Italian government on the brink (again): Has Renzi's hour come?

‘Staffetta’ is the most used word in the Italian media these days. It literally means ‘relay’, and it refers to the

possibility of Prime Minister Enrico Letta handing over power to a new coalition government led by Matteo Renzi – the Mayor of Florence who was elected as the new leader of Mr Letta’s centre-left Democratic Party in December.

The two are holding talks in Rome as we write this blog post, ahead of a key party meeting scheduled for tomorrow. Speculation is growing in some Italian papers that Mr Renzi already has a list of ministers in mind.

If the takeover does materialise, as looks increasingly likely if you scan the Italian press, a few points are worth keeping in mind:

• The change of government would not change the numbers in the Italian parliament, where no party holds a majority in the Senate, the upper chamber. Renzi may be able to muster wider parliamentary support than Letta, but he would still be stuck with a diverse coalition with smaller centrist and centre-right parties – meaning that the difficulties in pushing ahead any significant political and/or economic reform would not evaporate. 

• The handover of power would happen without an election, something which could backfire in terms of Renzi’s image vis-à-vis the electorate – not least because the Mayor of Florence has been clearly saying that he wasn’t keen on replacing Letta without a vote. 

• Therefore, a better option at this point might be to pass a new electoral law quickly and call snap elections. The electoral law currently being discussed is not perfect, but it would make sure that the winning party/coalition would secure a solid majority in both houses of the Italian parliament. It could be done in time for the beginning of Italy’s rotating EU Presidency on 1 July. Indeed, this would mean two months of political paralysis because of the electoral campaign. But despite all the good intentions, Mr Letta’s government has so far hardly delivered on the big reforms it was supposed to implement. Most importantly, at the end of the process Italy would have a government which has actually come out of the polls – rather than negotiations among party leaders.

How many wise men does it take to fix Italian politics?

Markets remain deceptively calm as uncertainty rumbles on in Italy. Italian President Giorgio Napolitano has created two commissions, now known as the ‘wise-men’, which will seek to find some common ground between the various political parties in Italy and therefore, potentially, provide a basis for a coalition government. Although, they only have 8 to 10 days to do so.

The first committee with look at economic, social and European affairs, while the second will focus on institutional (in particular electoral) reform. Napolitano has been at pains to stress that the committees will not determine an agenda for a new government or set any policies; they will simply look to facilitate fresh dialogue and find areas which the parties can work together on.

So where does each party stand now? What are the prospects of finding some ground to build a coalition upon?

Pier Luigi Bersani and his centre-left group:

• Bersani has continuously ruled out entering a grand coalition with Berlusconi’s centre-right group and yesterday reiterated this position, adding that such a government would be paralysed.
• That said, Bersani has warned that new elections would be “disastrous”. Having failed to form a viable government after being given the mandate by the President it is unclear exactly what Bersani wants, particularly with his options dwindling quickly.
• An SWG poll suggests Bersani’s party’s trust in him has fallen to 30% while behind the scenes trust in Florence Mayor Matteo Renzi has reached 55% (+6%), while 66% of Italians say they would like him to guide the centre left instead.

Silvio Berlusconi and his centre-right group:

• By some polls this group is now ahead. In any case they remain a formidable force and are playing their hand by insisting on a grand coalition or fresh elections.
• Yesterday, Berlusconi’s party accused the centre left of pandering to “factional interests” rather than needs of the country.

Beppe Grillo and his Five Star Movement:

• Has ruled out taking part in a coalition government. Has also ruled out providing a formal backing to a technocratic government. May consider providing support to a government on certain issues but remains unclear exactly what conditions would be needed for this.
• Has been critical of the ‘wise-men’ calling them "domestic carers for democracy".

So, the groups remain split along some fairly fundamental lines. Some elements of consensus may be found but it remains unlikely that these will be enough to form a workable long term coalition. A more likely outcome remains a grand coalition being put in place to push through some electoral reform ahead of new elections. A similar scenario with another technocratic government is also possible.

At the same time the new Presidential elections loom large. Voting begins on the 18 April with Napolitano’s term officially expiring on 15 May. This is likely to lead to further delays in forming a government. Napolitano looks set to pass the problem onto his successor, with many criticising the formation of the working groups as a way to eat up time. He can also not call new elections, meaning that the new President would be responsible for doing so – realistically then they cannot take place until June.

