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OSSERVATORIO N.6 | Jun OSSERVATORIO N.6 | Jun. 2019 Trend · Politics · Economics TREND POLITICS ECONOMICS European vote increases Inverted equilibria in the GDP returns to grow in first Lega’s weight changing the majority jeopardises the quarter but pace remains close scenarios for future majorities. Government and the PoR to zero. keeps open chances of an early vote. 1 This issue of Osservatorio was closed on June 3rd, 2019 . Next issue: July 4th, 2019 Cover photo: © CC BY-NC-SA 3.0 Presidenza del Consiglio dei Ministri EDITORIAL European elections: new equilibria, old instability The results of the European elections outline a clear reversal in the power rela- tions between the Lega and the Movimento 5 Stelle within the majority parties. The vast success of Matteo Salvini, who was also able to wear out the Movimen- to’s leverage in the Southern Regions, redefines the Government agenda rein- forcing the Lega’s priorities. The symmetrical dualism with Luigi Di Maio comes to a close and Di Maio’s fa- vourable numbers in the Cabinet will not be enough to slow down his ally’s surge. The stability of the Contract for Government will no longer depend on the balan- ce of the Government’s approved measures, but rather on the Movimento 5 Stel- le’s ability to follow a political line which can accommodate the Lega’s requests without being completely out of touch with its base. The one just described is a difficult compromise to strike, especially when con- sidering that conceding greater leeway to Salvini could result in losing more vo- ters. In fact, the scenario of a Government crisis is still very much on the table for the President of the Republic, who is worried that conflict within Palazzo Chigi will continue should the Lega’s pressure be non-negotiable for the other majo- rity party. The time frame for this scenario – which could see a centre-right coalition win- ning, based on the results of the Europen elections – is bound by the economic timeline: a general election would need to be held by the end of September for the budget act to be produced by a new Government in office. This step is key to manage the European Union’s apprehension regarding the stability of the Ita- lian public finances. The paradoxical result of the last elections clearly emerges from the role of Italy in Europe: the Lega, a predominant force at the national level, will not be part of the majority who will have the power to influence the appointments of the major political offices within the European institutions. Coming out of a mandate whe- re it held the presidency of the European Central Bank (ECB) and the European Parliament, Italy is now risking to stand on the sidelines if the Government fails to mitigate the internal sovereigntists pressures with the positions of Christian-de- mocrats, socialists and liberals. 3 INDEX TREND 5 What would have happened if on May 26th the country voted for the general elections? POLITICS 8 The Movimento 5 Stelle is going through a reform 9 The Government Lega-led “Phase 2” 10 The President of the Republic’s red lines for a Government crisis 11 The European implications of the Italian vote ECONOMICS 12 Matteo Salvini’s €30bn fiscal act 13 GDP slowing down, latest ISTAT estimates 14 Markets reaction and Europe’s possible stance INTERVIEW 15 Marco Zatterin: which future for the European Union? © CC BY-NC-SA 3.0 Presidenza del Consiglio dei Ministri © CC BY-NC-SA 3.0 Presidenza del Consiglio dei Ministri © CC BY-NC-SA 3.0 Presidenza del Consiglio dei Ministri OSSERVATORIO - Trend · Politics · Economics Trend What would have happened if on May 26th the country voted for the general elections? he European elections on the 26th May YouTrend tried to answer this question with si- drastically changed the power relations mulations based on four different scenarios Twithin the Italian political landscape. This and carried out for Cattaneo Zanetto & Co. It is not news; it is in fact a regular occurrence is important to note that these are simulations which has been happening consistently since and not an exact reflection of reality: even if 2013. A series of “electoral revolutions” sharing new elections were to take place in the next few one constant: voters always reward the political months, it goes without saying that there are force which best embodies the willingness to clear differences between a European vote and change the status quo. This happened in 2013 a national one. and 2018 with the Movimento 5 Stelle, in the 2014 European elections with Matteo Renzi’s These speculations are naturally destined to be- Partito Democratico and in 2019 with Salvini’s come obsolete, “overrun” by subsequent even- Lega. ts. More specifically, the distribution of public consensus could be affected by the European The