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ITALY-POLITICS-PARTIES
What’s next for Italy as populists take over
ROME, June 1, 2018 (BSS/AFP) – Italy’s new coalition government due to be
sworn in Friday promises a mix of far-right, anti-establishment and
eurosceptic policies, raising questions about what the future holds for the
eurozone’s third largest economy.
As the League and Five Star Movement (M5S) prepare to take charge, here
are answers to five pressing questions.
– Could Italy leave the euro? –
Despite outspoken criticism of the European Union from both parties and
the presence in cabinet of arch eurosceptic Paolo Savona, the M5S-League
government programme does not call for a unilateral exit from the eurozone.
M5S has publicly abandoned the idea of a referendum on the euro, and while
the League signed the programme and therefore has committed to staying in the
single currency, in the past it has called the euro “a failed economic and
social experiment” but proposed reforms and an eventual coordinated exit
along with a number of other countries in the long term.
Recent polls suggest 60-70 percent of Italians oppose a pullout.
– How will markets respond? –
A tumultuous campaign, inconclusive election results, political deadlock
and fears of fresh elections put the markets in a spin.
The prospect of a M5S-League accord was initially met with some relief —
until the coalition revealed their government programme.
In reaction to the costly measures and eurosceptic tone, key financial
indicators pointed to decreasing investor confidence in Italy.
The spread or difference in yield between Italian and German 10-year
government bonds, exceeded 300 points at the start of the week, compared to
130 three weeks ago. However it had soared to nearly 600 points in 2011
helping push out Berlusconi.
– Long-term partnership? –
Both Luigi Di Maio of the Five Star Movement and League leader Matteo
Salvini insist they intend to stay the course for a full five-year mandate
and implement their programme.
But their parties only have a 32 vote majority in the Chamber of Deputies
and it is wafer thin in the Senate.
And they will have to keep a tight rein on their MPs — especially those
who view the new alliance with scepticism — to go the distance.
– Who is really in charge? –
M5S holds more clout in the new coalition having won almost 33 percent in
the March election, compared to the League’s 17 percent.
But Salvini is a rising star, who has seized pole in position and claims
to represent the 37 percent who voted for the right-wing coalition in which
he campaigned.
Meanwhile the shadow of M5S founder Beppe Grillo, an outspoken former
comedian, still looms large over Di Maio’s party.
A question mark also hangs over the fate of flamboyant former premier
Silvio Berlusconi. Part of the right-wing alliance with Salvini, Berlusconi
begrudgingly gave the green light for the League and M5s to make a deal
without his Forza Italia party.
But the ageing media tycoon disapproves of the new government programme.
After a recent court ruling overturned a ban on him holding public office, he
could once again be able to exert influence and has promised “reasonable and
critical opposition”.
– What can the president do? –
President Sergio Mattarella’s refusal to accept Savona as economy minister
forced the coalition to appoint a team that may offer greater reassurance to
Brussels.
Elected by a centre-left parliament, Mattarella has pointed out that not
only does he have the power to veto ministers but he can also reject any law
deemed financially non-viable.
He is also the guarantor of Italy’s international commitments and intends
to keep a close eye on any move to alter Italy’s role on the world stage,
especially given Salvini’s scathing comments on the EU and praise for Russian
President Vladimir Putin.
BSS/AFP/IJ/1310 hrs