Opinion & Analysis

The Italian Electoral Puzzle: What Government and what impact on EU dynamics?

Executive summary: The outcome of the upcoming Italian elections is far from certain and it will likely lead to a difficult government formation process. For this reason, these elections are followed with apprehension in Brussels, as they might lead to more political instability and/or a shift from the current status quo in Rome, depending on which coalition will take the power.

According to our exclusive VoteWatch study on the positions taken by Italian parties at the EU level, a grand coalition between Renzi’s Democratic Party (S&D) and  Berlusconi’s Forza Italia (EPP) would be the most stable configuration, also ensuring some sort of continuity with the current status quo. However, it is not clear whether these two parties will be able to form a majority.

Other options such as a right-wing coalition between Forza Italia (EPP) and Salvini’s Northern League (ENF) or a ‘populist’ alliance between the Northern League (ENF) and the 5 Star Movement (an internet-based party founded by comedian Beppe Grillo) would be less stable than a grand coalition (as shown by our research on their agreement rates when deciding at the EU level), but would also bring more discontinuity in the Italian positioning at the EU level. A potential coalition between 5 Star Movement and the Northern League is likely to pursue a more confrontational stance on Eurozone reform and strengthen ties between Rome and Moscow.

Perhaps, given the expected political fragmentation, even larger coalitions or repeat elections will be needed in order to put together a new government, meaning that Italy is likely to be further affected from the same contagious political instability that is now becoming the norm in most EU countries.

While the upcoming Italian elections are getting closer (4th March), the high level of uncertainty on the final outcome is hard to dispel. In fact, as things stand now, no political force is set to gather a majority of seats in the Italian Parliament. This means that Italy is heading towards a tricky coalition formation process, a feature that is becoming ever more common in nowadays European politics (Spain, the Netherlands, Germany and Czechia are among the most recent examples of lengthy and increasingly difficult government formation).

Even more importantly, the negotiations to form the next Italian government will take place while Macron and Merkel are expected to thrash out a proposed reform of the Eurozone governance. Therefore, the developments in Italy might generate further headaches in Brussels, as strengthening Italian populist forces vow to defy the EU budgetary stability rules and blame the euro for the economic misfortunes of the country. Policymakers all over Europe are following with apprehension the Italian electoral campaign, wondering what will come next.

In order to find out what the next Italian government might look like and how that can change the dynamics in EU politics, VoteWatch Europe dug into the voting records of Italian parties in the EU institutions.

In brief, the outcome suggests that a grand coalition between Renzi’s Democratic Party (S&D) and Berlusconi’s Forza Italia (EPP) would be the most stable configuration, being much more cohesive on key policies than the right-wing coalition between Forza Italia and the Northern League (ENF). Our research also shows how unstable a ‘populist’ alliance between the Northern League and the 5 Star Movement (EFDD) would be, as the views of 5 Star policymakers are actually closer to the positions of the far-left on most issues.

Forza Italia and Northern League: divided on almost everything

Political analysts are currently expecting a right-wing coalition made up of Berlusconi’s Forza Italia, the far-right Northern League and other smaller parties to win a plurality of seats in the Italian Parliament. However, there are serious concerns over the short-term survival of this alliance, given the frequent clashes between the two party leaders on key issues such as the relations with the EU and economic policy.

Indeed, the coalition between Salvini and Berlusconi is often described as a loveless marriage, stitched together for electoral purposes. Our data could not agree more with this latter statement: Forza Italia and the Northern League rarely agreed with each other in Strasbourg: Berlusconi’s party voted more frequently alongside the far-left (41%) than alongside its far-right coalition partner (36%).

When looking at the votes in the European Parliament, it is hard to find many convergence points between the two right-wing partners. Perhaps not surprisingly, Forza Italia and Northern League agreed the most on issues related to justice and home affairs, including migration policy, (49%), as well as employment and social affairs (46%). However, even when it comes to these two policy areas, Forza Italia EU Parliamentarians agreed more with the positions of Renzi’s party than the ones of the Northern League. For instance, Forza Italia’s MEPs supported, together with the Democratic Party, the controversial EU mechanism for the reallocation of refugees across the EU, whereas the Northern League members opposed it.

A potential right-wing government in Rome would pursue a more aggressive tone in Brussels than the current one. It would also be keen on strengthening ties between Italy and Russia, calling on the EU sanctions against Putin’s country to be scrapped. However, given the strong disagreements between Forza Italia and the Northern League on the Eurozone, but also on international trade and internal market regulation, this coalition would struggle to adopt a coherent position on EU affairs, potentially weakening its leverage at the EU level.

The positions of the Northern League seem to be very far away from the ones of the other Italian parties represented in the EP. The closest match for Salvini’s party is the 5 Star Movement,whose potential alliance with the Northern League is a scenario often mentioned in the Italian media. However, their voting records show a mixed picture, the two parties agreeing with one another 50% of the times. The two ‘populist’ parties were often on the same side during the discussions regarding the EU budget (63% of agreement) and  economic and monetary policy ( 68%). The two parties also saw eye-to-eye on international trade (60%). For instance, both the 5 Star Movement and the Northern League opposed the EU trade agreement with Canada (CETA), as well as the TTIP negotiations.

