimum tariffs imposed by Berlusconi’s government were abolished, but in order to compensate lawyers a maximum was set on the number that can be employed in the industry, making it even harder for law graduates to start a firm.

Italy’s judicial system is among the most bloated in the world. It employs some 211,000 lawyers compared to 155,000 in Germany, which has twenty million more citizens. Trials take up to 1,000 days on average and can be susceptible to political pressure, forcing companies to settle out of court.