Deadlock Looms After Italians Return Divided Parliament

The facade of the Palazzo Montecitorio, the seat of the Italian parliament, in Rome
The facade of the Palazzo Montecitorio, the seat of the Italian parliament, in Rome (Shutterstock)

Former prime minister Silvio Berlusconi’s right-wing coalition has emerged from Italy’s two-day election with a plurality of the seats in the Senate while the left-wing Democratic Party and its allies took control of the lower chamber.

Italy, which just over a year ago seemed to teeter on the brink of sovereign default, now enters a period of political instability, if not paralysis, as neither the right nor the left looks able to form a government.

A telephone survey published immediately after polls closed on Monday suggested that the left would win majorities in both houses of parliament, but projections in European and Italian media published later in the day had it tied with Berlusconi’s coalition in the upper chamber. Read more “Deadlock Looms After Italians Return Divided Parliament”

Italy’s Left Struggles to Take Control of Legislature

Italian Democratic Party secretary Pier Luigi Bersani gives a speech in Turin, Piedmont, August 28, 2010
Italian Democratic Party secretary Pier Luigi Bersani gives a speech in Turin, Piedmont, August 28, 2010 (Francesca Minonne)

Italy’s center-left Democrats are expected to win the most votes in parliamentary elections this weekend, but they could struggle to win a majority in the upper chamber, where centrists backing incumbent prime minster Mario Monti may end up holding the balance. Read more “Italy’s Left Struggles to Take Control of Legislature”

South Tyrolean Separatists Reject Alliance with Center-Left

Bolzano Italy
Bolzano, the capital of South Tyrol, Italy, July 30, 2007 (gigi62)

When Italians elect a new parliament later this month, the German-speaking minority in the far north of the country will be doing so with independence on their minds.

As in other rich parts of Europe, the inhabitants of South Tyrol feel they are being asked to contribute more than their fair share to the country’s recovery. Read more “South Tyrolean Separatists Reject Alliance with Center-Left”

British, Germans Fear Italians to Return Berlusconi

Italian prime minister Silvio Berlusconi arrives for a European Council meeting in Brussels, June 24, 2011
Italian prime minister Silvio Berlusconi arrives for a European Council meeting in Brussels, June 24, 2011 (European Council)

The German finance minister Wolfgang Schäuble was quoted on Friday as saying that Silvio Berlusconi’s return to the premiership would “weaken Italy and weaken all of Europe.” He added: “My advice to Italians is not to repeat the error already made and not to continue voting him.”

Even if a spokesman for Schäuble denied that he had said the exact words in an interview with the Italian L’Espresso magazine and his Christian Democrat party belongs to the same political family as Berlusconi’s right-wing Il Popolo della Libertà, the Germans much prefer a centrist or left-wing government in Rome that continues the reforms enacted by Prime Minister Mario Monti last year. “Bersani,” said Schäuble, referring to Italy’s leftist prime ministerial candidate, “told me he wants to continue on the path started by Monti and this is what is important for me.”

The Economist would also rather either Pier Luigi Bersani or Monti, if not both, rule Italy. Although the former is in alliance with the far left, which opposed many of Monti’s economic and fiscal reforms, “Bersani also has a reasonable record as a reformer in past governments,” according to the liberal British newspaper.

Deeper reforms are needed as Monti, who took over from Berlusconi in November 2011 when Italy seemed to teeter on the brink of sovereign bankruptcy, failed to thoroughly liberalize his country’s economy. Through tax increases and a raise in the pension age, the budget was put on a more sustainable trajectory but Monti’s program of economic modernization has been tepid.

Labor market reforms, which should have made it easier for firms to hire and fire workers, were initially delayed, then watered down under pressure from the nation’s powerful trade unions as well as Bersani’s Democratic Party whose support Monti needed for his majority in parliament. The far-left Sinistra Ecologia Libertà, Bersani’s main ally, voted down the reforms altogether and has dismissed the possibility of ever forming a coalition that includes the incumbent premier as “fantasy politics.”

Monti similarly backpedaled on proposed drugstore and taxi market reforms. Thousands more pharmacies were supposed to be added but union opposition forced the government into retreat. Efforts to lift professional restrictions on attorneys were halfhearted. Minimum tariffs imposed under Berlusconi’s administration 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 business.

Retailers have been the only real beneficiaries of the government’s reforms. Legally mandated shop hours and sales periods have been abolished, if to the chagrin of small businesses who fear that they will not be able to compete with chain stores.

Italy’s public debt remains among the highest in the world at nearly 130 percent of gross domestic product. Labor costs are also still high. Whereas in other Mediterranean countries, they have fallen since the start of the sovereign debt crisis, in Italy, wages have continued to climb.

The Economist warns, “If the eurozone’s third biggest economy and its largest public debtor cannot reignite growth and generate new jobs, Italians will eventually lose hope or their northern neighbors will lose patience.” Dutch, Finnish and German voters are increasingly frustrated about the seemingly lackluster pace of economic modernization in the south. If Italy fails to make progress in years to come, it is not difficult to imagine the electorates in the more competitive north of the single-currency union simply giving up on the whole project.

