Unravelling Italy's government crisis

The Renzi-Conte war confirms that Italian politics has become largely about personalities rather than parties or policies

After he became Italy’s youngest ever former prime minister when he had to leave office in December 2016 at just under 42 years old, having lost a referendum ignominiously, Matteo Renzi used to joke in his international lectures that he had never expected that post-Brexit Britain’s rapid changes of prime minister might make his own country look a paragon of stability. As he noted, Italy has had 66 governments in the 74 years since 1946, and then Britain suddenly went through three inside three years. He was probably proud that his own cabinet, from February 2014 to December 2016, was at 1,019 days one of the longest-lasting in post-war history. Yet that put him in only eighth place in terms of days spent in office as prime minister, for there lies the rub: while Italy has had 66 governments since 1946 it has only had 28 prime ministers. Government “crises” have generally consisted of just a reshuffle of familiar faces, with prime ministers returning to office within days or, more often, weeks. Early elections are rare.

On January 13th Renzi decided to restore Italy’s reputation as Europe’s instability champion by withdrawing his party’s three ministers from the governing coalition currently led by Giuseppe Conte with the apparent aim of either forcing a new government to be formed or early elections to be held. Yet when guessing what will happen next, those seven decades of practice need to be borne in mind.

Italy’s record is one of governmental instability but not political instability. The ministers may change, but not generally the parties nor the policies, except after elections, and political and constitutional resistance to holding elections outside the normal five-year parliamentary schedule is stiff. That we are in the middle of a pandemic makes that resistance even stiffer, but it would have been so at any time.

That is why the likeliest outcome from the crisis Renzi has caused is the formation after several weeks of haggling of government number 67 after another reshuffle of familiar faces, either as a coalition of the existing parties under a new prime minister or as a slightly adjusted coalition again under Conte. Italia Viva might even form part of either of those options. The least likely outcome is new elections. Only if the formation of a new government, say as a “government of national unity”, turns out to require a broader coalition in which the date of the next election becomes part of the negotiation should we expect the next election to be sooner than 2023.

Opinion polls suggest that few Italians either understand why Renzi has provoked this crisis or support him in having provoked it. Prime Minister Conte is far more popular than he is. Which may in fact explain what otherwise seems inexplicable: that Renzi is trying to bring down a government he himself was instrumental in creating as recently as August 2019. At that time Renzi was a member of the Partito Democratico, and he encouraged the PD to form a coalition with the anti-establishment but left-wing Cinque Stelle (Five Star), whose right-wing partner, Matteo Salvini’s Lega, had just withdrawn from government. Having brought the new government to being under the same, non-party prime minister (Conte) as had been in office in the Cinque Stelle-Lega coalition since 2018, Renzi then confirmed his maverick reputation by promptly quitting the PD and forming his own party, named Italia Viva (Long Live Italy), but staying in the government. Yet IV has faired poorly in opinion polls ever since, dropping to 2-3%, with its centrist voters being nibbled away by another new party (Azione) formed by another ex-PD politician, Carlo Calenda. As Conte has endured in office longer than expected, and has drawn praise for his steady handling of the pandemic and consistent, clear communication, speculation has grown that he might choose to form his own party, something Renzi might well want to avoid. He would like him out of the way.

That’s the personality stuff. Yes, there are also some supposed policy issues dividing Renzi and Conte, but they really ought to have been resolvable without resort to a crisis. In a somewhat general way, Renzi has been critical of the Conte government’s economic plans, and in particular its rather vague plan on how to use the €200 billion in grants and loans due to come Italy’s way from the EU’s Next Generation Fund, starting midway through this year. In quitting the government, however, what he stressed was less that EU money than the Conte government’s decision to rule out borrowing more from the European Stability Mechanism, the eurozone’s emergency fund. Since there is no current need to draw on the ESM because conventional government borrowing costs are anyway so low, this seems a bizarre issue to bring down the coalition over. Which may be a clue: Renzi may have stressed this issue so as to keep open the possibility of returning to the fold after some sort of symbolic compromise has been struck on this marginal point.

Most likely, this is all a show that will run on for a few weeks and then be resolved. Yet political suicides do happen so we cannot rule out other outcomes altogether. Winston Churchill once said that “the trouble with committing political suicide is that you live to regret it.” In full, the options are:

• Giuseppe Conte could re-form the coalition without Renzi by finding about 14 senators to replace the 18 Italia Viva senators on whom the current government has depended in the upper house to reach the required majority. These would have to come either from presently unattached senators or by tempting some to defect, perhaps from IV itself.

• Giuseppe Conte could re-form the coalition by reaching agreement with Renzi and allocating a new set of ministries to Italia Viva.

• The PD and Cinque Stelle, the two largest parties in the coalition, could find an alternative candidate as prime minister who they think would be acceptable to Renzi. This might be someone in PD such as Dario Franceschini, the respected culture minister, or it might be another outsider, perhaps someone chosen for their economic credentials: Carlo Cottarelli, a former IMF official, and Carlo Calenda, a former economic development minister under Renzi who as mentioned earlier now has his own party, might fit the bill.

• President Sergio Mattarella could seek his own outside figure, a so-called “technocrat”, to form a government of national unity to steer Italy out of the pandemic. The usual candidate cited for this role is Mario Draghi, former head of the European Central Bank, but Mr Cottarelli is another. The key question for such a government would be for how long political parties would allow it to stay in power. In January 2022 the Italian parliament is scheduled to elect a new president, either in succession to Mattarella or as a second term for him. Those parties doing well in opinion polls — which for now means the centre-right of Lega, Fratelli d’Italia and Forza Italia — would be likely to want a general election before that presidential choice has to be made rather than afterwards.

• If all the above options fail, parliament could be dissolved and there could be new elections. At those new elections, one-third of the seats in both houses of the parliament are due to be scrapped. So a lot of people stand to lose their jobs, whatever the result.

My bet, to repeat, is, first on a re-formed government with a new prime minister, with Renzi re-joining the coalition; second on a third Conte government. Again, Italy has governmental instability — and often, as now, governmental weakness — but not true political instability.