Italy's Soft Crisis

For the past few weeks a political crisis has been brewing in Italy with the potential to shock European politics; if it were not corrected, it’s consequences would have been far-reaching. But, last week, this conflict was resolved. How did this crisis come about, how was it resolved, and why was it so important?

On March 4th of this year Italian voters went to the polls and soundly rejected establishment parties, instead turning to two populist, anti-establishment, and to varying degrees Eurosceptic parties: the League and the Five Star Movement. When the votes were counted the the Five Star Movement was the single largest party in the Italian parliament, with 32.7% of the vote. The previously ruling Democratic Party received its worst results ever, taking 18.7% of the vote, becoming the second largest party though only slightly above the League’s 17.4% (with voter turnout at 73%, this represented a broad expression of the desires of Italian voters). However, the League’s results made them the largest party in the Italian center-right coalition, which led to their becoming the leader of that coalition. This electoral coalition received a combined total of 37% of the votes, placing them in a commanding position within the Italian parliament.

After some jockeying over who ought to lead the new government, the League and the Five Star Movement entered into talks attempting to craft a parliamentary alliance that would give a potential coalition a clear majority within the legislature. With negotiations taking over 80 days (a post-war record in Italy), an agreement was reached on joint government.

This proposed government was presented to the President of Italy Sergio Mattarella to receive his mandate to begin governing. Here, however, problems arose. The man originally tapped for the position of finance minister of the new League-Five Star government, Paolo Savona, is fiercely Eurosceptic and has gone so far as to suggest that it would be in Italy’s best interests to pull out of the single currency and return to the Lira.

Savona’s nomination, along with the general Euroscepticism and populism of the Italian government, spooked the markets, and credit agencies. These credit agencies then began to apply pressure on the Italian president, already wary of the populist coalition, threatening to review and possibly downgrade Italy’s credit status, which would severely threaten the value of Italian government bonds. In response to this pressure Mattarella vetoed the appointment of Savona to the position of Finance Minister, though approving all other ministerial appointments. In response to this, the newly appointed Prime Minister, Giuseppe Conte (an independent academic approved by both Five Star and the League) resigned due to his inability to form a government.

Conte’s resignation started off a chain of events which brought Italy to the brink of a political crisis. President Mattarella brought in Carlo Cottarelli, an Italian economist and former head of the International Monetary Fund, and requested that he form a “caretaker government” made up of technocrats to run the government until new elections could be arranged. The leaders of the League and Five Star fumed, accusing Mattarella of selling the country out to Brussels and financial interests against the will of the people, with Luigi Di Maio, the leader of the Five Star Movement, asking “what’s the point of going to vote if governments are decided by the credit agencies and financial lobbies?”

While both parties agreed to hold new elections later in the summer, no other parties did. Additionally, elements within both parties called for the impeachment of Mattarella. It was feared by many members of the establishment parties that new elections would deliver an even stronger mandate to the League and Five Star, as both parties could now point to a specific instances of establishment, pro-EU forces attempting to block them from the reigns of power. Because of this fear Mattarella remained open to negotiations with Five Star and the League, and on June 1st accepted a slightly shuffled set of ministers, with Giovanni Tria becoming the new Finance Minister approved by the President and the problematic Savona moved to the position of Minister of European Affairs. With these changes made President Mattarella gave the proposed government his endorsement and Giuseppe Conte returned to Rome to take up the mantle of Prime Minister.

The program of the new joint Five Star-League government is somewhat eclectic, mixing elements from the traditional right and left, often with a populist spin. It includes a strong environmental agenda, declaring “man and the environment are two sides of the same coin,” echoing Pope Francis’ 2015 encyclical Laudato Si’. The program also includes an increase in unemployment benefits paired with job training and policies to protect small businesses and attempt to reverse Italy’s plummeting birth rate.. The new government also takes a hard line on the European Union, seeking to distance Rome from Brussels and Berlin.

Much of this opposition to the European project comes from a desire for tighter border controls and the ability to repatriate migrants, as well as a desire to free Italy from the financial restrictions placed upon the nation by the EU. The leaders of both the League and the Five Star Movement also seek to emphasize Italy’s Catholic identity, with both emphasizing their own personal Catholicism. This platform will potentially see Italy aligning with Poland, Austria, and Hungary in efforts to distance themselves from the EU and chart their own course. To quote Italian journalist Alessandra Bochi, “The Five Star–League program combines euroskepticism, environmentalism, strong borders, protection of families and small businesses against globalization, and respect for religion. It combines elements of left and right in a way that scandalizes well catechized political elites. If it succeeds, it will be the first real sign that we are moving beyond the postwar order.”


*A more in-depth English language analysis of the League-Five Star government’s program can be found here.