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Italy

Pier Luigi Bersani has five days to build an Italian government

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When elections were called in Italy late in 2012, the centrosinistra (center-left) coalition united around Pier Luigi Bersani thought, on the basis of polls that showed Bersani (pictured above, left) with a wide lead, that it was nearly assured that they would easily win a five-year mandate to govern Italy.Italy Flag Icon

Instead, they may have won just a five-day mandate to show that they can win a confidence vote in both houses of Italy’s parliament.

The leader of Italy’s Partito Democratico (PD, Democratic Party), Pier Luigi Bersani, will have the first formal opportunity to form a government after three days of talks between Italy’s president Giorgio Napolitano (pictured above, right) and the various party leaders, including former technocratic prime minister Mario Monti, who ran on a platform of extending his reform program; former prime minister Silvio Berlusconi, whose centrodestra (center-right) coalition nearly outpaced Bersani’s coalition; and Beppe Grillo, the leader of the Movimento 5 Stelle (the Five Star Movement), who himself did not run for a seat in the Italian parliament.

Napolitano, in a rare speech today, pleaded for a solution, arguing that institutional stability is just as important as financial stability.

Yesterday, Bersani called for a grand ‘governo di cambiamento,’ a government of change that would draw from all of the parties in the parliament.  It’s not immediately clear, however, what exactly Bersani would do with such a government or that the announcement would significantly shake up the coalition talks.

Bersani will have until March 26 — Tuesday — to show that he can pull together a patchwork vote of confidence.  Otherwise, Napolitano will conduct further talks with the party leaders in search of a Plan B.

In the February 2013 elections, the centrosinistra won an absolute majority of the seats in the 630-member Camera dei Deputati (House of Deputies) because under Italian election law, the winner, by whatever margin, of the nationwide vote automatically wins 54% of the seats.  So Bersani commands a majority in the lower house, though he does so after winning a surprisingly narrow victory (29.54%) over Berlusconi’s centrodestra (29.18%) and Grillo’s Five Star Movement (25.55%):

Italy Camera 2013

The current crisis of governance in Italy springs from the fact that there’s no similar ‘national winner’s bonus’ for the upper house, the Senato, where the centrodestra actually won more seats than the centrosinistra.  That’s because there’s a regional ‘bonus’ — the party with the most support in each of Italy’s 20 regions is guaranteed an absolute majority of the senatorial seats in that region.  As Berlusconi’s coalition won so many of the contests in Italy’s largest regions (i.e., Piedmont, Sicily, Campania), however narrowly, he won the largest bloc in the Senato:

Italy Senate 2013

In the immediate aftermath of the election results, I argued that Italy faced essentially four paths for a government:

  1. A Bersani-Monti minority government. 
  2. A Berlusconi-Bersani ‘grand coalition.’
  3. A formal or informal Bersani-Grillo alliance.
  4. Snap elections (after the election of a new president).

Since then, we haven’t seen an incredible amount of action, because the parliament only sat for the first time last weekend, when it elected speakers to both the lower and upper houses.  None of those are likely to happen in any meaningful sense, but there are small variations on each that could keep Italy’s government moving forward, if only for a short-term basis to implement a narrow set of reforms (e.g., a new election law) and to elect a new president — Napolitano’s term ends in May.

So with the clock ticking for Bersani’s chances of becoming prime minister and leading a government, where do each of those options still stand? Continue reading Pier Luigi Bersani has five days to build an Italian government →

Czech Republic, European Union

Václav Klaus, fresh from Czech presidency, discusses eurozone in Washington

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Just three days after leaving the Czech presidency, Václav Klaus spoke at the Cato Institute in Washington earlier today — Klaus is joining Cato as a senior distinguished fellow this spring.czechEuropean_Union

Klaus, who stepped down after a decade in office, didn’t break much new ground — his remarks were essentially everything you’d expect from the famously euroskpetic former president, who was the last European Union head of state to sign the Treaty of Lisbon (and quite reluctantly, at that).

The great eurozone fight

In brief, Klaus has long argued that the eurozone is not an optimal currency zone, it’s a project that was implemented without sufficient democratic input from everyday Europeans, and the economic costs of monetary integration and centralization far outweigh the benefits, and those costs have become increasingly evident from the economic pain suffered today in Greece, Spain, Italy and throughout Europe.

Klaus’s diagnosis has become fairly uncontroversial — both on the left and the right, and for both intergovernmentalists and neo-functionalists alike.  A lot of European federalists would agree that the European Union needs more robust democratic institutions at the supranational level.  Many economists agree that the one-size-fits-all monetary policy has been incredibly harmful to many countries in southern Europe since 2008, and the painful internal devaluation forced upon many countries in the European periphery, from Latvia to Greece, has been a needless exercise in poor economic policymaking.

But whereas many economists would argue that the solution lies in greater fiscal harmony (especially through fiscal transfers from wealthier regions to poorer regions), looser monetary policy, a eurozone-wide borrowing capacity, debt forgiveness and a doubling-down on the more long-standing commitment to the free movement of goods, services and people throughout the European Union, Klaus’s solution is to unwind the eurozone.

Klaus would rather see a way for Greece — and other troubled economies — to simply exit from a eurozone that’s delivered now nearly half a decade of GDP contraction, painful downward pressure on income, and widespread unemployment and social rupture.

That’s not a crazy idea economically — if Greece could leave the eurozone tomorrow (or if Greece simply went bankrupt, thereby essentially forcing Greece out of the eurozone), it could conceivably pursue a much more aggressive monetary policy, devalue its currency, and take other steps to make its exports more competitive in global markets once it’s no longer yoked to a monetary policy that’s better suited for, say, the German economy.

But that’s not the entire story.  Greece might also suffer extraordinarily in the short-run while it makes that transition — starting with how it would reintroduce the drachma and how it would even finance basic governance outside the current eurozone regime, forcing perhaps even more austere budget-cutting in a country where the social safety net is already tattered.

And those are just the problems inside Greece — though the Greek economy is just a fraction of the European economy, it could set off a chain reaction of fear, bank runs and deep recession throughout the eurozone as investors pull out of not only the peripheral economies, but also out of the entire eurozone.  How would a massive Greek devaluation affect Cyprus? Would Spain and Italy withstand the inevitable bank runs and currency flight? The chain reaction of unraveling one of the world’s foremost reserve currencies could well be catastrophic.

