Italian politics just got a lot more complicated.

Over the weekend, former prime minister Silvio Berlusconi, the leader of Italy’s largest center-right party, Forza Italia, and Matteo Renzi, the leader of Italy’s largest center-left party, the Partito Democratico (PD, Democratic Party), joined forces (pictured above) to introduce the blueprint for a new electoral law.

Notably, the deal didn’t include input from prime minister Enrico Letta, a moderate who leads a fragile ‘grand coalition’ government that includes not just his own Democratic Party, but centrists close to former technocratic prime minister Mario Monti and one of Italy’s two main center-right blocs, the Nuovo Centrodestra (NCD, the ‘New Center-Right’), led by deputy prime minister and interior minister Angelino Alfano.  The Alfano bloc split two months ago from Berlusconi’s newly rechristened Forza Italia, which pulled its support from the Letta government at the same time.

The deal is a political masterstroke by Renzi because it makes him appear to have stolen the initiative from Italy’s prime minister.  Letta formed a government in May 2013 with the two priority goals of passing a new election law and deeper economic reforms.  Despite a ruling in December 2013 that Italy’s current elections law is unconstitutional, Letta’s government has not yet put forward an alternative acceptable to the three main groups in the coalition.  So the Renzi-Berlusconi deal is now the only concrete proposal — it backs up the talk that Renzi, the 39-year-old Florence mayor, will be a man of action in Italian politics.  Renzi won the party’s leadership in a contest in November 2013 over token opposition.  Renzi is neither a minister in Letta’s cabinet nor a member of the Italian parliament, and he’s been more of a critic of the current government than a supporter of a prime minister who until recently was the deputy leader of Renzi’s own party.

By way of background (those familiar can skip the following three paragraphs):

Italy has gone through a few different electoral systems, but most of them have featured either closed-list or only partially open-list proportional representation.  Reforms in 1991 and 1993 transformed the previous system in what’s informally been called Italy’s first republic, which spanned the postwar period until the collapse of the dominant Democrazia Cristiana (DC, Christian Democracy) in a series of bribery and corruption scandals collectively known as Tangentopoli (‘Bribesville’).  But the current system dates to 2005, when Berlusconi ushered in a new law that everyone (including Roberto Calderoli, who introduced the 2005 legislation) now agrees is awful and which Italy’s Corte costituzionale has now invalidated.

The current law, which governed Italy’s elections in 2006, 2008 and 2013, provides for a national proportional representation system to determine the 630 members of the lower house, the Camera die Deputati (Chamber of Deputies).  The party (or coalition) that wins the greatest number of votes nationwide wins a ‘bonus’ that gives it control of 55% of the lower house’s seats, not unlike the Greek electoral system.  But the 315 members of the upper house, the Senato (Senate), are determined on a regional PR basis — the top party/coalition in each of Italy’s 20 regions wins 55% of the region’s seats.  That means, however, that one party/coalition can hold a majority in the lower house, but wield much less than a majority in the upper house.

That’s the exact situation in which Italy found itself after the February 2013 elections, when the Democratic Party and its allies in the centrosinistra (center-left) coalition narrowly edged out Berlusconi’s centrodestra (center-right) coalition.  Beppe Grillo’s protest Movimento 5 Stelle (M5S, the Five Star Movement) followed closely behind in third place.  It meant that while the Italian left controlled the Chamber of Deputies, it couldn’t muster a majority in the Senate.  After a three-month political crisis that ended with the inability to elect a new Italian president (Italy’s parliament ultimately decided to reelect the 88-year-old Giorgio Napolitano to an unprecedented second seven-year term), the Democratic Party’s leader Pier Luigi Bersani resigned, and Napolitano invited Letta to form Italy’s current government.

The Renzi-Berlusconi deal sketches out an electoral reform on roughly the following lines:

• The Chamber of Deputies would become, by far, the predominant chamber of Italian lawmaking.  The Senate would hold fewer powers as a region-based chamber.  Italy’s national government would also consolidate more powers away from Italy’s regions.
• Deputies would be elected, as they are now, on the basis of national, closed-list proportional representation, which concentrates power in the hands of party leaders and elites (as opposed to open-list, which would allow voters to choose the members that represent them in parliament).  An alternative might be something akin to the proportional aspect of the Spanish electoral system — in Italy, it would mean a proportional system divided into 118 constituencies, each of which elects four or five deputies.
• If a party/coalition wins over 35% of the vote, it will still yield a ‘majority bonus’ of either 53% or 54% of the seats in the Chamber of Deputies.  If no party/coalition wins over 35%,  the top two parties/coalitions will hold a runoff to determine who wins the majority bonus.
• Italy would introduce a threshold for parties in order to reduce the fragmentation of Italy’s politics — a party running outside a coalition would need to win 8% of the vote and a party running inside a coalition would need to win 4% or 5% of the vote running outside a coalition (though the thresholds would be much lower in a multi-district ‘semi-Spanish’ system).
• The deal would not replicate the French system, which elects legislators to single-member districts in a two-round election, and which has been discussed often as an alternative for Italy.