Another month or two of uncertainty seems likely in Italy, and any certainty may only come with new elections being announced (itself a source of further uncertainty). Markets have been calm so far, but with the acute problems in Cyprus dying down the spotlight could once again turn on Italy.

Is Beppe Grillo forcing Italy to new elections?

One-by-one, Beppe Grillo and the Five-Star Movement are shutting all the doors to possible government arrangements. Vito Crimi, designated as the Movement's faction leader in the Italian Senate, told reporters yesterday:

If we were proposed a technocratic government, we would consider it. But we confirm our 'No' to a government of the [political] parties.

Less than 24 hours later, though, Crimi posted the following on his Facebook page (yes, that's how the Five-Star Movement communicates):

I never spoke of support to a technocratic government. The only solution we propose is a Five-Star Movement-led government which implements the first 20 points of our programme immediately.

Grillo himself wrote on his blog this morning,

The Five-Star Movement won't support a technocratic government, and it never said it would do so. There's no such thing as technocratic governments in nature, but only political governments backed by parliamentary majorities. [Mario] Monti's government was the most political of the post-war period.

These remarks overlapped with those made by Stefano Fassina (see picture), the economic spokesman of Pier Luigi Bersani's Democratic Party, who told Canale 5 this morning,

I exclude a technocratic government based on an agenda which has been rejected by [Italian] voters...We're not willing to form a government with [Silvio Berlusconi’s] PdL party, and if Grillo is not willing to back the [next] government, we will have to face a new round of elections, even if this is not what is needed now.

So the possibility of re-run elections has been explicitly mentioned again, as several options for compromise are being struck down. However, reports in the Italian press suggest that President Giorgio Napolitano could still have an ace up his sleeve: Italy's outgoing Interior Minister Anna Maria Cancellieri.

According to Il Corriere della Sera, Napolitano could ask her to form the new government if Bersani failed to do so. Cancellieri would lead a 'government of purpose' - meaning that she would focus on a limited number of urgent reforms, and would seek the parties' backing in parliament on a case-by-case basis. Grillo would probably not change his mind, but Cancellieri could win support from Bersani's and Berlusconi's parties. The rumours are echoed by Italian magazine L'Espresso, which features a biography of Italy's "Iron Grandma" (Cancellieri is 68 years old) on its website.

This solution could be seen by some as more desirable than new elections in the next couple of months. Whether such a government will be able to continue with the reforms Italy needs to re-gain competitiveness within the eurozone is a completely different story.

And who are you again? Grillo's MPs and Senators meet each other for the first time

163 MPs and Senators-elect from the Five Star Movement met in Rome yesterday and today. As an initial party meeting after a general election it was quite unusual: despite belonging to the same party, most of the elected representatives had never heard of each other before, let alone met. Beppe Grillo himself did not know many of them, and that's why he joined the meeting today - along with the Five-Star Movement's media guru Gianroberto Casaleggio. Remember, the Five Star Movement selected its candidates through an on-line survey, so no face-to-face contact involved.

This shows just how far away the Five-Star Movement is from being a traditional political party - by any standard. And there's some more stuff:

• Large part of today's meeting was live-streamed and available to everyone online; 

• At the meeting, each of the 163 parliamentarians-elect was given the opportunity to introduce him/herself to the others, and explain what his/her background and areas of interest were;

• The MPs and Senators-elect are all considered 'spokesmen' and 'spokeswomen' of the Five-Star Movement;

• The 163 today chose their faction leaders in both houses of the Italian parliament by a simple show of hands. The faction leaders will only hold the post for three months, and are to be replaced after that.

Incidentally, the faction leader in the Italian Senate is Vito Crimi, a 40-year old (the minimum legal age to be elected as a Senator in Italy) judicial assistant from the Northern town of Brescia.  The faction leader in the Chamber of Deputies, the lower house, is Roberta Lombardi. She is 39, holds a degree in Law and works for an interior furniture company.

