Monday, January 07, 2013

Monti's candidacy set to make Italy's election season a rollercoaster ride

Last month, the Economist used the Oscar-winning exhortation, "Run, Mario, run" to urge Mario Monti to "come out fighting" in the Italian general elections. Detto, fatto. Monti has put his boxing gloves on and entered the ring. On Friday, he unveiled the logo for his new list (probably not the most exciting one, as you can see from the picture).

However, in what is a high stakes game for Italy's future, Monti's candidacy may ultimately turn out to be more divisive than initially thought - particularly since Italian voters do not seem particularly receptive to his reformist message. 

Democratic Party leader Pier Luigi Bersani had initially claimed he was willing to broadly continue with the reforms initiated by Monti's government, and be "open and generous" towards other centrist, pro-reform forces. However, Monti has now become the leader of those centrist forces - and a rival in the race for Italian Prime Minister. As a result, the Democratic Party is now focusing its efforts in stressing the differences, rather than the similarities, with the 'Monti agenda' - and is strengthening its ties with the smaller left-wing SEL party, which wants a "radical change" in the economic policies implemented by Monti's technocratic government

It is hard to see such a coalition making significant progress in opening up Italy's labour market - something which should top the agenda of the next Italian government, if the economy is to do more than simply run to stand still.

As we have mentioned before, Italy's complicated electoral law is going to play a key role in determining the final outcome of the elections. The rules for the lower chamber of the Italian parliament basically establish that the winner takes it all - and guarantee a solid majority of seats for the party/coalition which gets the most votes. Monti and his centrist bloc are currently polling at 14-15% - well behind the centre-left coalition (on 38-39%) and even the centre-right coalition between Silvio Berlusconi's PdL party and Lega Nord (on 26-28%). Therefore, Monti's clout in the Camera dei Deputati is likely to be marginal. 

However, there are different rules for the Italian Senate - the upper chamber. Italy's electoral law establishes that seats in the Senate are assigned on a region-by-region basis. More specifically, the party/coalition which gets the most votes in a specific region automatically wins 55% of the seats up for grabs in that region. This means that, even with almost 40% of votes nationwide, the centre-left coalition led by Bersani could have a majority in the lower house but fail to secure a majority in the Italian Senate.

And this is where Monti could still potentially have some decisive influence - he knows he might end up being the kingmaker in the Italian Senate (which has equal powers to the lower house). Monti has effectively ruled out working with a government with which he does not agree "on at least 98% of policies", but this could yet prove to be a pre-negotiation tactic designed to entice the Democratic Party to the centre ground.

To sum up, the arithmetic of the polls and Italy's complex electoral rules mean that the outcome of Monti's jump into the fray remains far from certain. His candidacy has injected some much-needed economic reality into Italian political debate - which has in turn increasingly made him a focal point of opposition from both the left and right. Yet, he might still wield influence in the formation of the next government.

1 comment:

Rik said...

Main problem imho is that the Italian system is not really equipped for this kind of thing.
-It is not a referendum on austerity or not. There are several other important issues playing.
-He will never get a majority by himself. The party he alligned himself with is very nonpopulist and centre, but there are several other parties around and votes will never swing that much.
-At the end of the day still a coalition has to be made. With likely a lot of seats 'ungovernemental' (including Berlusconi, you simply cannot rely on him for longer term support he changes views roughly evey single day). Basically too far left or populist. And both on the left and on the right.

Mix bag. Good he faces the music but the system is not properly equipped for it and it will likely end up in a far from optimal solution. Monti getting 15% or so.
That is next to the usual problems (similar as we have seen in Holland a few months ago). A big part simply never getting in any government and the rest being forced more or less to cooperate.
Ungovernable parties one day might get a majority somewhere as well, they are pretty close to that now. Would be interesting to see what will happen then.