Has Marine Le Pen put Farage's European Parliament group out of business (and out of pocket)?

UPDATE 16:10 - A spokesperson for Lithuania's Order and Justice told EUobserver that the party "hasn't had any discussions" with Marine Le Pen on a possible alliance. This confirms Le Pen remains at least one party short of forming a group in the European Parliament (see previous update). 

UPDATE 14:05 - We are still waiting for an official confirmation that Marine Le Pen has managed to put together her new group in the European Parliament.

In the meantime, though, it seems the two Lithuanian MEPs from Order and Justice have denied reports that they are going to join forces with Front National. This would leave Le Pen's group one party short of the required number. A Lega Nord spokesman quoted by Die Presse admits that "final discussions are still under way", but still expects Le Pen to officially announce the creation of the group later this afternoon.

ORIGINAL BLOG POST  

It looks like there could be a winner in the contest between Nigel Farage's UKIP and Marine Le Pen's Front National to gather as much support among the fringe parties elected to the European Parliament in order to be able to form (or in UKIP's case maintain) a parliamentary group. Although there has not yet been any official confirmation, Giovanna Pancheri - the Europe correspondent of SkyTG24 - broke the news on twitter yesterday evening that the Polish KNP party (led by Janusz Korwin-Mikke) and the Lithuanian Order and Justice party had agreed to join Le Pen's new European Alliance for Freedom Group. 

Along with the FN, Geert Wilders' PVV, Belgium's Vlaams Belang, Austria's Freedom Party and Italy's Lega Nord, the EAF has enough member states to qualify for an official group. In total, the group will have 44 MEPs (24 of which are from the FN). Having a group means additional staff and funding, a high profile platform in the parliament, and possibly the right to some committee posts.

This means that, as Open Europe predicted a couple of weeks ago, UKIP's Europe of Freedom and Democracy (EFD) group looks in serious trouble having lost the Danish People's Party and the Finns party to the ECR and Lega Nord and now also Order and Justice to the EAF.

In theory, the EFD could yet survive if it holds onto its Dutch MEP, as well as getting Beppe Grillo's Five Star Movement on board (which may prove difficult given its activists will have the final say), the Sweden Democrats, and a couple of other small parties and independents. If it manages to get MEPs from six different member states, it could also potentially secure a special dispensation under EP rules, but this would require the consent of the other group leaders (not sure we would fancy Farage's chances!). While being forced to sit without a group would hardly be disastrous for UKIP politically, given that it has its eyes set on Westminster, losing millions of euros, a bunch of staff that can be used for campaigning and a high profile platform from which to attack the EU would hurt. Ukip better get busy searching for more donors. 

However, despite Le Pen's apparent success in emerging as the figurehead of the main anti-EU group in the EP, there remain a number of questions over the EAF's durability. For a start, the PVV have made clear their unhappiness over Jean-Marie Le Pen's recent anti-Semitic outburst (which is splitting the FN), while the addition of the highly volatile Korwin-Mikke could alienate more 'moderate' MEPs within the group.

Would it not be easier if 'Brussels' simply dissolved the people and elected another?

In less than a month's time voters across the EU (that is those who decide to vote) will head to the polls to elect the new European Parliament. Ahead of the elections there has been a lot of speculation about the surge in support for a range of populist anti-EU, anti-austerity, anti-immigrant and anti-establishment parties and what this will mean.

Breaking the parties down into these sub-groups illustrates that the potential 'anti-EU vote' is a complicated phenomenon. In a new briefing published today, we estimate these parties could win as much as 30.9% of the vote in May, up from 24.9% in 2009. This will give them 218 out of 751 seats (29%), up from 164 out of 766 (21.4%) in the current parliament. (You can see our criteria for categorising the parties in the briefing).

These parties, loosely termed by Open Europe as the ‘Malcontents Block’, span the political spectrum and differ substantially from each other, ranging from mainstream governing parties to outright neo-fascists, and will not therefore form a coherent block. The largest increases are among the anti-establishment parties typified by Beppe Grillo's Five Star Movement in Italy and the anti-EU vote is largely driven by the rise of the Front National in France and UKIP in the UK. Having said this, we acknowledge that the European elections are in part used by anti-establishment parties to drive a domestic agenda, sometimes with limited links to "Europe". Still from free movement to the bailouts, European issues are now trickling through to voters' decisions.