Looking to national parallels: the Czechoslovak breakup and German reunification

Klaus related the current monetary union to the breakup 20 years ago of Czechoslovakia into two separate nations — a process that Klaus said was painful though necessary (though the Slovak economy is doing much better these days than the Czech economy).  But Greeks might be troubled by the more painful example of the breakup of the Yugoslav federation and the Soviet Union, both of which were also monetary unions as well as political unions.  The breakup of the ‘ruble zone’ led to massive hyperinflation throughout the Soviet Union and an economic shock that cut standard of living in half.  There’s simply no way to know what forces could be unleashed by the process — no matter what anyone says, there’s not a precedent for unraveling even a tiny part of the world’s largest currency union in an orderly fashion.

I would have liked to hear, in particular, Klaus’s thoughts on another contemporary experiment in currency union: German reunification.

Continue reading Václav Klaus, fresh from Czech presidency, discusses eurozone in Washington →

France, Italy

How would Italian politics function under a ‘French’ electoral system?

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frattini

Former center-right foreign minister Franco Frattini is far from the fray of Italian politics these days — he didn’t run in last week’s Italian elections and he’s currently a candidate to replace Anders Fogh Rasmussen as the secretary general of the North Atlantic Treaty Organization.France Flag IconItaly Flag Icon

Nonetheless, Frattini (pictured above) spoke in Washington yesterday to the American Israel Public Affairs Committee as well as to a small audience at Johns Hopkins University’s School of Advanced International Studies, and amid a set of thoughtful remarks about Italy’s election and its post-vote gridlock, one remark stood out in particular — that Italy should revise its electoral law by adopting the system currently in use by France, a two-round system whereby deputies are elected in single-member constituencies.

When election results came in last Monday, despite pre-election polls showing that the broad centrosinistra (center-left) coalition headed by Pier Luigi Bersani would win, returns showed Bersani’s coalition doing poorer than expected.  The broad centrodestra (center-right) coalition headed by former prime minister Silvio Berlusconi and the anti-establishment, anti-austerity Movimento 5 Stelle (M5S, the Five Star Movement) founded by blogger and activist Beppe Grillo, both polled much better than expected — so much so that Italy now has a hung parliament. A centrist coalition headed by outgoing technocratic prime minister Mario Monti placed far behind in fourth place.

A ‘winner bonus’ for Bersani in Italy’s lower house, Camera dei Deputati (House of Deputies), based on the fact that his coalition (just barely) won a greater number of votes than any other coalition or party, means that the center-left will command a 340-seat absolute majority in the Camera.

But because seats are awarded on a regional basis to Italy’s upper house, the Senato (Senate), no one emerged with anything close to a majority — and it became clear that even a widely mooted Bersani-Monti coalition would fall far short of a majority.

So election law reform has become a top-shelf issue in the wake of last week’s elections, not only because of the inconclusive result last week, but because it’s one of a handful of items that both Grillo and Bersani, the leader of the center-left Partito Democratico (PD, Democratic Party), agree upon, so reform could be a key element of any agenda that a short-term Bersani-Grillo alliance might enact before a new election.

Even members of Berlusconi’s Popolo della Libertà (PdL, People of Freedom) want to reform the election law, and even Roberto Calderoli, who pushed the law through the Italian parliament, has called it a ‘porcata,’ a pig’s dinner.

But agreeing that the election law is a mess and agreeing on a new law are two different things.

So what have Italy’s three most recent voting systems — the postwar open-list proportional representation system, the mixed, mostly first-past-the post system adopted in 1993, and the closed-list proportional representation system (with a ‘winner bonus’) adopted in 2005 — historically meant for stability or chaos in Italy’s parliament?

How does the French system vary from Italy’s current system?

And how would a French system work in Italy?

Continue reading How would Italian politics function under a ‘French’ electoral system? →

Italy, Lazio

Zingaretti victory in Lazio caps subdued election for Italy’s far right

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zingaretti

Although relatively more attention has been on Italy’s general election and its aftermath and on Roberto Maroni’s victory in the Lombardy regional elections, Nicola Zingaretti’s victory as the next regional president of Lazio has launched the career of a new face of the next generation of Italy’s political leadership while delivering a stinging defeat to one of Italy’s most prominent far-right figures. Italy Flag Iconlazio

Zingaretti (pictured above), the candidate of the center-left Partito Democratico (PD, Democratic Party), won a whopping victory over Lazio’s former regional president Francesco Storace, leader of La Destra (The Right), a nationalist conservative party in Italy, Davide Barilliari, the candidate of the Movimento 5 Stelle (M5S, the Five Star Movement) and Giluia Bongiorno, who led a centrist coalition in the election.

laziopresident

The result leaves the center-left in control of 28 seats in Lazio’s regional parliament, with 13 for the center-right, seven for the Five Star Movement and just two for Bongiorno’s centrists.

Zingaretti, elected to the European Parliament in 2004 and thereafter elected as president of the province of Rome in 2008, is the latest center-left star to emerge out of Roman politics, and he could well use the Lazio presidency as a springboard into a future in national politics.  Former Rome mayor Francesco Rutelli (unsuccessfully) led the center-left in the 2001 general election and subsequently served as prime minister Romano Prodi’s minister of culture and tourism.  Rutelli’s successor as Rome mayor, Walter Veltroni, helped found the Democratic Party in Italy, and thereupon led it (again, unsuccessfully) in the 2008 general election.

Zingaretti’s first task will be to restore integrity to regional government in Lazio, Italy’s third-most populous region.  The outgoing incumbent, the PdL’s Renata Polverini, resigned early after being implicated in a funding scandal whereby public officials were using government funds for private use.  Her predecessor, the center-left Piero Marrazzo, lost reelection after he was blackmailed over a video recording of Marrazzo engaging the services of a transsexual prostitute.

More immediately, however, the strength of Zingaretti’s campaign may well have helped Pier Luigi Bersani’s centrosinistra (center-left) coalition win victory in the senatorial contest in Lazio — Bersani’s coalition won just 32.3% against former prime minister Silvio Berlusconi’s centrodestra (center-right) coalition, which won 28.8%, a much smaller margin of victory than Zingaretti posted over Storace.

