Italian Politics: An Unprecedented Political Crisis
It may sound like the perfect plot for an intriguing film, full of twists and turns, but, it happens to be what has really transpired in Italian politics over the last several days.
It took months of continuous negotiations among all parties before a coalition between Five-Star-Movement and the League took shape. After that, it took them weeks to agree on a common political program and to designate potential candidates for Prime Minister and the cabinet ministers. However, all efforts proved to be futile on Sunday, when Italian President Sergio Mattarella refused the nomination of 81-year-old economist Paolo Savona as Finance Minister and Prime Minister designate Giuseppe Conte promptly abandoned his efforts to form a government. Economist Paolo Savona, who has served as Minister of Industry, Commerce and Craftsmanship under the government of Prime Minister Carlo Azeglio Ciampi from April 1993 to April 1994, is known for his Euroscepticism and critical attitude towards the single currency, as well as for having projected a plan B for Italy to exit the Eurozone.
In a public speech, Mattarella stressed the support he has always given to the coalition’s efforts to form a government: after two months of negotiations before a coalition took shape, he said, “I waited for the time the coalition requested to reach a common program and let it be approved by the representatives of each party. (...) I agreed on the Prime Minister they designated overcoming any reservation linked to the fact that a political government would be led by a Prime Minister who had not been elected in the parliament (...). No one could, therefore, claim that I have hindered the formation of a government (...). I had made clear to both the two parties’ representatives and the Prime Minister designate that I would have paid special attention to the choices related to some ministres and I received no objections. I agreed on all designated ministries but the finance minister”. Mattarella defended his decision by explaining that he had “asked for an authoritative political figure to be appointed to that ministry (...) who was not seen as the supporter of an approach that could provoke Italy’s exit from the Euro”. He further explained his veto pointing out how “the uncertainty over our position within the Euro has alarmed Italian and foreign investors who have invested in securities and companies,” and that “the increase in bond market spreads last week is a sign of growing unease and a lack of confidence in Italy, would reduce the opportunity for social spending, and posed a risk to Italians”. The move is not unprecedented. Previous Presidents had already rejected designated Ministers three times in the past, but an agreement on a different name had been reached in all cases and, most notably, the reason for the veto had never been Euroscepticism.
The President’s move exposed a deep divide between Mattarella and the two parties. Five-Star-Movement leader Luigi Di Maio called for Mattarella to be impeached. And some people spoke out on social media and took to the streets to respond to his decision. Some people supported the Italian President based on his right to reject ministers appointed by the Prime Minister under article 92 of the Italian Constitution. Others criticized Mattarella accusing him of undermining Italy's popular will and claiming that his veto reflects the hegemony of European elites, most notably German.
The international press widely covered the issue. The Economist pointed out how Italy’s governamental crisis “has now become a constitutional crisis, with implications for the entire European Union", while the BBC, among others, expressed concern over the way financial markets are reacting.
On Monday, U.S. President Donald Trump’s former advisor Steve Bannon talked to a small audience in Rome. While he was expecting to celebrate the newborn government and thus the success of populist parties in Italy, he ended up expressing his indignation for Mattarella’s veto of the Finance Minister which had been made public the day before. He stated that “It’s disgusting but it shows you if you need any other evidence of how anti-democratic it is, when they sit there and in their media talk about oh, this is fascism, oh, this is going to take us back to the 1930s, this is anti-democratic (...). Look at how they roll. Foreign powers, foreign capital, foreign media took from the Italian people its sovereignty.”
In an article in the British daily newspaper The Guardian, eurosceptic economist and former Greek minister of Finance Yanis Varoufakis minimized the alleged risks of Savona serving as Finance Minister pointing out that “No prudent finance minister would neglect to develop a plan for euro exit. (...) Indeed, I have it on good authority that the German finance ministry, the European Central Bank and every major bank and corporation have plans in place for the possible exit from the eurozone of Italy, even of Germany”. He also interestingly states that “Sergio Mattarella’ s defence of the status quo has ensured the success of racist and populist policies”, enabling Salvini to present himself at the next elections “not as the misanthropic, divisive populist that he is, but as the defender of democracy against the Deep Establishment”.
Newly appointed Prime Minister Carlo Cottarelli meeting President Sergio Mattarella Source: La Repubblica
On Tuesday, Mattarella met with economist Carlo Cottarelli, a former International Monetary Fund official who also served as Commissario straordinario per la Revisione della spesa pubblica under the Government of Enrico Letta in 2013 tasked with cutting public spending. Mattarella appointed Cottarelli as Prime Minister with the aim to form a technocratic, caretaker government before new elections will be held, probably in September. He announced that he will submit a new list of ministers to the Parliament by Friday for their approval. In the meantime, both Five-Star-Movement’s Luigi di Maio and League’s Matteo Salvini seem to have calmed down and are asking Mattarella for a new chance to form a political government based on the assumption that their coalition still has a majority in the parliament.