Sources: Vote Watch Europe and Open Europe calculations

However, despite the strong performance of these anti-EU parties, the EP will continue to be dominated by parties which favour the status quo or further integration. The vote share of parties identified by Open Europe as being ‘critical reformers’ – parties which believe the EU needs fundamental reform if it is to survive – is set to go from 53 to 39 seats.

The net effect of the anti-EU vote could therefore ironically be to make the EP more integrationist: by crowding out critical reformers, by reinforcing the corporatist tendency of the two main groups who will want to freeze out the anti-EU MEPs, and by binding the EP and Commission closer together.

Source: Vote Watch Europe and Open Europe calculations

Another one to watch out for is voter turnout. If turnout is roughly the same this time around (43%), we estimate that 74.4% of all voters will have voted against the EU, for radical change, or not bothered to vote at all, with only 25.6% of all eligible voters actively turning out to vote in favour of status quo/more integration parties.

This is not to say that all 'non-voters' are anti-EU or anti-status quo - some have tried to put words in our mouth to that effect (somewhat predictably). However, it clearly reinforces the European Parliament's remoteness from voters and the thin democratic mandate that MEPs can rely on to push their agenda in the Parliament. Some may be tempted to see voter apathy as a 'net neutral' - we don't know how these voters would vote after all and they're voting for other things apart from Europe anyway. This is a familiar argument that has been used many times in the past as a pretext for pressing ahead with more integration. However, to conclude that voter apathy in fact means 'endorsement' is naive, intellectually dishonest - and outright dangerous as it'll only create even more fertile ground for an even more hostile response in future.

Source: Vote Watch Europe and Open Europe calculations

Worryingly for the UK and other liberal minded EU governments, the share of MEPs explicitly dedicated to free market policies is also expected to fall from 242 (31.6%) to 206 (27.4%).

Source: Vote Watch Europe and Open Europe calculations

All this means that the EP elections may be bad news for David Cameron. The EP has an effective veto over some of Cameron’s potential flagship reforms (outlined in his recent Sunday Telegraph article), including EU-US free trade talks, services liberalisation and rules on migrants’ access to welfare.

The consequence of giving the European Parliament more and more power under successive EU treaties is that these elections matter. MEPs now have equal status with national governments in the vast majority of EU policy areas from regulating working time to bankers' bonuses. Despite this, turnout has fallen in every European election so far and this time around we could see more anti-EU MEPs elected than ever before.

The usual response from the Brussels bubble to voter apathy is that people don't 'understand' the EU. Perhaps, this time politicians might spend more time trying to understand why the electorate is looking for alternatives to the likes of Schulz, Juncker and Verhofstadt or not bothering to vote at all.

Berlusconi's swan song may not be easy listening for Letta

September has come, and summer is (almost) over - but the heat won't leave Italy for a bit. The Italian Senate's Immunities Committee has begun debating whether to strip Silvio Berlusconi of his seat as a result of his recent tax fraud conviction. As we wrote on this blog several times (see here, here and here), the outcome of the vote that will follow this debate could be decisive for the future of Prime Minister Enrico Letta's shaky coalition government.

A quick recap:

• Under Italy's new anti-corruption law, Berlusconi won't be able to stand for election for the next six years due to his tax fraud conviction. As we said, he also risks losing his seat in the Italian Senate.

• Berlusconi's PdL party wants to delay the vote in the Senate's Immunities Committee, arguing that the opinion of the Italian Constitutional Court and the ECJ should be sought first. The legal reasoning behind the request is that, according to Berlusconi's party, the anti-corruption law can't be applied retroactively - that is, it doesn't cover crimes committed before its entry into force in December 2012. The problem is the other parties (including Mr Letta's Democratic Party, currently in government with Berlusconi's PdL) are not on the same wavelength and want to wrap everything up as quickly as possible.

• A preliminary vote on the request to refer the matter to the Constitutional Court and the ECJ could take place tonight or tomorrow. It remains unclear when the final vote will happen. However, several key members of Berlusconi's party have made clear that, if the Committee refuses to delay the final vote, it will be the end of the coalition with Mr Letta's Democratic Party.