The landslide defeat is a setback for Storace, president of Lazio from 2000 to 2005, and one of the most well-known members of Italy’s nationalist right.

But it’s also a setback for Italy’s nationalist conservatives after a campaign saw Berlusconi shared some kind words for Italy’s former fascist dictator Benito Mussolini, and whose party, the Popolo della Libertà (PdL, People of Freedom), includes Mussolini’s granddaughter, Alessandra Mussolini, a former Playboy model, was elected to Italy’s upper house, the Senato (Senate) over the weekend.  Continue reading Zingaretti victory in Lazio caps subdued election for Italy’s far right →

Italy

More thoughts on the final Italian election results and Italy’s electoral law

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For what it’s worth, we have the final results from the weekend’s Italian election from the interior ministry.Italy Flag Icon

As exit polls indicated and early resulted showed, Pier Luigi Bersani’s centrosinistra (center-left) coalition won 29.54% in the race for Italy’s lower house of parliament, the Camera dei Deputati (House of Deputies) to just 29.18% for former prime minister Silvio Berlusconi’s centrodestra (center-right) coalition, 25.55% for Beppe Grillo’s protest  Movimento 5 Stelle (M5S, the Five Star Movement) and just 10.56% for technocratic prime minister Mario Monti’s centrist coalition.

As the winner of the largest vote share, Bersani’s coalition is entitled to a majority of 54% of the seats in the lower house:

Italy Camera 2013

In the upper house, the Senato (Senate), there’s no such ‘seat bonus’ at the national level; instead, the winner in each of Italy’s 20 regions gets a ‘bonus’ in that it wins 55% of the seats in each region, meaning that the centrodestra actually edged out the centrosinistra in total number of senatorial seats, even though Bersani’s coalition won 31.42% and Berlusconi’s coalition won just 30.58%.  That means, of course, if the Senato‘s seats were awarded on the same basis as the Camera‘s seats (they cannot be out of constitutional considerations with respect to Italy’s regions), Bersani would be the clear prime minister today.

Italy Senate 2013

The reason for the center-right’s senatorial victory is pretty clear when you look at the region-by-region winners (as shown the map below, with blue for centrodestra and red for centrosinistra):

Screen Shot 2013-02-26 at 2.49.21 PM

As you can see, not only did Berlusconi nearly sweep the mezzogiorno, the swath of southern Italy that contains Campania and Sicily, (the second- and fourth-largest regions), his coalition won Lombardy, the largest prize in the center-north of the country.  His coalition also came very close to winning Piedmont in the northeast and Lazio in the center as well, and the centrosinistra leads in total votes only because it was able to rack up large margins in its historically reliable heartland in the regions of Tuscany and Emilia-Romagna.

It’s in particular fascinating to take a look at the party-level vote, especially in the lower house elections, because you get a better sense of how the coalition system and the national ‘seat bonus’ system really has skewed the next parliament to favor the centrosinistra (center-left) coalition, despite the fact that Grillo’s Five Star Movement actually outpolled not only Berlusconi’s party, the Popolo della Libertà (PdL, People of Freedom), but also even Bersani’s party, the Partito Democratico (PD, Democratic Party), though it didn’t outpoll the broader center-left and center-right coalitions:

Camera vote 2013

Here, however, is the breakdown of seats by party:

Camera seats 2013

The disparity between vote share and awarded deputies shows how important coalitions have become in Italian elections since Berlusconi’s government changed Italy’s election law in 2005, which transformed the previous system — in operation from the early 1990s — a split vote that awarded most of the seats on a ‘first-past-the-post’ basis and some on a proportional representation basis to the current ‘proportional representation’ system (with a national ‘bonus’ in the lower house and a regional ‘bonus’ in the upper house).* Continue reading More thoughts on the final Italian election results and Italy’s electoral law →

Italy

Where Italy goes from today’s elections: a look at four potential outcomes

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Although we still don’t know exactly how the results of the weekend’s Italian election will turn out entirely, we know enough to say that Italy’s short-term future will be beset with gridlock.Italy Flag Icon

We know that, unless there’s a major change among the final results (very unlikely at this point, but still a possibility — La Repubblica‘s latest count shows a 0.4% gap between the two major coalitions), Pier Luigi Bersani will have led his broad centrosinistra (center-left) coalition to a victory in Italy’s lower house, the 630-member Camera dei Deputati (House of Deputies).  That’s because the national vote winner of the lower house elections automatically wins at least a 54% majority of the seats in the lower house.

We know that, whatever the final result, both Bersani’s centrosinistra coalition and the centrodestra (center-right) coalition led by former prime minister Silvio Berlusconi will each hold between 110 and 120 seats or so in Italy’s upper house, the Senato, which is composed of 315 elected members and, currently, four additional ‘senators for life.’ (That’s because the majority ‘seat bonus’ is awarded to the winner of each regional vote rather than on a national basis like in the Camera dei Deputati).

It doesn’t really matter who holds the greatest number of senatorial seats, because no group or party will control enough seats in the Senato alone to form a majority government, including Bersani’s coalition.

So given Bersani’s lead in the lower house, whatever government emerges — if a government emerges — will have to include Bersani’s center-left bloc, with presumably Bersani heading the government as prime minister.  In the short term, that puts Bersani in the driver’s seat but not, perhaps, for long.

None of Bersani’s options, frankly, are very stable, for either his center-left coalition or for Italy.

Given the ongoing eurozone sovereign debt crisis, the pressure will be on Bersani and on the entirety of Italy’s political elite, which now must be said to include Beppe Grillo and the leaders of the Movimento 5 Stelle (the Five Star Movement).  Right now, Italy’s 10-year bond rate is 4.49%, much lower than the 7%-and-higher rates that led to the downfall of Berlusconi’s government in November 2011.  But that could change — and fast — if Italy’s political leadership seems unable to form a government.  Grillo and his allies are now stakeholders in ensuring that Italy doesn’t unravel.