distribution of public consensus emerging elections results in multiple ways: it could trig- from European elections carries substantial po- ger a “bandwagon effect” that brings more and litical consequences, irrespective of what the more votes to Matteo Salvini’s party or, on the future of the Government may be: even if the contrary, it could bring voters closer to its oppo- ECONOMICS majority carries on as is, the internal power re- sition. For the time being, it’s impossible to pre- lations are now vastly different, as it has been dict in which direction we are headed, but the chronicled in the past few days. Should there polls in the next few weeks will realistically pro- be new elections, what would the Parliament vide useful clues. composition look like if Italians distributed their votes among the various parties like they did on latest election? INTERVIEW 5 © CC-BY-NC-SA Presidenza del Consiglio dei Ministri OSSERVATORIO - Trend · Politics · Economics SCENARIO 1 - CENTRE-RIGHT COALITION The first scenario sees identical coalitions to the ones in effect in 2018. Results are clear-cut: a centre-right coalition formed by the Lega, Forza Italia and Fratelli d’Italia would win a majority just short of two thirds in the Chamber of Deputies (402 seats out of 618) and of exact- ly two thirds in the Senate (206 out of 309). 4 402 78 134 SCENARIO 2 - LEGA ONLY What would happen if the Lega decided to stand alone in the next elections? Our simula- tion portrays a state of affairs whereby the Lega would win 262 seats in the Chamber and 124 in the Senate: substantial numbers but still con- siderably short of what is needed for Matteo Salvini to win a majority. 4 70 116 262 166 6 OSSERVATORIO - Trend · Politics · Economics SCENARIO 3 - FDI+LEGA The most interesting result is possibly the one ari- sing from the third scenario, whereby we specula- ted about an “all-sovereignist” coalition between the Lega and Fratelli d’Italia. With a 40.8% share of the vote, this coalition would win the majority in both Houses (328 seats in the Chamber of Depu- ties and 162 in the Senate) without having to extend the coalition to Berlusconi nor the the Movimento 5 Stelle. 4 36 101 328 149 SCENARIO 4 - FI+CENTRE-LEFT COALITION If the scenario just described were to become a re- ality, we could speculate that the divorce between Silvio Berlusconi and his historical allies would lead to crucial consequences. It might even lead to the emergence of an “anti-sovereignist” and pro-Eu- ropean line-up formed by the centre-left but also Forza Italia itself. If the numbers were the same as the European elections, this line-up would still not have enough consensus to win against the soverei- gnist coalition, but it would prevent them from win- ning the absolute majority in Parliament. 86 293 235 4 6 7 OSSERVATORIO - Trend · Politics · Economics Politics © CC-BY-NC-SA Presidenza del Consiglio dei Ministri The Movimento 5 Stelle is going through a reform nalysis of the defe- in 2018; on the other hand, it is various strands coexisting wi- at”, “a showdown”: possibly even more important thin the party, whose synthesis these expressions, to identify an organisational is now key to avoid jeopardising “ “A commonly used by the media structure which can put an end the majority in Parliament as for the losing parties in the after- to the Movimento’s subordina- a result of the loss of consen- math of an election, seem to be tion to the Lega. sus in the European elections. now very apt for the Movimento A possible way forward is to 5 Stelle for the very first time. The Rather than a pure headcount, establish a top-down hierar- immediate effect of the Europe- the Movimento is looking for an chical structure where Luigi Di an elections is noticeable within identity that is pragmatic but Maio becomes the voice of the the Movimento led by Luigi Di does not err on the side of flexi- five stratified strands, which Maio and the future equilibria bility. In other words, it is looking can be, in theory, traced back of the Government will largely to define a clear red-line on the to Roberto Fico, Beppe Grillo, depend on the outcome of the themes and policies which need Alessandro Di Battista, Davide internal discussions that Movi- to be negotiated with the Lega, Casaleggio and Di Maio himself. mento’s leadership will have. with the ultimate aim of coun- The other option entails a more terbalancing its growing power drastic choice of allegiances, The current situation of the in the political arena instead of which oscillates between the Movimento is reminiscent of a battling only on communica- moderate “leftist” side close to difficult juncture experienced tion style, where Salvini showed Fico and the more radical and in the aftermath of the 2019 re- a considerable edge.
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