In other words, Italy seems to be heading towards fresh political instability. If the existing coalition collapsed, snap elections would become a concrete possibility - but not the only one. The ball would once again be in the court of Italian President Giorgio Napolitano, who would presumably try and put together an alternative majority (with the help of 'rebel' Senators from Beppe Grillo's Five-Star Movement and Berlusconi's party) before throwing the towel in and dissolving parliament. 

Germany's anti-euro party may still yet make it into the Bundestag

Don’t think the German elections are a done deal – and, in particular, don’t rule out Germany’s anti-euro party, Alternative für Deutschland.

Though Merkel’s CDU/CSU is doing well the polls – as has been noted – her party could still flunk this one. German election surveys are notoriously  unreliable – and in the past, the polling figures for the CDU/CSU in particular, have tended to be higher than the actual election results. The central scenario for the new German government is still definitely a CDU/CSU-FDP coalition. However, a grand coalition of CDU/CSU-SPD is very much on the cards. If the FDP fails to get into the Bundestag, we could even be looking at a SPD-Green coalition – but that’s still unlikely.

The thing to remember is that the share needed to secure a majority in Bundestag isn’t the same as overall support in the polls, as the votes below the 5% threshold  parties need to win seats in the Bundestag will be dropped, while some seats are actually first past the post. So it’s not all that straightforward.

One interesting question, though: will Alternative für Deutschland shock Europe and make it into the Bundestag? A Forsa opinion poll for RTL/Stern today put the party on 4% .

This means we’re very close to a scenario where AfD is in and FDP is out. The assumption so far – including initially from us – was that AfD would struggle to get above 5%. Its window would instead be the European Parliament elections (without 5% threshold and possibly following a series of tough decisions in the Eurozone). However, we’re not confident of that any longer. Before the Italian elections, we predicted that Beppe Grillo’s (at least semi anti-euro) Five Star Movement would do better than many assumed. Deja Vu?

Possibly.

First, there are a huge number of swing voters swirling around Germany – over 30 per cent are undecided according to some polls, with one recent one even claiming 72 per cent. We literally have no idea where all these votes will go, but they could prove favourable for AfD. They could, of course, also go against the party.

Secondly, polls can easily underestimate the strength of  a new, protest party – as in the case of Grillo. Online polls tend to put AfD higher than polls conducted over the phone, suggesting that voters are still embarrassed to actually admit publicly, and to pollsters, that they'll vote AfD. German polls aren’t actually that great at predicting outcomes, for various reasons.

Now, AfD won’t do a Grillo  - who absolutely exploded onto the scene. However, a lot more sensational things have happened in politics than AfD landing a spot in the Bundestag.

We won’t call this one either way.

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.

Beppe Grillo, the Five-Star Movement and the euro enigma: Episode 2,478

We have noted on this blog before that it would be a bit of a stretch to describe Beppe Grillo's Five-Star Movement as an anti-euro party - mainly because it has yet to adopt an official position on the issue. At the moment, not even the referendum on Italy's membership of the single currency appears in the Five-Star Movement manifesto.

According to an ISPO poll published by Il Corriere della Sera on Sunday, if this referendum were to take place in Italy, 73% of Five-Star Movement voters would opt to stay in the euro - and only 17% would vote for a return to the Lira. An overwhelming majority.

However, Professor Mauro Gallegati (see picture) - one of Beppe Grillo's closest economic advisors - gives a slightly different picture in an interview with French business daily Les Echos today. He says, 

The [Five-Star] Movement is still split over the euro. There is a good part of supporters who are in favour of an exit from the single currency. Personally, I’m against [euro exit] because I think the cost to the Italian middle class would be prohibitive. 

So to what extent the Five-Star Movement's electorate can be described as anti-euro remains unclear. But the poll and the interview both leave another key question unanswered. What do the Five-Star Movement's 163 MPs and Senators-elect actually think about the euro? This is quite hard to figure out at the moment, given that they are not allowed to speak to the press. But they may have to take a clearer stance sooner rather than later, not least because official talks on the formation of the next Italian government are due to kick off next week.

Follow us on Twitter @OpenEurope or @LondonerVince for the latest from 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?

Anti-euro party? Grillo's advisor says leaving the single currency would be "an absurd mistake"

Everyone is trying to figure out the enigma that is Beppe Grillo and what his Five-Star Movement actually wants.