If Bersani succeeds in forming a government at all, it will be less stable than any government in Italy’s so-called ‘second republic’ — i.e., the period from the early 1990s to the present that’s been characterized by the downfall of the former Christian Democrats during the 1992 Tangentopoli (‘bribesville’) scandal that implicated virtually all of Italy’s political elite, the emergence in 1994 of Silvio Berlusconi as the head of the mainstream Italian right, and the increasing consolidation of the mainstream Italian left through what’s now become the Partito Democratico (PD, Democratic Party).

Any Bersani-led government, at this point, will not only be less stable than Berlusconi’s governments, but even less stable than the four notoriously rocky governments of Italian prime ministers Romano Prodi, Massimo D’Alema and Giuliano Amato from 1996 to 2001 and Prodi’s short-lived and troubled return to government from 2006 to 2008.

In light of that bleak background, here are the four potential outcomes over the coming days that you should watch for:

Continue reading Where Italy goes from today’s elections: a look at four potential outcomes →

Italy

Making sense of today’s Italian election results

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beppe

UPDATE, 7:30 p.m.: Here’s an additional piece on where Italy goes from here — a look at four potential outcomes to watch for in the days ahead.

* * * * *

The election results from Italy’s general election have largely been counted, and they’re backing up the exit polls (not the initial instant polls from the preceding hours leading up to the election) that show a hung parliament — leaving the short-term future of Italy’s government unclear.Italy Flag Icon

Right now, it certainly looks like Pier Luigi Bersani’s centrosinistra (center-left) coalition will win a majority in the elections for Camera dei Deputati (House of Deputies), Italy’s lower house, while former prime minister Silvio Berlusconi’s centrodestra (center-right) coalition will win a majority in the elections for Italy’s upper house, the Senato (Senate).

Nonetheless, the big winner is the Movimento 5 Stelle (M5S, the Five Star Movement), the protest group of blogger and comedian Beppe Grillo (pictured above), which has significantly outperformed polling expectations and may well become the single largest ‘party’ in the Italian parliament.

Bersani leads in Italy’s lower house

In the 630-member lower house, the latest projections show Bersani’s centrosinistra with a small lead of around 29% or 30% to just 28% or 29% for the centrodestra, and a whopping 25% or 26% for the Five Star Movement.  Far behind in fourth place is prime minister Mario Monti’s centrist coalition with around 11%.  The communist, green, anti-corruption Rivoluzione Civile (RC, Civil Revolution) headed by antimafia magistrate Antonio Ingroia has won barely over 2%.

If that result holds, it means Bersani will command an automatic majority in the lower house — the winner of the largest share of the votes wins 54% of the seats in the Camera dei Deputati, so Bersani is likely to hold 340 seats.

Berlusconi leads in Italy’s upper house

In the Senato, however, seats are awarded proportionally on a regional basis, with a regional ‘bonus’ — the winner of the largest share of the votes in each region automatically wins 55% of the seats in that region.

It’s too soon to tell whether Bersani or Berlusconi will win the greater number of votes nationally in the senatorial elections, but it’s likely that Berlusconi may emerge with the greatest number of the 315 seats up for election today (though far short of a majority) — the latest projections show the centrodestra with 114 seats, the centrosinistra with 113 seats, the Five Star Movement with 57 and Monti’s coalition with 17.

Berlusconi wins Piedmont, sweeps southern Italy in senatorial elections

When you look at the results region-by-region, you begin to see just how amazing the comeback has been for Berlusconi.

Right now, it appears that Berlusconi’s coalition has not only won Piedmont and Veneto in northern Italy, but also Lombardy, Italy’s most-populous region, by what appears to be a whopping 38.0% to 29.5% victory.  That doesn’t bode well for the centrosinistra in regional elections in Lombardy, where the centrodestra is trying to hold onto power under its candidate for regional president, Roberto Maroni, since 2012 the national leader of the Lega Nord (Northern League).  Maroni faces a tough challenge from the leftist candidate, Umberto Ambrosoli.  Exit polls showed a very close regional race. 

In southern Italy, where the centrosinistra was hoping to break through with a credible chance at sweeping the south, Berlusconi’s coalition has apparently won each region, excepting Basilicata.  That includes Campania and Sicily, Italy’s third- and fourth-most populous regions, respectively.  Berlusconi leads 37.2% to 29.1% in Campania and by 33.2% to 27% in Sicily (where Grillo’s Five Star Movement, not typically strong in the south, won 29.5%).  It also includes Puglia, the home of twice-elected regional president Nichi Vendola, the leader of the socialist Sinistra Ecologia Libertà (SEL, Left Ecology Freedom) that is part of Bersani’s coalition.  Although SEL won nearly 7% in Puglia, its best result nationwide, it wasn’t enough to power the centrosinistra to victory, where it was trailing with 28.3% to the centrodestra‘s 34.5%.

Grillo is the biggest winner, Monti the biggest loser

All in all, the result is a victory for Grillo — his movement outpolled Berlusconi’s party (though not his broader coalition), the Popolo della Libertà (PdL, People of Freedom) and it’s still too soon to tell, but there’s a chance the Five Star Movement outpolled Bersani’s party, the Partito Democratico (PD, Democratic Party) as well.

Going down the list of senatorial results, it looks like the Five Star Movement outpolled both the PD and the PdL in Veneto in the northeast, Liguria in the northwest, Marche, Abruzzo and Molise in the center of Italy, and Sicily and Sardinia as well, with Grillo’s movement winning around 30% in some of his strongest regions.

Monti, by contrast, appears to have finished in fourth place — and a far-off fourth place — in every region.  Despite his alliance with the Christian Democrats — long-dominant in Italy’s south — Monti polled worst in Italy’s south, and did best (winning double digits of up to 12%) in the northern industrial regions like Piedmont, Lombardy, Friuli and Veneto.

That means that, even if they could find a way to build a coalition, Monti and Bersani are unlikely to have sufficient strength in Italy’s upper house to form a coalition.

Other winners and losers Continue reading Making sense of today’s Italian election results →

Calabria, Campania, Italy, Puglia, Sicily

The role of Italy’s south in this weekend’s election

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Although Lombardy in Italy’s north has been called the ‘Ohio’ of Italian politics — it’s a huge prize, given that it’s the most populous and richest region, and one of the few regions currently too close to call — Sicily might well be the ‘Florida’ of Italian politics.Italy Flag Icon

It’s the fourth-most populous region of Italy, after Lombardy, Lazio and Campania, and with 27 seats in the Senato (Senate), it’s quite a prize.  Like Lombardy, Sicily is essentially a toss-up in this weekend’s Italian general election.  Voting is underway today and will continue throughout Monday.