The details are not so important at this stage, because they could change as the Renzi-Berlusconi deal begins the long process of turning into legislation.  But if Renzi can pull the majority of the Democratic Party along, and if Berlusconi’s Forza Italia supports the deal, the two groups could steamroll Italy’s smaller parties, even in the Senate.  If Alfano and his bloc joins, the deal would be unstoppable.  Renzi has already won a majority of the party’s executive committee (a promising first sign), and Alfano has indicated that he’s open to the reform (though less excited about closed lists).

But there are all sorts of fallout effects — politically, legally and electorally — to contemplate over the coming days and weeks.

Renzi’s political position remains difficult — and Berlusconi knows it.  Right now, the Democratic Party is split between its leader (Renzi) and a prime minister (Letta), and Berlusconi is masterfully playing Renzi and Letta off one other.  As long ago as November 2012, when Renzi unsuccessfully challenged Bersani to lead the centrosinistra, Berlusconi has long indicated he prefers Renzi, both because of Renzi’s project to pull the Democratic Party far from its leftist roots and because Renzi’s populism resembles Berlusconi’s political approach for the past two decades.  It escaped no one’s attention that Berlusconi came to Renzi at the Democratic Party’s headquarters on Saturday to discuss the details — a sign of massive respect from a figure who still dominated Italy’s politics.  If Conservative prime minister David Cameron’s polish earned him the moniker as ‘heir to Blair,’ Renzi is must as much heir to Berlusconi.

But the longer the Renzi/Letta tension endures, the harder it is for Renzi both to remain a loyal PD leader and retain his ‘energetic,’ populist edge.  That means elections sooner rather than later, so long as Renzi can’t be blamed for pulling the cord on Letta’s government prematurely.  But in a world where Berlusconi yanked his support from Letta’s government over a mere 1% sales tax hike, it’s difficult to take seriously the notion that Berlusconi would ever back Renzi’s call for major economic reforms.  For the record, none of Berlusconi’s previous governments prioritized the kind of reforms that Italy desperately needs to become more competitive.  Instead, there’s a sense that the wily Berlusconi sees this deal as a vehicle to split the Italian left and to give the Italian right another chance to retake power (a goal that Berlusconi, incredibly, almost achieved in February 2013).  That would mean Berlusconi’s return to power, even if Alfano or another Berlusconi ally, such as his daughter Marina, becomes prime minister.  If the Italian right controlled government again, it could easily ameliorate the worst effects of both Berlusconi’s conviction and his ban on holding public office.

The Renzi-Berlusconi election deal could still be unconstitutional.  There’s still a significant chance that the constitutional court won’t find this electoral law up to par either.  The concept of a parliamentary ‘runoff’ obviously tries to address the constitutional court’s ruling, which termed Italy’s current election law ‘manifestly unreasonable.’  In a runoff scenario, the leading party would be able to point to a mandate from the majority of the Italian electorate, thereby making the ‘winner’s bonus’ somewhat more representative.  But that’s not necessarily what could happen.  For instance, take the latest January 17 SWG poll, which finds that the centrosinistra would win 37.2% of the vote, the centrodestra would win 34.0% and the Five Star Movement would win 19.9%.  That means that the centrosinistra would win a first-round victory and still hold many more seats in the Chamber of Deputies than its share of the national vote.  The parties supported by the remaining 62.8% of at least this hypothetical Italian electorate would be stuck with 46% or 47% of the remaining parliamentary seats.  Moreover, the court heavily criticized the closed-list system, and the Renzi-Berlusconi deal perpetuates that aspect of Italian election law.