On Europe, for example, where this isn't at all clear. As we've noted, Grillo himself has been very critical of the euro in the past, and toyed with the idea of a return to the Lira - although he is now keen to point out that he never explicitly said that Italy should leave the euro. But his party might be a different matter.

Italian Professor Mauro Gallegati, who is considered one of Beppe Grillo's closest economic advisors and one of the people responsible for writing the party's economic policies, said in an interview with today's Corriere della Sera,

[Italy's euro exit] would be dramatic, an absurd mistake which would reduce Italians' income by 30-40%. If anything, what's needed in Europe is a real political union, as in the US, with a central bank which can devalue the currency.

In other words, the Five-Star Movement can't quite be described as an 'anti-euro party' (as we've said before, see here and here). In fact, 'Europe' doesn't even feature in its manifesto. And remember, the Five-Star Movement is a very fluid construction - what Grillo says in public, or writes on his blog, doesn't automatically translates into 'party policy'. What we do know is that the party is definitely anti-austerity, which inevitably brings it into 'Europe territory'.

If you have not yet done so, watch a short video summary of our breakfast discussion yesterday, in which we sought to decode Grillo in particular and the Italian election results in general.

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?  

Bild ups the ante: Will Italy's political clowns destroy the euro?

Yesterday Bild's online edition asked will the Italians destroy or euro? Today the same headline appears in the print edition, complete with a mock up of as Grillo and Berlusconi as clowns.

However, its not just the tabloid press that are using this analogy - Peer Steinbrück, the SPD's chancellor candidate, yesterday told a rally that "I am appalled that two clowns have won", going on to warn that the result would likely increase problems within the eurozone.

The North - South tensions in the eurozone are unlikely to easy anytime soon...

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...

Beppe as king-maker: will he, won't he?

Beppe Grillo is the man of the moment in Italy and Europe. He, and not Mario Monti as thought, commands enough seats in the Italian Senate to hold the balance of power. So the former Comedian, not the former European Commissioner, could be the king-maker.  But does he want to?

There are plenty of rumours coming our of Italy that Pier Luigi Bersani - whose centre-left coalition holds a solid majority in the lower house of the Italian parliament - is trying to court Grillo somehow. But Grillo may well continue to resist any formal coalition arrangements with other parties - after all that was his entire thing in the run-up to the elections.

Yesterday, he insisted on La Cosa, the Five-Star Movement official TV / radio online station, that he is not going to make inciuci, inciucetti, or inciucini -  Italian slang to describe backroom deals - with anyone.  

But only an hour ago he told journalists outside his house in Genoa,

We talk about programmes. We're not against the world. We'll see reform by reform, law by law. If there are proposals that fit with our programme, we'll consider them. 

So this seems to suggest that Grillo could be willing to offer occasional, case-by-case support in parliament - provided that the proposals on the table are in line with the Five-Star Movement manifesto. That's a very similar to minority government arrangements elsewhere, where individual parties are relied on to push through certain measures.

But even if such a deal between Bersani and Grillo can be struck, it isn't exactly a recipe for (eurozone) stability - not least given some of Grillo's actual economic policies.

We will be over Grillo like a cheap suit, so keep reading our blog and follow us on Twitter @OpenEurope or @LondonerVince for all the latest updates from Italy.

Shocker in Italy: A comedian-cum-politician wins twice as many seats as the 'Brussels candidate'

So we now have a pretty good idea of the election results in Italy. And there are two victims: eurozone stability and Mario Monti.

The winner: comedian-cum-politician Beppe Grillo. 

We knew from earlier today that there would be a hung Senate, meaning massive challenges ahead in forming a functioning government.

But what about the Lower House - Camera dei Deputati? Well, counting is almost completed so these projections of how seats will be allocated (courtesy of Rai) will most likely be very close to the final results. Bersani's centre-left coalition managed to secure a majority. The gap between Bersani's centre-left coalition and Berlusconi's centre-right coalition is around 0.4%, so the huge difference in seats is due to Italy's electoral system (which gives the coalition or party with the most votes an automatic majority of almost 54%). 