Whatever one thinks of the Five-Star Movement, it was quite impressive to see so many Italian MPs in their thirties (or even twenties) in the same room. Finally some fresh air in Italian politics, some might say. We still don't know what the Five-Star Movement will do next. Grillo made a quick appearance at the very beginning of the meeting today, saying that the Movement will only vote for the laws which fit with its manifesto - but he said that several times before.

It remains to be seen how this enthusiastic but inexperienced lot will react when the new Italian parliament convenes - on 15 March, or a bit earlier - and talks on the formation of the next government enter their decisive stage. The time for post-election celebrations may already be over for the Grillini. The question is: will this innovative approach to party politics hold (think party discipline) when things get serious?

Grillo: Bersani is a "dead man talking...pestering us with indecent proposals"

Right. So much for an instant Bersani-Grillo love affair (note instant). This is hilarious: 

As expected, Pier Luigi Bersani and his centre-left coalition have tried to reach out to Beppe Grillo. But Bersani didn't quite obtain the reaction he was hoping for.

On his blog, Grillo has posted a round-up of comments made during the electoral campaign by Bersani regarding both the comedian himself and the Five-Star Movement , under the headline "Bersani: a dead man talking" (see the picture). Here's a sample:

• "There's little democracy in the Five-Star Movement." 
• Five-Star Movement people are "web fascists. Come out call us zombies."
• "With Grillo, we will end like Greece."
• "Lenin is not even nearly as bad as Grillo."
• "Grillo leads to disaster."
• "Grillo makes promises like Berlusconi."
• "If Grillo wins, the country will be in trouble."
• "Grillo? He can take us out of Europe."
• "Grillo takes people out of democracy."
• "Grillo is a third-rate autocrat."

Grillo says in the blog post:

"Bersani is a political stalker. He's been pestering the Five-Star Movement for days with indecent proposals, instead of resigning as everyone else would do in his situation."

"Over the past twenty years, [Bersani's] Democratic Party was in government for ten years, and over the past year-and-a-half it even took part in the grand coalition government with [Berlusconi's] PdL party, backing any sort of junk proposed by Rigor Montis [Grillo's nickname for Mario Monti]."

"The Five-Star Movement won't give any confidence vote to the Democratic Party or others. It will support in parliament only the laws that mirror its programme - whoever proposes them." 

So Bersani's first charm offensive (which we explained in more detail here) hasn't been very successful, and the centre-left leader is now in a quite uncomfortable situation. Bersani will almost certainly try again, but if cooperation with the Five-Star Movement proves a non-starter, he may face a tough choice (as we pointed out in our reaction to the Italian election results):

a) Go cap-in-hand to Berlusconi and say, "Scusa Silvio, we just changed our mind. Are you still up for a grand coalition?"

b) Throw in the towel and admit that there is no alternative but to call new elections.

One last thing: it's interesting to note that several people commenting underneath the post urge Grillo to be a bit more cautious, given the "historic opportunity" the Five-Star Movement has to change Italy. Will Beppe listen?  

Italy election: Did a Bersani-Grillo alliance just become a real possibility?

Italy's centre-left leader Pier Luigi Bersani has just held his first post-election press conference. He's clearly not as good at soundbites as Beppe Grillo (or Berlusconi), but this is the gist of what he said:

The centre-left coalition is willing to "take its responsibilities" given that it got most seats in both houses of the Italian parliament;

He said of Beppe Grillo and the Five-Star Movement,

"They used to tell us to 'go home'. Now they're in [parliament] too. Italy is also their country. Let's see what they want to do for their country."

Crucially, Bersani said that, if asked to form the new government, he will put forward a "programme" - basically a to-do list for the next government, including changes to the electoral law, cuts to the cost of bureaucracy and politics in general and new policies for job creation to be discussed at the European level (whatever that means).

His line was that it's more important to "discuss what we want to do for this country" rather than wasting time on "diplomatic" exercises in an attempt to form a 'traditional' coalition.

And that sounds very similar to Grillo said earlier today, i.e. taking a policy-by-policy approach rather than going for a fixed coalition (as opposed to Berlusconi, who seems quite keen on a proper 'grand coalition'). So, could there be some sort of loose Bersani-Grillo alliance emerging?

Still early days...