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Salvini’s return? A regional vote in Italy risks further chaos in Rome

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Via CNBC

Lega political party leader Matteo Salvini takes part at a political meeting on December 12, 2019 in Reggio Calabria.

NurPhoto

The face of anti-immigration politics in Italy could be about to make a comeback amid an election in the northeast region of Emilia-Romagna.

Matteo Salvini, head of the right-leaning Lega party, left the Italian government abruptly in the summer of 2019 after clashing with his coalition partner – the Five Star Movement (M5S), a party supportive of more social benefits. Salvini decided to put forward a motion of no confidence on the then prime minister Giuseppe Conte. His move, dubbed by critics as an attempt to govern Italy alone, led M5S to join forces with Partito Democratico (PD) – a pro-European social democratic party, averting the need for a snap election and thus stopping Salvini from potentially forming a government.

However, with regional elections due later this month, analysts are wondering whether Salvini could return to government soon.

“The regional election in Emilia-Romagna on 26 January is by far the most important political event that could determine the shelf life of the government,” Wolfango Piccoli, co-president of the research firm Teneo, said in a note Friday.

The region of Emilia Romagna, which includes the emblematic city of Bologna, has traditionally supported left-leaning parties. However, polls suggest that the candidate for the anti-immigration Lega party could win the vote and give the party its ninth consecutive win in regional ballots since the last national election in 2018, according to Reuters.

“Salvini has been campaigning in the region since November, pledging to ‘liberate’ it from the left. A PD (Partito Democratico) defeat at the hands of Salvini’s Lega would strip the center-left party of its symbolic heartland, and likely trigger an internal confrontation,” Piccoli added.

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If the upcoming regional vote ends up seeing a victory for the Lega party, both the PD and the M5S would be under pressure – potentially leading their current government to an end.

“The (election) risks are significant because a loss could not only encourage the PD to leave its coalition with the M5S as it looks for a new identity, but it could also trigger an implosion of the M5S,” Erik Jones, professor of European Studies at Johns Hopkins University in Italy, told CNBC Monday.

“The M5S does not typically do well in regional elections and is currently polling only at about 8% in the region. But this region is also where M5S started, and where it first entered into local government. So, a devastating loss here will fuel ammunition for those who don’t like (Luigi) Di Maio (M5S’ leader) and who worry that the Movement has lost its way.”

Given the government’s divide in major political issues, I suppose the government may not… last beyond 2020.

Marc Wagner

senior economist at Commerzbank

Furthermore, a Lega victory in Emilia Romagna could resurface concerns about the Italian economy.

“The (regional) election will not bring back Salvini itself. But it will reveal the popularity of Salvini and the Lega, respectively,” Marc Wagner, senior economist at Commerzbank, told CNBC Monday via email.

Salvini’s Lega party is currently above all other political parties in nationwide polls, with 31% of support, followed by the PD with 19%.

“The risks coming with Salvini are clear-cut: with his strict anti-immigration policy, anti-austerity, anti-EU and pro-Russia stance there will be again stress with the EU. But Salvini will also be harmful for the Italian economy: his socialist policy of redistribution will not bring Italy’s economy forward and set it on a higher growth path,” Wagner from Commerzbank also said.

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Italy is the European country with the second highest public debt pile at around 130% of GDP (gross domestic product). On top of that, its economy is barely growing. According to the Italian statistics office, Istat, the economy grew at a pace of 0.1% in the third quarter of 2019 from the previous three-month period.

The regional vote is adding pressure to the M5S-PD coalition at a time when they are also discussing plans to change the constitution, in a way that it reduces the number of lawmakers. M5S has pushed for the change, arguing that there are too many parliamentarians and thus a drag on taxpayers’ money. However, some members of the coalition partner, PD, are against the reform.

“Given the government’s divide in major political issues, I suppose the government may not… last beyond 2020,” Wagner from Commerzbank also said.


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