Italy’s bumpy road to government’s (fragile) stability

The Italian government has reached some resemblance of stability under Mario Draghi, who is currently enjoying a wide majority. This comes after a tumultuous period of instability and fierce political debacle. Starting from the landscape of 7 years ago, the article covers the main political events and makes the case for why stability in power is as unlikely as it is hard to maintain. Thus, the question arises: how long will Draghi last?

“Without Italy there is no Europe, but outside of Europe there is less Italy. There is no sovereignty in solitude”. With these words Mario Draghi took office in February 2021 as the new Italian prime minister. In the same speech, the prime minister emphasised that supporting his government meant “accepting the irreversibility of the choice of the euro currency and embracing the prospect of an increasingly integrated European Union.”

Mario Draghi received a large majority, one of the largest in the history of the Italian republic. His government was supported by several parties that just a few years before were staunchly Eurosceptic. To see how this unfolded, we should roll back of a couple of years.

Back to 2013, the popularity of European institutions was at a minimum. The Italian government had implemented a series of unpopular austerity measures, following pressures from the ECB and other European leaders to cut spending and reduce public debt.

In the general elections held of 2013, two major parties, the Northern League (centre-right coalition) and the 5-Star Movement (independent), gained consensus by campaigning for a national central bank and the abandonment of the euro currency. They did not win, however. The euro was safe.

Renzi’s rise and fall

The Europeanist left-wing coalition won the elections, but this did not mean political stability. The Democratic Party, the largest party of the left-wing coalition, was itself experiencing an internal power crisis and only a few months after the general elections, they were forced to run primary elections to designate a new leader.

The primaries resulted in a significant victory for  Matteo Renzi, a boy-scout turned mayor of Florence, who was popular for his eagerness to scrap rusty politicians like old cars, thus his nickname “the ripper”. Once leader of the Democratic Party, Renzi was keen to get rid of many of the party’s political leaders, including the prime minister itself.

It did not take long before party members of the Democratic Party decided to get rid of Mr. Letta as prime minister and replace him with the new elected leader. In hindsight,  this proved to be a good move. With Renzi as prime minister, the popularity of the Democratic Party surged and at the 2014 European elections, the left-wing party reached 40% of the votes.

However, remaining popular whilst in power is not easy, especially for politicians like Renzi who tend to promise more than it can be feasibly achieved in a 5-year mandate. Move forward two years and the support for the Democratic Party was already starting to decline, arguably caused by the bombastic tones of Matteo Renzi: in the 2016 run for mayoral elections, the left-wing party lost important cities, such as Turin and Rome.

Nonetheless, Renzi was ambitious and, as always, not short of big dreams; one of them was to speed up the legislative process. The Italian parliamentary system was composed by two chambers with equal powers; to remove some layers of bureaucracy, Renzi’s idea was to give one chamber slightly more power than the other.

This required amending the constitution and a national referendum was indicted. The prime minister was buoyant about the outcome of the vote. In a private meeting (perhaps not that private after all), Renzi revealed he was expecting to win with over 60% of the votes.

Unfortunately, overconfidence is one of the greatest sins for politicians. Renzi should have learnt from David Cameron, former prime minister of the UK, who had just unexpectedly lost the Brexit referendum just a few months earlier. Instead, Renzi made the same exact mistake and announced he would have resigned had he lost the referendum.

Opposition leaders focused their campaigns on Renzi’s thirst for power and his unceasing grandiloquence. The framing held by the opposition was that democracy was at risk and that Renzi was seeking to change the constitution to gain more power for himself. Many among the public opposed the amendments simply to get rid of Renzi and effectively the referendum became a vote of no confidence towards the government. Renzi had not understood how much his popularity had declined in the meantime: he lost with a whopping 60% and, keeping his word, resigned as prime minister a few months later.

Renzi’s defeat brings outsiders to rule Italy together

Experienced politicians know when it is time to drop a political stance and embrace a new one. Years removed from the austerity measures of the early 2010s, the anger towards European institutions had faded away. Both the League and the 5-Star Movement had enough pulse to abandon their Eurosceptic tones and envisaged new narratives ahead of the elections.

