May 31st, 2018 0- by Dr. Oliver Schmidtke, Centre for Global Studies, University of Victoria

The process of forming a government in Italy is very much in flux. Last week a coalition of the nationalist, right-wing Lega and the populist Five Star Movement (Movimento Cinque Stelle M5S) announced a new government under the little known law professor Giuseppe Conte. To the surprise of many observers, Italy’s President Sergio Mattarella rejected the nomination of the anti-euro economist Paolo Savona and suggested to install an interim government under Carlo Cottarelli, a former director at the International Monetary Fund, until new elections could be held. Today the Lega and the M5S declared that they have agreed to put forward a new nominee for the position of the Finance Minister in an attempt to end Italy's political deadlock.

There is a great degree of consensus among observers that Italy is facing a severe political crisis. Yet, it is unclear what kind of crisis we are talking about. Two different narratives shape public discourse: On the one hand, commentators have focused on the collision course with the European Union and the broader implications this development would have for the stability of the EU’s Economic and Monetary Union and the project of European integration more broadly in an atmosphere of rising nationalism. Indeed, both parties poised to form the new government have made Euroscepticism, if not outright rejection of the common European currency a cornerstone of their common agenda. From different ideological perspectives, the Lega and the M5S have both greatly benefitted from the frustration resulting from years of austerity measures and the ability to put the blame for this development squarely on the EU or Germany as the alleged mastermind behind imposing budgetary constraints.

On the other hand, some observers of the political crisis focus on the actions of the Italian President and his decision to block the proposed government by rejecting its nomination for Finance Minister. While it is a constitutional right of the President to intervene in the political process in this fashion and protect the interests of the country as a whole, Mattarella’s veto has widely been described as a veritable constitutional crisis. Politically even more significant, the Lega and the M5S could use this move to bolster their populist claim to speak for the disenfranchised and the ‘ordinary people’ frustrated with the political elite of the country. Not too surprisingly, Mattarella’s move was painted as a betrayal of the democratic-sovereign will of the Italian people. Di Maio, leader of the M5S, immediately launched a plea for an impeachment of the President. However, because of a lack of support from the Lega, has since backtracked from this demand.

Yet, it is also important to be aware, there is a third ‘crisis’ looming in Italy that stems from how Mattarella justified his decision to repeal the first proposal for a coalition government. Viola Carofalo, leader of the left-wing movement Potere al Popolo (Power to the People), commented in the Independent as follows: “The president’s decision has ensured that the racist and xenophobic sentiment continues to spread in Italy.” At first, such a proposition sounds counterintuitive: the President claimed that he stood up for the interests of the country and the defense of the economic-fiscal stability by refusing to appoint Paolo Savona as Finance Minster who holds deeply eurosceptic views and has called the euro a "German cage". Those defending Mattarella’s decision see him as the reassuring bulwark against irrational and potentially damming economic and financial policies.

To understand how Mattarella’s stand against the openly anti-euro position of the proposed minister could further feed the populist-nationalist anger, one needs to focus on how the President explained his move. He stated that the “uncertainty about our position in the euro has alarmed Italian and foreign investors who have invested in our bonds and companies.” Alluding to market risks, financial instability, and a possible violation of EU budgetary rules as well as establishing a government led by Cottarelli who is known for his pro-austerity policies is indeed likely to put more fuel into the festering flames of populist discontent. The Lega and M5S could easily depict this move as an infringement on the democratic power of the people. Inadvertently, President Mattarella might have strengthened the populist discourse that paints the simplistic picture of a confrontation between the old elites in Rome and Brussels on the one side and the virtuous Italian people suffering from their economic mismanagement on the other side.

In this respect, the current political calamity in Italy is primarily due to the lack of a credible alternative to populism and its claim that the lingering economic crisis should be addressed by an aggressive nationalism and by blaming immigrants as scapegoats. The established left in Italy has wholeheartedly supported Mattarella’s defense of the status quo and plea for a transitory technocratic government. The centre-left Democratic Party – as so many other social-democratic parties – have not put forth a vision of how growing poverty and social inequality can effectively be addressed. Similarly, the European Union has been frustratingly slow in promoting an idea of how a more socially responsible and inclusive Europe could be achieved. For instance, President Macron’s passionate pleas for a more deeply united EU and a new social-monetary policy have widely been ignored across the continent. Similarly, EU member states have proven unable to advance a common approach to governing refugees, an issue that has loomed large in the advance of populist parties in Italy. It is this political vacuum that populists have been able to fill with their vague promise to be the ‘voice of the people’. As such, this political crisis is not likely to disappear with a presidential veto.


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