In addition to Sicily, the election remains close in three additional southern regions, in Campania (29 seats), Puglia (20 seats) and Calabria (10 seats) — polls, as of mid-February, showed the centrosinistra (center-left) coalition headed by Pier Luigi Bersani with a very narrow lead.  Taken together, the four regions boast 86 seats, representing more than half the seats Bersani will need to form a senatorial majority — a far larger prize than even Lombardy’s 49 seats.

Taken together, the four regions are Italy’s poorest, nearly one-half as wealthy as Lombardy, and plagued by widespread unemployment, even before the latest European financial crisis — the four regions receive funds from the European Regional Development Fund to stimulate economic growth and modernize their economies.  Since Italian unification in 1865, southern Italy never fully integrated into the rest of Italy, and governments for the past century have tried to develop plans to bring southern Italy’s economy up to a level more commensurate with northern and central Italy.

In addition to their economic and cultural gap with the rest of Italy, the regions are hampered by their links to organized crime — the Mafia / Cosa Nostra in Sicily, the Camorra in Campania, the ‘Ndrangheta in Calabria and, to a lesser degree, Sacra Corona Unita in Puglia. That, in turn, has led to greater amounts of political corruption, cresting in 1992 with the murders of anti-mafia magistrates Giovanni Falcone and Paolo Borsellino.

Despite the south’s central role in the election, there’s not much indication that any government would necessarily do much for the south, especially in an era of budget cuts.

All four regions typically favor the center-right in Italian politics — former prime minister Silvio Berlusconi’s centrodestra (center-right) coalition won all four regions in 2008 and even in the 2006 elections, when center-left prime minister Romano Prodi returned to power, his coalition lost both Sicily and Puglia.  Despite the strength of the autonomist Lega Nord (Northern League) in northern regions, such as Veneto and Lombardy, there’s not much of a counterpart in the mezzogiorno.  To the extent there’s a separate ‘southernist’ autonomist movement in the southern regions, it’s split among a group of shifting regional parties that routinely aligned with the centrodestra, and that continues to be the case in this election — a patchwork of southern parties, Grande Sud (Great South), has joined Berlusconi’s coalition, making them, oddly enough, electoral allies of the Northern League.

The winner in each region is important under Italy’s election rules — in each region, the party or coalition that wins the greatest number of votes is guaranteed 55% of the senatorial seats from that region.  So in a highly fragmented election like the 2013 elections, Bersani’s centrosinistra coalition could win 30% of the vote and still take 55% of the seats in a given region.

In the Italian parliament’s lower house, the winner of the national vote is guaranteed 54% of all seats, and polls show that Bersani is very likely to win the national vote.  In contrast, however, the regional rules for the upper house mean that he’s far from guaranteed a majority in the Senato, and so may be forced to form a government with prime minister Mario Monti’s pro-reform centrist coalition.

In this weekend’s election, however, the left has hope that if it can sweep Lombardy and the key southern regions, it will have a shot at winning a clear senatorial majority: Continue reading The role of Italy’s south in this weekend’s election →

Italy

Monte dei Paschi scandal gives shares of blame to Italian left, right and center

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Monte dei Paschi

Founded in 1472, it’s the oldest bank in the world, but the Bank of Monte dei Paschi di Siena has proven that it can still surprise the world, for better or worse.Italy Flag Icon

The news last month that Monte dei Paschi lost €730 million from dodgy financial products between 2007 and 2009 and, even worse, that the bank hid those losses were hidden from regulators, caught everyone off guard, including not only Italy’s politicians just weeks before its general election, but even Mario Draghi.  Currently the head of the European Central Bank, Draghi served as the head of Italy’s central bank at the time Monte dei Paschi incurred the losses, an embarrassing oversight for the man whose ‘do-whatever-it-takes’ mantra has kept the eurozone’s sovereign debt crisis at bay since summer 2012.

Monte dei Paschi is Italy’s third-largest bank, which posted revenue of over €4 billion in 2010 before posting losses of €4.7 billion in 2011 and, as of last September, €1.7 billion in losses for 2012, a figure that’s sure to rise.

After its listing on the Italian stock exchange in 1999, it began an aggressive phase of expansion, acquiring several local banks as well as Banco Antonveneta from the Spanish bank, Banco Santander — the hidden derivatives that Monte dei Paschi entered into in order to finance those expansions are at the heart of the current scandal.

The crisis has helped no one in the Italian election — there’s enough blowback from the scandal to implicate not only Draghi’s bank regulators, but to have hurt leaders of Italy’s left, right and center at a time when disillusion among the Italian political elite is running as high as ever. Continue reading Monte dei Paschi scandal gives shares of blame to Italian left, right and center →

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How the Italian election, Bersani’s to lose, became a Berlusconi-Monti dogfight

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There are now less than two weeks to go before Italians select a new prime minister, and if you watched the dueling soundbites, you would be forgiven if you thought the two main contenders were current prime minister Mario Monti and former prime minister Silvio Berlusconi.Italy Flag Icon

But while Berlusconi and Monti have taken up much of the headlines, the centrosinistra (center-left) coalition headed by Pier Luigi Bersani, the leader of Italy’s center-left Partito Democratico (PD, Democratic Party), still seems more likely than not to win the Feb. 24 and 25 parliamentary elections, guaranteeing a majority in the 630-member Camera dei Deputati (House of Deputies), the lower house of the  Parlamento Italiano (Italian Parliament) and a plurality of the seats among the 315 elected members of its upper house, the Senato (Senate).

As of last Friday — the last day under Italian law that new polls can be published in advance of the election — the broad centrosinistra coalition still held a single-digit, but steady, lead over the centrodestra coalition dominated by Berlusconi’s Popolo della Libertà (PdL, People of Freedom).  After consolidating the center-right, especially by gaining the support of the autonomist Lega Nord (Northern League), Berlusconi’s coalition has pulled to within a modest deficit with the centrosinistra, despite the fact that polls show his PdL with less than 20% support and the PD with consistently over 30%.