The 5-Star Movement promised to reduce the number of MPs and to implement a fiscal support programme for to the most destitute, while Salvini emphasised the need to reduce migration flows, which had increased significantly over the previous years and strategically rebranded his party as the “League” (formerly Northern League)

After such a catastrophic defeat for the ruling party in the referendum, it was easy to predict a victory for those at the opposition _­ Indeed, the Democratic Party did lose the general elections and the remaining votes were redirected towards the parties that opposed the constitutional referendum. However, the 5-Star Movement ended up receiving almost as many votes as the centre-right coalition (where the League became the largest party, mostly at the expense of Berlusconi’s Forza Italia). Neither  received enough votes for a government.

As noted already, hardly anyone could have been surprised by the poor outcome of Renzi’s Democratic Party. What was not expected, however, was the electoral collapse of Forza Italia, the party founded and led by former Italian prime minister Silvio Berlusconi. Forza Italia was the only party in the right-wing coalition which could have possibly formed an alliance with the Democratic Party. However, Berlusconi did not get enough votes and the left-wing plans to remain in power vanished in thin air.

As a result, a stalemate began as several parties tried unsuccessfully to reach agreements and form a majority. Since coalitions had been formed already before the elections, forming new political alliances (besides that between Berlusconi and the left) was not an easy task, after a heated political campaign.

At some point, the 5-Star Movement started seeking a partnership with the League but were adamant in not getting any support from Berlusconi’s party. The League was not willing to abandon its centre-right coalition and the deadlock continued.

Eventually, the president of the Italian Republic asked Carlo Cottarelli, a former IMF member and economist, to initiate negotiations with all parties to see whether a majority could have been formed under his leadership.

This spurred the 5-Star Movement and the League to accelerate their discussions and just a few hours after the announcement of Cottarelli, the two parties informed the president of the Republic they had reached an agreement.

A Charismatic Salvini marginalizes the Five Star Movement

After an institutional crisis that lasted 3 months a deal was reached. Giuseppe Conte, a law professor sympathising with the 5-Star Movement, was chosen as prime minister. The 5-Star Movement and the League prepared a contract to enlist the measures they intended to enact and the “Government of Change”, as they themselves called it, was born.

League’s leader, Matteo Salvini, whose political campaign relied entirely on immigration issues, became the Minister of the Interior. Even though several reforms from the 5-Star Movement programme had been implemented, Salvini was constantly on the news for his strikingly stringent approach to immigration, such as closing Italian ports to prevent international NGO ships from docking in Italy after rescuing people at sea.

Salvini remained on all the front pages for almost a year and his popularity surged at the expense of the 5-Star Movement. The European elections of 2019 gave a clear depiction of this. The League won the votes lost by the 5-Star movement, which went from 32% to 17% of the popular vote, while the League went 17% to 34%.

This meant that had national elections been held again, the right-wing coalition under the lead of the League would have had enough votes to form a government. Salvini had the numbers to be prime minister.

The results of the European elections complicated the relationship between the two parties in power. The 5-Star Movement realised Salvini was gaining popularity thanks to his exposure on immigration issues and, in turn, tried to implement a series of reforms from their programme, including the cancellation of the Turin-Lyon railway, a project supported by the League but heavily opposed by environmentalists.

The proposed cancellation of the Turin-Lyon project was the perfect excuse for Salvini, who had already a clear strategy in mind. Salvini complained the 5-Star Movement were opposing all proposals from the League and made it clear that unless things changed, their cooperation could not continue.

A few days later, still lamenting a lack of cooperation from the 5-Star Movement, the League announced a vote of no confidence against Conte. Salvini was hoping in either a government reshuffle (with the aim of getting more League’s ministers than the 5-Star Movement) or new national elections.

The vote of no confidence was however never voted, because the prime minister Giuseppe Conte decided to resign instead.

Renzi retaliates from the back seat, while the League subsides

Both Matteo Renzi and Matteo Salvini reached almost 40% of the popular vote in the European elections (that is in 2014 for Renzi and in 2019 for Salvini). Interestingly, neither of them managed to capitalise their gains at the national level.

The reason is quite simple. Opposition parties once again put their differences aside and united. In the same way the right-wing coalition and the 5-Star Movement combined their efforts against Renzi’s referendum, this time the left-wing parties and the 5-Star Movement cooperated to avoid national elections, which would have resulted in a right-wing government led by Salvini.