But this is the shocker: Beppe Grillo's Five-Star Movement - the party that came out of nowhere and whose leader wants to hold a referendum on both euro membership and the restructuring of the country's debt - looks set to become the largest party in the lower house, and the second-largest one in the Senate. This is exceeding all expectations (though we warned you!).

Grillo is going to win 110 seats, more than double those of  Mario Monti - the outgoing technocrat PM who was the clear favourite in Berlin and Brussels. Monti will only have 46 MPs at his disposal.

The scale of this defeat was pretty obvious at the press conference that Monti gave earlier today, in which he said he was "very satisfied" with the election results but was visibly emotional.

In contrast, a relaxed but triumphant Grillo chucked about "having another hot tea and then going to bed" when interviewed by 'La Cosa' - the Five Star Movement's official radio/TV station.

That so many Italians voted for anti-austerity parties also bodes ill for the ability of the eurozone to press ahead with its cash-for-discipline recipe. We will provide a more detailed analysis once the final results are in. But for now at least, there's no doubt about who's having the last laugh...

N.B.: The breakdown above does not include the 12 MPs elected by Italians residing abroad and the MP elected in the Valle d'Aosta region, who are subject to different rules - a small caveat which does not change the bigger picture.

Italian elections: Early projections point to Brussels’ and Berlin’s worst nightmare

Update 18:32: the projections for the Lower House are starting to come in and it'll be a close one. The first RAI projection has Bersani's centre-left coalition on 29.1%, Berlusconi's coalition on 28.6% and Beppe Grillo going even stronger than in the Senate, at 26.3%. Again, the Five Star Movement - the party that has toyed with pretty clear enti-euro rhetoric - is set to become Italy's largest single political party (don't say we didn't warn you). 18 to 24 year olds are allowed to vote in the Lower House elections, whilst 25 is the threshold for the Senate elections, which possibly explains the additional Grillo bounce.

Update 17.50: It's not looking any better. These elections now look like producing a hung senate (though much can still happen). This projection is from La Repubblica:

If this holds, none of the coalition arrangements discussed before the elections will achieve a majority in the Senate. Under this scenario, Berlusconi's centre-right coalition would win 123 seats, Bersani's centre-left coalition 104, Beppe Grillo's Five-Star Movement 58 and Mario Monti's pro-reform bloc only 16.

So there are basically three options: A national unity government (if Bersani, Berlusconi and Monti join forces - could be possible if leading to fresh elections soon afterwards), a sensational Bersani / Grillo coalition (unlikely) or re-run election within 2-3 months. If we have re-run elections, there will be a lot of pressure to change the electoral law beforehand to avoid a similar stalemate to that which could occur now. For that, of course, you need a majority in both houses...

As we've said repeatedly over the last year: this one will be very complicated and uncertain...

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The first projections are in. And the results are the stuff of nightmares if you sit in Brussels or Berlin.

Now, the thing to remember is that seats in the Senate are allocated on a regional basis so overall support nationwide doesn’t necessarily translate into a corresponding number of seats. But the projections so far show the following:

• Monti – the darling in Berlin and Brussels – is taking an absolute hammering
• Under the current projections, Berlusconi could prevent a centre-left majority and there could be a hung Senate.
• Italians are coming out in droves to vote against austerity, with Beppe Grillo’s pro-euro referendum, sort-of-anti-euro Five Star Movement being the largest individual political party in half of the projections so far, and third with respect to Coalition arrangements (Grillo won’t join any coalition arrangements)

All eyes are now on the region of Lombardy, which, given the huge number of senators it provides, is likely to be crucial to the fate of these elections.

The vote count for the lower house trails the Senate count.

Can't wait for Italian election results? Here's a timeline

Elections in Italy are always spread over two days. Yesterday, about 55% of Italians cast their vote - marking a sharp 7.4% decline in turnout compared to the first day of the previous general elections in 2008. Turnout was generally much higher in the North than in the South of the country.

Polling stations will close today at 2pm GMT. How long will we have to wait to know the results? Here's an approximate timeline, although a lot will depend on how speedy the counting is (all times are GMT):

2pm: Polling stations close, and the first exit polls are released. Exit polls can give a first idea, but clearly have to be taken with a pinch of salt (they were quite far from the final outcome in the 2006 general elections, for instance). Counting starts shortly after closure, and Senate votes will be counted first.