A war on the Italian left.  For all of the awkwardness of the political dance between Renzi and Letta, they both largely support the push for reform.  But there are plenty of powerful voices within the party that oppose the budget austerity of the Monti-Letta governments as well as wide-ranging economic reforms.  That’s one reason why Stefano Fassina resigned earlier this month as deputy minister of finance, in direct repudiation of Renzi, and why Gianni Cuperlo has now stepped down as the (largely ceremonial) president of the Democratic Party.  Despite the margin of Renzi’s PD leadership victory, it’s hard to believe that the Italian left has wholly embraced him just two years after they overwhelmingly chose Bersani over Renzi.  The young leader also faces a delicate balance in criticizing Letta’s government — he risks being seen as putting ambition over a functioning government.  The Democratic Party, in its current format, was created only seven years ago, and it pulls together former communists, former Christian Democrats, trade unionists, social democrats, Renzi-style reformists and Letta-style technocrats, among others.  It remains a faction-ridden, multi-headed hydra.  There’s nothing predestined about its perpetual unity, and Renzi risks fracturing the party if he pushes Fassina, Cuperlo and other leftists to form a competing party (perhaps a merger with a handful of other communist and leftist parties that could command a small, if significant, share of the vote).

Whither Grillo?   In some ways, the Renzi-Berlusconi deal also seems incredibly reactionary.  It’s as if Renzi and Berlusconi tried to craft a system that would essentially minimize the impact of the Five Star Movement and prevent it from holding any real power.  If the results of the 2013 election were replicated under the proposed system, the centrosinistra wins 29.5%, the centrodestra wins 29.1%, and the Five Star Movement wins 25.5%, the runoff would exclude Grillo’s protest movement entirely.  If Grillo convinces voters that the latest electoral law amounts to a stitch-up among the same old corrupt actors in Italian politics on both the left and the right, it could give his flagging movement new momentum.  Not surprisingly, the Five Star Movement’s leaders have come out strongly against the deal.

The deal could make Italy’s political system much more presidential.  Throughout the world’s various electoral systems, it’s odd to see a runoff for a proportional representation-style parliamentary system.  The closest analog might be Australia, where everyone essential discounts the initial vote and looks to the automatic two-party preferred vote.  The runoff would feel incredibly ‘presidential,’ pitting the leaders of the centrodestra and centrosinistra against one another directly (especially in a closed-list system).  But Australia, unlike Italy, has had an entrenched  two-party tradition for the past century.  Though you can trace the Italian left and the Italian right to the Italian civil war of the mid-1940s, and though the ‘first republic’ largely pitted the liberal-conservative Christian Democratic tradition against the Communist tradition, Italian party politics have been much more fluid.  That makes future political outcomes more uncertain.

A system of parties or a system of coalitions?  Another looming question is how the proposed election law might affect the state of Italian parties vis-à-vis the broad centrodestra and centrosinistra coalitions, which have dominated the ‘second republic’ since the mid-1990s.  The centrosinistra coalition that contested the 2013 elections amounts to a partnership between the Democratic Party and Puglia regional president Nichy Vendola’s democratic socialist Sinistra Ecologia Libertà (SEL, Left Ecology Freedom).  SEL preferred in May 2013 to enter the opposition over joining Letta’s government, and there’s little love lost between Renzi and Vendola.  Though there’s more than a hint that the Alfano/Berlusconi split is symbiotically strategic (it hedges the Italian right by giving it voices in both government and opposition), the centrodestra also includes a handful of far-right parties and the autonomist Lega Nord (LN, Northern League).  Like SEL on the left, the Lega is currently in opposition.  What’s more, the Lega has traditionally been a thorn in past Berlusconi governments, and it brought Berlusconi’s first 1994-95 government down within nine months.  A minimum threshold will continue to give smaller parties incentives to join broader coalitions.  But it might be tempting for Forza Italia and the Democratic Party to go it alone under the proposed system.  Both Renzi and Berlusconi probably believe that they can make it into the runoff on the strength of their own parties (even if Grillo somehow takes the second spot, not impossible).  On the basis of parties (and not coalitions), the same January 17 SWG poll shows that the Democratic Party leads with 32.4%, Forza Italia wins 20.8%, the Five Star Movement still wins 19.9%, the Lega wins just 5.2%, Vendola’s SEL wins 3.9% and Alfano’s NCD wins 3.8%.  That means that if the thresholds were high enough, the Lega, SEL and the NCD might all lose their seats under the proposed law, not to mention the smaller centrist parties that banded together with Monti and Christian democratic leader Pier Ferdinando Cassini in the last election.

Photo graphic credit to Vanity Fair Italy.