Meanwhile, the centrosinistra coalition has lost some support to both the centrist coalition headed by Monti, the outgoing technocratic prime minister, and the anti-austerity protest Movimento 5 Stelle (M5S, the Five Star Movement) of comedian Beppe Grillo was also gaining steam going into the final two weeks of the campaign.

So if the centrosinistra lead has been whittled down a bit, the race to govern Italy still seems like Bersani’s fight to lose.  It’s a much more fragile lead than it was when the campaign started, but in Italy, you’d expect the race to tighten, especially with Berlusconi’s full-court press — even in his weakened political state, Berlusconi remains one of Italy’s richest men, and he commands a significant amount of media control.

Since the start of the campaign, even with Bersani and his center-left allies campaigning hard, sparks have flown strongest not between Bersani and Berlusconi, but between Berlusconi and Monti.

Monti, in shifting from an above-the-fray technocrat to an off-with-the-gloves politician, has attacked Berlusconi as the ‘pied piper’ of Italian politics, mocked his ‘family values’ by referencing Berlusconi’s tawdry sex scandal-ridden past, and said that a victory for Berlusconi would be a ‘disaster’ for Italy.  Earlier this week, he attacked Berlusconi’s promise to abolish — and refund to taxpayers — an unpopular housing tax as a ruse to buy votes with money the Italian government doesn’t have.

Berlusconi, for his part, launched his campaign in December 2012 by accusing Monti of dragging Italy back into recession with ‘German-centric’ policies and, despite an odd offer before Christmas to step down in favor of a united Monti-led coalition, has hammered away at Monti’s efforts to appease European interests from Brussels to Berlin, efforts that Berlusconi claims have come at the cost of improving everyday life in Italy.

In the midst of the back-and-forth between il cavaliere and il professore, where exactly does that leave the centrosinistra? And how did Berlusconi and Monti, whose parties have arguably less support than either of Bersani’s PD or Grillo’s Five Star Movement, come to dominate the campaign?

Continue reading How the Italian election, Bersani’s to lose, became a Berlusconi-Monti dogfight →

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Monti resigns as prime minister in light of Berlusconi’s political return

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It’s been an incredibly fast-moving weekend for Italian politics — shortly after Silvio Berlusconi announced he would return to the leadership of his floundering Popolo della Libertà (PdL, People of Freedom) on Saturday, prime minister Mario Monti announced that he would resign as prime minister upon the completion of Italy’s 2013 budget, meaning that the next Italian election could come sooner than April 2013 as previously planned.

Monti’s resignation is not the incredible bombshell that it seems — it will still take some time to pass the 2013 budget, and the coalition that supports Monti, comprised of the PdL and the center-left Partito Democratico (PD, Democratic Party), seem likely to provide support for that budget.  Earlier today, after the Italian stock market dropped and Italian bond yields crept upwards to around 4.8%, Monti reassured global markets and Italians alike that he would continue to govern through the next election.  Monti was appointed prime minister in November 2011 after Berlusconi’s government found itself in the throes of a crisis of confidence over Italian fiscal policy with bond yields of over 7%, not to mention the corruption and sex scandal that had enveloped Berlusconi in his final years in office.

Monti has spent much of 2012 passing budget cuts, tax increases and market reforms through Italy’s parliament — Monti remains well-respected in Italy, although his austerity measures in particular have become increasingly unpopular.  As such, the upcoming Italian election was always going to determine the outcome of Monti’s reforms, and it will fall to the next government to consolidate and continue Monti’s reforms.  Indeed, Italy had already started turning toward election season, and although Monti is not running in his own right, he has indicated he could return to lead a second Monti government in the event, not unlikely, of a hung Italian parliament.

The PD, together with a handful of smaller leftist allies, selected just eight days ago the broad center-left’s candidate for prime minister, the PD’s current leader, Pier Luigi Bersani, in a race that saw much of Italy cheering on the youthful, energetic mayor of Florence, Matteo Renzi.  Although Bersani has emphasized the importance of stimulating economic growth and creating more jobs, he’s largely indicated he would continue Monti’s broad path of fiscal readjustment.

Earlier in November, a handful of business leaders formed a new coalition, Verso la Terza Repubblica (VTR, Toward the Third Republic), a centrist group that will run in the 2013 election for the express purpose of returning Monti to government.  Its leaders include Ferrari CEO, former Fiat CEO and former president of Confindustria (Italy’s employer’s federation), Luca Cordero di Montezemolo.  A handful of smaller parties are also contesting the election in their own right, ranging from autonomist parties in Italy’s north and Italy’s south, the remnants of Italy’s old Christian Democrats, and parties ranging from fervently communist to nearly neofascist.

So, at most, Monti’s imminent resignation will accelerate the Italian election to February.

In one sense, that’s good news for Berlusconi’s opponents — the less time that Berlusconi has, with his ample amount of money and media power, to attack Monti’s reforms and his leftist opponents, the less likely it is that Berlusconi can turn around polls that show the PdL in third place, behind the PD and behind blogger Beppe Grillo’s anti-austerity Movimento 5 Stelle (M5S, the Five Star Movement).

On the other hand, the PdL was set to contest regional elections on February 10 and 11 in Lombardia (in northern Italy and home to Italy’s financial and fashion capital, Milan) and in Lazio (in central Italy and the region surrounding Italy’s capital, Rome), and losses in those elections could have been even more embarrassing in advance of a later spring vote.  In Lombardia, Roberto Formigoni, who has served as regional president since 1995, announced the dissolution of the regional legislature after one of his PdL allies was arrested on the charge that he bought votes from the southern organized crime organization ‘Ndrangheta in the 2010 regional elections.  In Lazio, the PdL’s Renata Polverini resigned as regional president after just three years in office after being implicated in a public expenses scandal.

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Five reasons Berlusconi returned to run in the upcoming Italian election

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After leading a symbolic ‘walk-out’ among his center-right Popolo della Libertà (PdL, People of Freedom) from the Italian senate on Thursday in opposition to the austerity measures and other reforms of caretaker prime minister Mario Monti, Il Cavaliere himself, Silvio Berlusconi (pictured above), today announced that he will lead the PdL as its candidate for prime minister in the upcoming Italian general election against a broad center-left alliance anchored by the Partito Democratico (PD, Democratic Party).