This outcome was totally unexpected. Indeed, who could have imagined the 5-Star Movement, so much opposed to all political parties just a few years ago, forming a government with both right and left?

Certainly not Salvini, who desperately tried to retrace his steps as soon as he realised that the alliance between the 5-Star Movement and the Democratic Party was a done deal. But it was too late. The leaders of the 5-Star Movement made it clear to Salvini that after his betrayal, another alliance with his party was out of question.

The architect of the partnership between the 5-Star Movement and the left was once again Matteo Renzi, who was no longer leader of the Democratic Party but nonetheless managed to convince Nicola Zingaretti, the newly elected party leader, to form a government with the 5-Star Movement.

Thus, in September 2019, a new government was sworn in with a mixed group of ministers from the Democratic Party and the 5-Star Movement. Conte was reappointed as prime minister for a second time.

Meanwhile, Renzi did not wait to move cards around: just a few weeks after the cabinet was formed, he announced the formation of a new left-wing party, named Italia Viva (Italy is alive). Two ministers, formerly in the Democratic Party, immediately switched to Renzi’s Italia Viva, thus generating new frictions within the left-wing coalition.

It can be argued that the newly formed government may not have lasted for long, had not been for Covid. As the pandemic spread, the government implemented the first national lockdown in Europe as well as several other draconian measures, such as school closures and massive fiscal support ahead of other neighbouring countries. This meant political stability, at least initially.

In May 2020, the discussions for the Next Generation EU plan commenced. Italy was promised to receive more than 170bln euros. This triggered a heated discussion between the ruling parties on how to allocate the funding. The day after an allocation proposal for the funding was approved, Matteo Renzi revoked his support for the government and announced a no confidence vote.

This time, Conte sensed he could have won the confidence vote and did not resign. The Prime Minister was not entirely wrong, as it turned out he still had a majority, however it  was so narrow that he had to resign anyways.  For a second time.

Will Draghi stabilize the government, at last?

Following the standard procedures, the President of the Italian Republic once again called all parties for private consultations. Rumours started to spread about a possible reshuffle under former ECB governor, Mario Draghi, which eventually brought the president to summon him in a similar fashion as for Cottarelli. However, Draghi did enjoy a much better response than Cottarelli. Once Draghi was officially named, all major parties (except one) did not wait to give their public endorsement.

Left-wing parties as well as Berlusconi’s Forza Italia were happy to support Draghi because of his firm Europeanist views. For the 5-Star Movement, there was practically no alternative but to embark on this alliance, given how low their popularity had dropped. Their hope was to avoid general elections and regain some of the lost consensus.

Draghi clearly had the numbers on his side. Thus Salvini, whose popularity declined whilst in the opposition, understood it was in his best interest to be part of the government team during Covid times and decided to endorse Draghi.

Both parties that had Eurosceptic views in 2013 ended up supporting Mario Draghi in 2021 and with him, a quick reminder, the “prospect of an increasingly integrated European Union”.  The same day this speech was made, Draghi’s cabinet obtained one of the third largest majority in the Italian parliament.

For now, the most telling mandate for Draghi is the allocation of the funds from the European programme. What will happen after that, or after Covid will be over, is less clear. Mario Draghi seems to be lacking charisma and it is hard to see him becoming a party leader without that. Nonetheless, given he will be responsible for the implementation of EU funding and other fiscal expansionary measures, it is unlikely he will become unpopular to the wide public.

All the major parties that support Draghi got represented by at least a minister. This pleases everyone but paves the way for instability. Although the current legislature ends in March 2023, the government team may not last that long. At some point, a reshuffle is likely to occur, given that parties with opposite views will struggle to collaborate till the end of the legislature.

Early signs of distress can already be seen by the fact that Giorgia Meloni’s Fratelli d’Italia (Brothers of Italy), historically the smallest party in the centre-right coalition, quickly overcame Salvini’s League in popularity thanks to its decision to remain the only party in the opposition. So far, this has spurred Berlusconi to suggest the creation of a unified centre-right party, but may lead Salvini to terminate his support for Draghi if his popularity will continue to decline in favour of Meloni’s party.