Yet Berlusconi, who is in alliance with the separatist Lega Nord, has flourished in preelection polls as he intensified his criticisms of German austerity. In a television interview last month, he touted his willingness to stand up to German demands as prime minister. “I was one of the two, three most influential leaders in the European Council,” he said. “I continuously opposed German proposals and demands.”

He also urged the European Central Bank, chaired by the Italian Mario Draghi, to print more money so countries in the south of Europe can finance their deficits in the absence of private-sector funding. The Germans would be extremely apprehensive of such an activist monetary policy for fear of driving up inflation.

If the ultimate consequence of a disagreement over fiscal or monetary policy is Germany or Italy leaving the eurozone, Berlusconi said last summer that it would “not be the end of the world.”

In the last surveys released before a ban on election opinion polls came into effect last week, Berlusconi’s right-wing alliance was at 29.7 percent while Bersani’s left-wing parties were at 37.2. The centrist parties that support Monti’s reelection got nearly 13 percent of the votes in the ISPO poll. If neither the right nor the left secures an outright majority, Monti’s backers could be kingmakers, especially in the Senate where elections are not entirely proportional.

Berlusconi Makes Italians Offer They Can’t Refuse

Italian prime minister Silvio Berlusconi arrives for a European Council meeting in Brussels, October 26, 2011
Italian prime minister Silvio Berlusconi arrives for a European Council meeting in Brussels, October 26, 2011 (European Council)

Italy’s right-wing leader Silvio Berlusconi on Sunday promised sweeping tax reductions if his party is elected to government later this month. Notably, he advocated the elimination of a hated property tax implemented by incumbent prime minister Mario Monti, something he said “will restore public trust in the state.”

In a passionate address to supporters in the northern city of Milan, the septuagenarian former premier said that he would scrap the tax and refund payments already made. He also promised that a conservative government would eliminate a regional business tax and cancel plans to raise the value-added tax and impose a wealth tax on rich Italians. The decline in revenue should be offset by deeper cuts in government spending, including the public financing of political parties.

With three weeks to go before parliamentary elections are due to take place in Italy, Berlusconi has managed to boost support for the right-wing Il Popolo della Libertà in the polls. His coalition with the separatist Lega Nord trails the left-wing parties led by Pier Luigi Bersani by just 5 percentage points in one recent survey. The left enjoyed a 15 point lead as recently as early January.

“We are one step away from victory,” Berlusconi was quoted as saying on the website of his party. “The left is afraid. They are losing sight of victory which they thought was in the bag.”

Berlusconi rallies against the austerity measures that have been imposed by former European commissioner Mario Monti who took over as prime minister in November 2011 when Italy appeared to teeter on the brink of bankruptcy. Monti led a technocratic administration that raised taxes, reduced pension payments and made some efforts to liberalize Italy’s labor market and service industries.

Both Berlusconi’s Il Popolo della Libertà and Bersani’s Democratic Party supported Monti’s government through last year. The former pulled its support in December, citing a collapse in home sales as a result of the new property tax, continued economic stagnation and tepid labor market reforms that were watered down under pressure from the country’s trade unions and the left.

“The situation today is much worse than it was a year ago when I left the government out of a sense of responsibility and a love for my country,” said Berlusconi in early December when his party’s decision to withdraw its support from Monti’s government triggered new elections.

Since, the former premier has touted his willingness to stand up to Germany which many Italians blame for the austerity policies that Monti has enacted. “I was one of the two, three most influential leaders in the European Council,” said Berlusconi in a television interview last month. “I continuously opposed German proposals and demands.”

He also urged the European Central Bank, chaired by the Italian Mario Draghi, to print more money so countries in the south of Europe can finance their deficits in the absence of private-sector funding. The Germans would be extremely apprehensive of such an activist monetary policy for fear of driving up inflation.

If the ultimate consequence of a disagreement over monetary policy is either Germany or Italy leaving the eurozone, Berlusconi said last summer that would “not be the end of the world.”

Opinion polls still give Bersani’s left-wing coalition with the smaller Sinistra Ecologia Libertà the best chance of securing a plurality of the seats in parliament but he would likely need the support of centrist parties that favor Monti’s reelection to secure a majority in the upper chamber. Sinistra Ecologia Libertà did not back Monti’s economic and fiscal reform efforts last year, however, and party leader Nichi Vendola has dismissed the possibility of joining a coalition that includes the incumbent premier as “fantasy politics.”

Monti, for his part, has all but ruled out a coalition with the right as long as it is led by Berlusconi. He told Italian radio last week that he had “no intention of making any agreement with parties that aren’t strongly reformist” but also said that he could “easily imagine a collaboration” with Il Popolo della Libertà if Berlusconi resigned.

If the right does win the election, Berlusconi has said that he will not return as prime minister. Rather Angelino Alfano, who is currently the party’s secretary, is groomed as his successor while Berlusconi could become the economy minister.