So much for a ‘third republic’ in Italian politics — with the selection of the Italian left’s old-guard’s candidate, Pier Luigi Bersani, in the center-left’s broad primary earlier this month against Florence mayor Matteo Renzi (the latter remains Italy’s most popular politician), Italy remains, for now, stuck in the same-old politics as before.

Indeed, a Berlusconi-Bersani face-off would not have raised eyebrows a decade ago.

This time around, though, Berlusconi will face none of the political luck or goodwill that’s marked most of his career — he left office in November 2011 with Italian 10-year bond rates at an unsustainable 7% amid a growing financial crisis that threatened not only Italy, but the entire eurozone.  In addition, Berlusconi has little to show for his stint in office in the way of policy accomplishments, was convicted (subject to appeal) for tax evasion earlier this autumn, and he’s been shamed by accusations of sex with underage women at the now-famous and much derided ‘bunga bunga’ parties and using his influence for the benefit of at least one of those women, a Moroccan immigrant.

So his return to office in many ways would be met with not just disdain, but outright hostility, from outside investors and much of the European political establishment, including the leaders of the European Union, French president François Hollande and German chancellor Angela Merkel.

Berlusconi’s return has been met with chilly responses across the Italian political spectrum.  Monti, who is not contesting the election but has indicated he would be available to lead a second government in the event of a hung parliament, cautioned against populism and warned that Italy must avoid returning to a position whereby Italy’s finances threatened trigger the eurozone’s wider implosion.  Beppe Grillo, a blogger and social critic, as well as the leader of the populist and anti-austerity Movimento 5 Stelle (M5S, the Five Star Movement), savaged what he called Berlusconi’s ‘exhumation.’

Berlusconi’s one-time ally, Gianfranco Fini, who served as deputy prime minister, foreign minister and a former president of Italy’s lower house, the Chamber of Deputies (Camera die Deputati), and who is running under the newly-formed Futuro e Libertà per l’Italia (FLI, Future and Freedom), also sounded alarm, noting that the PdL decision exposes Italy to additional risks.

Given the long odds — the PdL stands far behind the center-left coalition in every poll conducted for next year’s election (and sometimes behind the Five Star Movement, too) — why would the 76-year-old Berlusconi make a bid for a fourth term as Italy’s prime minister?

Here are five reasons why he could be making the race.

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Bersani routs Renzi in ‘centrosinistra’ primary to lead Italian left next spring

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Florence’s brash, young mayor Matteo Renzi and his campaign to lead the Italian left threatened to remake Italian politics at a time of upheaval and uncertainty greater than at any point in the past two decades.

But the rank-and-file of the Italian left chose the more familiar path on Sunday, elevating instead the familiar, older and more staid, even boring, president of Italy’s largest center-left party, the Partito Democratico (PD, Democratic Party), Pier Luigi Bersani (pictured above, enjoying a post-election beer).

The 61-year-old Bersani easily defeated the 37-year-old Renzi with around 61.1% of the vote (with just 38.8% for Renzi) — a victory so complete for Bersani that Renzi was winning only in Tuscany, the central Italian region that’s home to Florence, and even there, only with about 55% of the vote.

For many reasons, I argued last week that Bersani’s victory was very likely: his control of the PD party machinery, Italian cultural values that respect longevity (i.e. can you think of anyone in the past 50 years that could be described as ‘Italy’s JFK’?), close ties to Italy’s largest union, the Confederazione Generale Italiana del Lavoro (CGIL, General Confederation of Labour) and support from the candidate who placed third in the first round of the primary election, Nichi Vendola.  Vendola is the openly-gay, two-term regional president of Puglia, a more leftist candidate who is the leader and founder of the Sinistra Ecologia Libertà (SEL, Left Ecology Freedom), which will join with a handful of other small leftist parties in supporting Bersani as a candidate for prime minister in Italy’s general election, scheduled to be held on or before April 2013.  Vendola memorably said, on the same day as his endorsement, that Bersani’s words were ‘profumare di sinistra‘ — perfumed with leftism.

Current technocratic prime minister Mario Monti is not running in the upcoming election.  Monti has shepherded labor reforms, budget cuts and tax increases through the Italian parliament since the PD joined with the main center-right party, the center-right Popolo della Libertà (PdL, People of Freedom) in November 2011 to appoint Monti in the midst of a public finance crisis that resulted in Berlusconi’s resignation.

So what happens next?

Continue reading Bersani routs Renzi in ‘centrosinistra’ primary to lead Italian left next spring →

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Bersani leads as Italian ‘centrosinistra’ primary heads to Sunday runoff

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After last weekend’s first round of the primaries to choose the Italian center-left (‘centrosinistra‘) candidate for prime minister in advance of expected national elections in April, the current leader of Italy’s largest center-left party, the Partito Democratico (PD, Democratic Party), Pier Luigi Bersani looks like a favorite — even if just slightly — to win the runoff this Sunday.

Bersani (pictured above) won 44.9% of last weekend’s primary vote of around 3 million Italian voters, while the youthful mayor of Florence, Matteo Renzi, placed a close second with 35.5%.  The two faced off in a television debate earlier Wednesday, although the two candidate disagree more on tactics and broad themes than individual policies.

The regional president of Puglia — Italy’s southeastern corner — Nichy Vendola, who is openly gay and the most leftist of the three candidates, as well as the founder and leader of the more radical Sinistra Ecologia Libertà (SEL, Left Ecology Freedom), placed third with 15.6% — the SEL and a handful of other small parties have agreed to unite behind the winner of the centrosinistra primary as the prime ministerial candidate of the broad Italian left.

So with the centrosinistra primary set to end with the December 2 runoff between Bersani and Renzi, it appears that Bersani will win, despite the momentum behind Renzi’s candidacy and his promise to bring a new generation of leadership to Italy.  Vendola, earlier today, endorsed Bersani after indicating earlier that Bersani’s words were more ‘profumare di sinistra‘ — perfumed with leftism — than Renzi’s.