3pm: First projections for the Senate are expected. These are going to be updated quite often - presumably every hour. The more votes are counted, the more reliable the projections. Have a look at our pre-election briefing to get a clearer idea of why the balance of power in the Italian Senate is key to these elections.

From here on, everything really depends on how quickly/smoothly the counting goes. Each polling station is free to start counting the votes for the lower chamber after all the Senate ballot papers have been counted.  

Around 7-8pm: Counting for the Senate should be over everywhere in the country. Counting for the lower chamber usually takes longer, given that only people aged over 25 are allowed to vote for the Senate - while everyone aged over 18 can vote for the lower chamber.

Around 11pm: It should be possible to get a good idea of the outcome for the lower chamber, although the final results will probably only be announced tomorrow morning.

The website of the Italian Interior Ministry (see here) will update the results real time, as they arrive from polling stations across the country. But to those who don't speak Italian and want the most important info from a variety of sources we recommend following us @OpenEurope or @LondonerVince

Sign of the times? Anti-euro comedian could come second in the Italian elections

This story most certainly caused officials in Brussels and Berlin - at least those who read the Italian press, or alternatively our daily press summary which was the first to break the news in the international sphere - to choke on their morning cappuccino.

Italian daily Il Corriere della Sera reports that, according to some internal opinion polls carried out by centre-left parties, the Five-Star Movement led by anti-euro comedian Beppe Grillo could become the second-largest party following the 24-25 February Italian elections.

It's true that the international media has over-stated Grillo's anti-euro stance - Europe is not one of the Five Star Movement's key pillars. But Grillo is definitely toying with the idea of Italy ditching the euro, and has said Italy should hold a referendum on its membership of the single currency. He has written stuff like this on his blog, for example:

In order to remain in the euro, we are starving the country…If we had the lira, we could solve our debt problem through a devaluation of our currency.

So think about it again: an anti-euro politician may finish second in the Italian elections - Italy arguably being the most pro-EU country of the lot.

And there's an element of panic going on.

In an interview with Le Figaro, Italy’s former Foreign Minister Franco Frattini (who is also a former EU Commissioner) says,

I don't rule out [Grillo’s Five-Star Movement] finishing second…This would be a tragedy comparable to [far-right leader] Geert Wilders' irruption into Dutch politics. One would then need to take into account the failure of the European idea in Italy.

These polls also raise serious questions over whether whether Mario Monti’s centrist bloc will win enough seats to be the kingmaker in the Italian Senate.

As we said: uncertainty still reigns in Italian politics. 

Will German anti-Berlusconi rethoric actually boost Silvio's chances?

Mario Monti has never claimed to be a professional politician. His lack of political experience became evident when he said,

[German Chancellor Angela] Merkel fears the success of left-wing parties [in Italy], especially in an election year for her. I don't think she has any desire to see [Pier Luigi Bersani's] Democratic Party arrive in government.

Merkel's spokesman, Steffen Seibert, quickly shot Monti down.The German Chancellor "has not made comments on the Italian elections. Nor did she do any in the past", he said.

Though it may seem like a minor event, the Italian press was all over it. And it's interesting as it may play straight into Silvio Berlusconi's hands. The man has built his election campaign on strong and uncompromising anti-German austerity rhetoric. He might be minded to ask if Monti cares more about Merkel than Italian voters?

This also illustrates how potentially counterproductive it is for German politicians to wade into the Italian election debate. Merkel may not endorse a candidate, but it is pretty obvious who the Germans don't want to see in power.

German Finance Minister Wolfgang Schäuble told Italian weekly L'Espresso,

I know very well that Silvio Berlusconi is a very effective electoral strategist. However, I'm convinced that Italians are clever enough not to make the mistake of voting for him again.

Another senior member of Merkel's CDU, Ruprecht Polenz, who chairs the Foreign Affairs Committee in the Bundestag, said,

Italy needs leadership for the future. Berlusconi does certainly not represent that.

Foreign Minister Guido Westerwelle did not name Il Cavaliere, but told Süddeutsche Zeitung,

Whoever forms the new [Italian] government, we count on the pro-European course and the necessary reforms to continue.