Italy’s Left Rules Out Centrist Coalition After Election

Pier Luigi Bersani addresses a Democratic Party congress in Rome, January 17
Pier Luigi Bersani addresses a Democratic Party congress in Rome, January 17 (Ilaria Prili)

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.” Read more “Italy’s Left Rules Out Centrist Coalition After Election”

Italy’s Monti Open to Broad Coalition, Left Surges

Italian prime minister Mario Monti in Paris, France, August 3, 2012
Italian prime minister Mario Monti in Paris, France, August 3, 2012 (Elysée)

Italy’s technocrat prime minister, Mario Monti, has said in a radio interview he is willing to consider a broad coalition with Silvio Berlusconi’s conservatives, provided the former premier isn’t part of it.

Meanwhile, the left-wing Democratic Party continues to rise in the polls. It could win a plurality of the seats in both chambers of parliament. Read more “Italy’s Monti Open to Broad Coalition, Left Surges”

Italy’s Berlusconi, Separatists Seal Electoral Pact

Silvio Berlusconi
Italian prime minister Silvoi Berlusconi speaks at a meeting of European People’s Party leaders in Brussels, March 1, 2012 (EPP)

Italy’s conservative party leader, Silvio Berlusconi, has announced a new deal with the separatist Northern League, his coalition partner in previous right-wing governments.

The septuagenarian former media tycoon, who is leading Il Popolo della Libertà into February’s election, did not give many details in a radio interview but said he would be the “leader of moderates” in a center-right alliance.

He said he wasn’t sure if he would return as premier: “We will decide if we win.” Read more “Italy’s Berlusconi, Separatists Seal Electoral Pact”

Italy’s Left Tops Prime Ministerial Poll, Monti Second

Pier Luigi Bersani speaks at a Democratic Party event in Bologna, Italy, February 24
Pier Luigi Bersani speaks at a Democratic Party event in Bologna, Italy, February 24 (Partito Democratico Emilia Romagna/Vincenzo Menichella)

A CISE survey published in the Italian newspaper Il Sole 24 Ore on Sunday found that the country’s left-wing leader, Pier Luigi Bersani, is in the lead to win the premiership.

Incumbent prime minister Mario Monti, who has announced he will contest February’s election leading a coalition of centrist parties, places second. Former prime minister Silvio Berlusconi is in third place. Read more “Italy’s Left Tops Prime Ministerial Poll, Monti Second”

Berlusconi Threatens Italian Eurozone Exit, Rises in Polls

European Council president Herman Van Rompuy speaks with Prime Minister Silvio Berlusconi of Italy in Brussels, June 23, 2011
European Council president Herman Van Rompuy speaks with Prime Minister Silvio Berlusconi of Italy in Brussels, June 23, 2011 (European Council)

Italy’s right-wing leader Silvio Berlusconi threatened to leave the European single-currency union on Wednesday unless the European Central Bank pursues a more expansionary monetary policy which northern member states, including Germany, are adamantly opposed to. The former premier seems to hope that his newfound Euroskepticism will enable him to return to government in elections early next year.

In an interview with Italian public broadcaster Rai Uno, Berlusconi said, “Either Germany understands that the ECB must act as a real central bank and therefore print money or unfortunately we will be forced to leave the euro and return to our currency.”

Berlusconi, who was forced to resign the premiership in November of last year when Italy teetered on the brink of sovereign default, previously suggested that it would “not be the end of the world” for either Germany or Italy to leave the eurozone. In an interview with Canale 5 last week, he touted his willingness to stand up to Germany which is seen by many Italians as imposing unnecessarily drastic economic and fiscal reforms on their country. “I was one of the two, three most influential leaders in the European Council,” he said. “I continuously opposed German proposals and demands.”

Unlike incumbent prime minister Mario Monti, according to the Italian right. Berlusconi and other conservative party members have accused the former European commissioner, who took over as premier last November, of toeing the German line of fiscal policy. Monti’s cabinet enacted tough budget and pension reforms to mend the country’s shortfall and stabilize its debt, currently at 126 percent of gross domestic product. He also advocated labor market reforms but had to tone them down under pressure from the left as well as the nation’s powerful trade unions.

Monti relied on the support of Berlusconi’s Il Popolo della Libertà and the left-wing Democratic Party in parliament. The former withdrew its support from the government earlier this month, prompting Monti to resign. Elections were expected to be called in February of next year.

The right now wants to postpone the election until the end of February or early March. Even if preeleection polls put it behind the Democratic Party as well as the Euroskeptic Five State Movement led by comic Beppe Grillo, its popularity is on the rebound. Berlusconi’s anti-German rhetoric seems to resonate with a share of the Italian electorate. His party may be calculating that pushing back the elections will give it ample time to persuade enough voters to give it a plurality of the seats in the next parliament.

Democratic Party leader Pier Luigi Bersani still has the best chance of capturing the prime ministership. But it’s possible that Berlusconi’s party, its former coalition partner, the separatist Lega Nord, and the Five Star Movement win a majority between them which would put the three Euroskeptic parties in a position to form a government — even if Grillo is otherwise more left wing and not inclined to prop up another cabinet headed by Berlusconi.