The battle between Renzi and Bersani is less ideological than generational — at 61, Bersani personifies the boring and staid leadership of the past 20 years of the Italian left.  At age 37, however, Renzi is something quite new in Italian politics.  His campaign’s theme is essentially that Italy is in need of a new generation of leadership — namely, Renzi’s, on the basis that a Renzi premiership would open a new and more productive era in Italian governance.  He’s not only called for an end to the era of former prime minister Silvio Berlusconi, but for a clean sweep of the Italian left as well.  Renzi’s even picked a fight with Sergio Marchionne, the CEO of Italian carmaker Fiat.

Both Renzi and Bersani have pledged to continue the era of budget discipline enacted by Italy’s current ‘technocratic’ prime minister Mario Monti, who took office in December 2011.

Monti has consistently refused to run for prime minister in his own right in the upcoming elections.  Monti, however, has indicated that he would be available to serve as technocratic prime minister again in the event of a hung parliament, and business leaders overwhelmingly favor a second Monti government to see through the budget cuts, labor reforms and tax increases that have brought Italy back from the brink of financial crisis.

Both candidates, too, have pledged to pursue more growth-oriented policies, even though it remains unclear exactly what either candidate could actually accomplish in an era of austerity throughout much of Europe.

That doesn’t mean there aren’t ideological differences between the two.

Bersani, with greater ties to Italy’s largest union, the Confederazione Generale Italiana del Lavoro (CGIL, General Confederation of Labour), comes from a stronger social democratic tradition than Renzi, who has styled himself as a modernizer not unlike former UK prime minister Tony Blair.  Bersani, the son of a mechanic, served as regional president of the leftist region of Emilia-Romagna in central Italy in the 1990s and as minister of economic development under former prime minister Romano Prodi from 2006 to 2008, where he tried to liberalize the Italian labor market.

Renzi, however, has refused to consider a potential governing coalition with the Unione di Centro (UdC, Union of the Centre), a small centrist group led by Pier Ferdinando Casini.  The UdC essentially represents the remnants of the long-dominant Italian Christian Democrats and, while Casini and the UdC would likely find overlapping interests on economic policy, the UdC, with its ties to the Vatican, remains socially conservative (e.g., it opposes same-sex marriage).  Bersani, although he is seen as slightly more leftist than Renzi, has nonetheless remained open to a coalition with Casini’s centrists.

Ultimately, it’s hard for me to believe that Renzi will actually win on December 2.  The ‘primary’ itself seems skewed in Bersani’s favor — he’s already the leader of the PD, has the support of much of the ‘old guard’ of the Italian left (such as former prime minister and foreign minister Massimo D’Alema), and accordingly, he has access to the left’s strongest party machinery, not to mention the benefit of his CGIL ties.  He now apparently has Vendola’s support from the SEL as well.

Furthermore, in a country that shows perhaps more respect for its elders than anywhere else in Europe, it seems unlikely that Italy will anoint as a potential prime minister someone so incredibly young.  The contest is especially meaningful because the PD looks set to win the upcoming elections (although the contest remains exceptionally fluid and unpredictable, even by the sometime operatic standards of Italian politics).

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Bersani and Renzi offer two distinct personalities for Italy’s center-left

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Many have led Italy’s long-fractuous center-left over the past two decades, but none have succeeded in building a durable coalition that can win an election and govern for a whole parliament.

Achille Occhetto, the leader of the Partito Comunista Italiano, Italy’s then-Communist Party, failed miserably in the 1994 elections against Silvio Berlusconi.  Francesco Rutelli, the former mayor of Rome throughout much of the 1990s, led the center-left L’Ulivo ‘Olive Tree’ coalition to defeat in 2001, and his successor, Walter Veltroni led the newly-formed Partito Democratico (PD, Democratic Party) to defeat in 2008.  The only successful leftist has been the plodding Romano Prodi, who barely won the 1996 and 2006 elections, only to watch his coalitions, after both elections, crumble within a year or two.  And that’s not even counting the pretenders, such as Massimo D’Alema, who succeeded Prodi as prime minister from 1998 to 2000 and who served as foreign minister from 2006 to 2008.

With Berlusconi now (mostly) in the sidelines as the upcoming general election approaches, the Italian left is hoping to change that, and the first step will be November 25’s primary election to determine who will lead Italy’s broad left into the general elections, which will be held on or before April 13.  In addition to the PD, the more radical left Sinistra Ecologia Libertà (SEL, Left Ecology Freedom) of Puglia’s regional president Nicchi Vendola, the minor Partito Socialista Italiano (PSI, Italian Socialist Party), the centrist Alleanza per l’Italia (ApI, Alliance for Italy) launched by Rutelli in 2009 and the perennial anti-corruption party Italia dei Valori (IdV, Italy of Values) led by former prosecutor Antonio di Pietro.

The current PD leader, Pier Luigi Bersani (pictured above, top), follows in the long line of steady, if boring and uninspired center-left politicians in Italy.  He served as the regional president of the traditional leftist stronghold of Emilia-Romagna in central Italy from 1993 to 1996, as a minister in the Prodi and D’Alema cabinets in the late 1990s and most recently, as the minister of economic development in Prodi’s second government from 2006 to 2008.  As economic development minister, he worked to bring about reforms to liberalize Italy’s labor market and its economy.  But at age 61, Bersani nearly personifies the staid tradition of the Italian left, and he would likely be a prime minister in the Prodi tradition — solidly leftist, but more of the social democratic variety than the socialist.  He has the support of most of the center-left establishment, including that of D’Alema.

His main rival, however, is hoping to end that trend — Matteo Renzi (pictured above, bottom) is the 37-year old mayor of Florence, the largest city in the central region of Tuscany.  Renzi, who served as president of the province of Florence from 2004 to 2009 before his election as mayor, has called on all of the current politicians on the left and the right to step aside to make way for a new generation of leadership — presumably his.

Despite Renzi’s considerably more populist approach to the primaries and to Italian politics, evocative of times of the ‘third-way’ style of former UK prime minister Tony Blair, both Bersani and Renzi would posture more to the center in the general election.

In addition to Bersani and Renzi, Vendola, who was served as Puglia’s leftist — and openly gay — regional president since 2005, is also running, to the strident left of both Bersani and Renzi.  Bruno Tabacci of the ApI, a former regional president of Lombardy, and Laura Puppato of the PD, a regional councillor in Veneto, are also running.

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