A ‘populist ‘ alliance would be the most nightmarish scenario for the European Commission, which has already plenty of other issues to worry about, from Brexit to the rule of law procedure against Poland. The 5 Star Movement and the Northern League are both very critical of the current policies of the European Union, as they share common protectionist views, as well as a strong opposition to the Eurozone budgetary rules. Their shared bid to repeal the latest reform of Italy’s pension law would definitely put Rome on a collision course with the European Commission, as well as Germany and other Eurozone partners. The 5 Star Movement and the Northern League also tend to be supportive of strengthening Italy’s relations with Russia and both parties vow to stop EU sanctions against Moscow.

However, they seem to have different views on how the EU should look like, the 5 Star Movement being supportive of strengthening transnational institutions such as the European Parliament. 5 Star MEPs also supported the introduction of a transnational lists for the EP elections. Therefore, despite their common criticism of the status quo at the EU level, the 5 Star Movement seems to have a stronger transnational orientation, whereas the Northern League holds outright nationalist views. Not to mention, the two partners hold different views on other policy areas, such as justice and home affairs (42% of agreement) and environmental policy (46%). For example, 5 Star EU Parliamentarians have been advocating for a greener energy policy at the EU level (i.e. higher renewable targets), whereas the Northern League is strongly conservative on environmental matters (see our dedicated report).

Is the Democratic Party gearing up for a grand-coalition? 

The leader of the Democratic Party (PD) is currently very keen on dismissing rumors over another grand-coalition with Berlusconi’s Forza Italia. However, the party has shifted to the center on economic issues under the leadership of Matteo Renzi, leading to a split in the party (with some of the former PD leaders joining a new left-wing movement) and the overall disaffection of several rank-and-file members.

Furthermore, despite the PD’s strategy to keep some distance from Berlusconi’s party, our data on the votes in the European Parliament shows that Forza Italia is indeed the best match for the Democratic Party on most issues (74%). The two potential coalition partners see eye to eye on most EU issues, such as economic affairs (75% of agreement rate), international trade (76%) and EU budget (89%). For instance, their MEPs expressed their support for the introduction of a budgetary capacity for the Eurozone, as well as continuation of TTIP negotiations.

A potential grand-coalition between the two moderate forces would mostly stick to the status quo with regards to EU affairs, being keener on cooperating with EU partners and institutions, rather than pursuing the path of stronger political confrontation.

Still, the EU Parliamentarians of the Democratic Party tend to agree more with the far left on justice and home affairs (76% of agreement rate), employment and social affairs (81%), as well as environmental policy (80%).

For instance, Democratic Party MEPs are keen on rejecting the placing on the markets of GMOs, whereas Forza Italia MEPs only oppose GMOs when the interests of Italian producers are at stake. The Democrats also support higher targets on renewables, energy efficiency and emission cuts, while Berlusconi’s EU Parliamentarians support a more gradual approach.

Disagreements on migration, social and environmental policy show that Renzi’s party would not be fully comfortable in governing with Berlusconi, in particular given the continuous conflicts between the different factions within the party.

5 Star Movement leans more towards the left than the right

Since the very beginning, the 5 Star Movement has promoted itself as a movement that transcends the usual left-right cleavage. The movement founded by comedian Beppe Grillo focuses on battles that draws a wide consensus from among the electorate: fighting corruption, increasing transparency of policymaking, rejecting austere economic policies, among other issues. Instead, the 5 Star Movement has kept a lower profile on more divisive issues such as the refugee crisis, as well as the relations with the EU. Its decision to join first Nigel Farage’s EFDD, then negotiate the accession to Verhofstadt’s ALDE only added to the confusion over this party’s stance on European affairs.

However, the votes in the European Parliament clearly shows that the 5 Star MEPs lean towards the left (as already reported in our previous analysis), their best match being the Italian electoral list named after Greek PM Alexis Tsipras (GUE-NGL) (74%). In particular, the 5 Star Movement holds strong leftists views on employment and social affairs (84% of agreement with Tsipras’ List),  environment (86%), justice and home affairs (77%), as well as international trade (72%). Both the 5 Star MEPs and the far left have supported the introduction of a EU relocation mechanism for refugees, higher investment in renewable energy sources. They also opposed CETA and TTIP negotiations.

Still, a coalition featuring the 5 Star Movement and the smaller left-wing party “Free and Equal” would fall way short of the seats needed to form a majority. A potential involvement of Democratic Party would be very tricky, in particular if Renzi stays on as the leader of the party.

A potential coalition between 5 Star Movement and other Italian left-leaning parties would further strengthen Italy’s aversion towards strict budgetary policies, free trade policies, potentially leading to a more confrontational stance in Brussels. However, it is still unclear how far this government would go in challenging the status quo given that, during the electoral campaign, the 5 Star Movement has been softening its most radical proposals, such as holding a referendum on the Italian membership in the Eurozone.

Ultimately, it will be up to the Italian citizens to either facilitate or hamper, with their votes, the establishment of certain political coalitions. So far, it seems that the coalitions featured in this article would struggle to gather a majority after the elections, meaning that even larger (i.e. less cohesive and more unstable) arrangements will have to be found.