The more extraordinary since these politicians are all supposed to be Berlusconi's 'fellow' centre-right politicians. Now, the big question is, will this kind of stuff coming out of Germany boost or reduce Berlusconi's chances, given that it fits perfectly within his narrative that Italy is being kicked around by Berlin? Remember when a whole host of Europeans lined up to oppose George W. Bush (not that we compare the two) in 2004, acting as the ideal recruitment sergeants for the Bush campaign...

If you want to know what we think about Berlusconi, the Italian elections and what they mean for the future of the eurozone, check out our new briefing outlining a number of post-election scenarios. And follow us on Twitter @OpenEurope or @LondonerVince for real-time updates from Italy.  

Berlusconi's farewell?

Over the past few months, Silvio Berlusconi repeatedly suggested (but never 'officially' confirmed) that he intended to run for Prime Minister in next year's general elections. However, he now seems to have backed down over his planned return. In a TV interview his morning, he made a couple of unequivocal remarks:

I want the unity of [Italian] moderates, and in order to achieve it, if necessary, I'm even ready not to run [in next year's elections]. 

What's strange about it? I intend to do what's good and useful to my country and...if I need to step aside, I'll do it. 

There's no trick or room for second thoughts. 

In other words, Il Cavaliere's well-known (albeit slightly anachronistic) obsessive fear of 'leaving the country in the Communists' hands' seems to have prevailed in the end. But this was by far the most interesting part of the interview,

I wouldn't rule out [Italian Prime Minister] Mario Monti as the leader of this moderate front. Monti has always moved within this political area.

Berlusconi is clearly not averse to U-turns - but, as we pointed out on this blog before, he is also a seasoned politician. Now, the latest opinion polls have all signalled that his party is in a free fall, as it would win only 15% of votes if elections were to take place now. However, the same opinion polls also show that centre-left Democratic Party only commands around 25% of support.

With comedian Beppe Grillo's Five-Star Movement consistently polling at around 20% and consistently ruling out post-election alliances with the 'old political establishment', Italy's two mainstream parties may ultimately have to go for some sort of German-style 'grand coalition' (possibly including a couple of smaller, pro-reform centre parties) if they want to achieve a sufficient majority - which, incidentally, now appears to be the only chance for Berlusconi's party to stay in government after the elections.

If confirmed, Berlusconi's decision not to stand in next year's election would therefore clear what would, otherwise, arguably be the main obstacle to such a solution. And Monti? Well, he is clearly not keen to stand in the elections - not least because that would involve picking up a political party to back his candidacy.

However, under Italian law, it is the Italian President who is responsible for tasking someone with forming the new government - and the person does not necessarily have to be the leader of one of the political parties that contested the elections. Therefore, if Italian party leaders converge on a second mandate for Monti, he may have to follow up on his pledge to "be there" for Italy, if the country's political forces ask him to stay on.
        

The Lira is back (for a weekend)

Lega Nord has decided to treat its supporters to a bit of 'throw back' party, remembering the days when Italy used the lira as its currency. The party has organised a rally in Avio (north-eastern Italy, where else?) for this weekend, at which the lira will be used as the only official currency. Interestingly, the two Lega Nord MPs who promoted the rally - Maurizio Fugatti and Sergio Divina - have decided to officially invite Italian Prime Minister Mario Monti.

The two said in a joint statement,

“This will be the opportunity to show to the technocrats and the enlightened bureaucrats who built this Europe, including Prime Minister Mario Monti, the damages caused by the euro, which they decided to introduce sitting around a table without the people’s approval – the consequences of which the citizens are now paying every day in terms of cost of living. The need for a popular referendum is now evident, so that those who work and pay taxes can express their opinion on Europe and the euro.” 

It is the second time in only a couple of days that Italian politicians use the words 'euro' and 'referendum' in the same sentence. From the opposite side of the political spectrum, Italian comedian Beppe Grillo - whose Five Star Movement has been consistently polling at over 20% during the past few months - wrote on his blog recently,

“A referendum on the euro and the restructuring of [Italy’s public] debt is ever more necessary. See you in parliament...It will be a pleasure.” 

Neither of these parties is likely to be in government after next year's elections, and recent opinion polls suggest that a referendum on the euro would see a quite clear victory for the 'stay inside' camp. However, as we noted several times before (see here, here and here), such a change in rhetoric and the fact that cross-party support for the single currency can no longer be taken for granted in Italy is in itself very significant.