Monday, February 25, 2013

Italian elections: Early projections point to Brussels’ and Berlin’s worst nightmare

Update 18:32: the projections for the Lower House are starting to come in and it'll be a close one. The first RAI projection has Bersani's centre-left coalition on 29.1%, Berlusconi's coalition on 28.6% and Beppe Grillo going even stronger than in the Senate, at 26.3%. Again, the Five Star Movement - the party that has toyed with pretty clear enti-euro rhetoric - is set to become Italy's largest single political party (don't say we didn't warn you). 18 to 24 year olds are allowed to vote in the Lower House elections, whilst 25 is the threshold for the Senate elections, which possibly explains the additional Grillo bounce.

Update 17.50: It's not looking any better. These elections now look like producing a hung senate (though much can still happen). This projection is from La Repubblica:


If this holds, none of the coalition arrangements discussed before the elections will achieve a majority in the Senate. Under this scenario, Berlusconi's centre-right coalition would win 123 seats, Bersani's centre-left coalition 104, Beppe Grillo's Five-Star Movement 58 and Mario Monti's pro-reform bloc only 16.

So there are basically three options: A national unity government (if Bersani, Berlusconi and Monti join forces - could be possible if leading to fresh elections soon afterwards), a sensational Bersani / Grillo coalition (unlikely) or re-run election within 2-3 months. If we have re-run elections, there will be a lot of pressure to change the electoral law beforehand to avoid a similar stalemate to that which could occur now. For that, of course, you need a majority in both houses...

As we've said repeatedly over the last year: this one will be very complicated and uncertain...

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The first projections are in. And the results are the stuff of nightmares if you sit in Brussels or Berlin.

Now, the thing to remember is that seats in the Senate are allocated on a regional basis so overall support nationwide doesn’t necessarily translate into a corresponding number of seats. But the projections so far show the following:
  • Monti – the darling in Berlin and Brussels – is taking an absolute hammering
  • Under the current projections, Berlusconi could prevent a centre-left majority and there could be a hung Senate.
  • Italians are coming out in droves to vote against austerity, with Beppe Grillo’s pro-euro referendum, sort-of-anti-euro Five Star Movement being the largest individual political party in half of the projections so far, and third with respect to Coalition arrangements (Grillo won’t join any coalition arrangements)

All eyes are now on the region of Lombardy, which, given the huge number of senators it provides, is likely to be crucial to the fate of these elections.

The vote count for the lower house trails the Senate count.

4 comments:

Rik said...

Lombardia was 50/50 on much lower projections for Berlusconi and the other comedian. So looks pretty certain who will have won there.

Looks like a majority 'Monti-government' can always be blocked. Especially if the bonusseats go BungaBunga.

Simply no workable majority unless Berlusconi makes a 180 and he will not do that. Things look so unstable that a new election within half a year or so seems likely. You will not want to go in there with breaking recently all your important promises even if you are Berlusconi.

Most likely scenario minority Monti-ish government. But will have insufficient backing to do things. Berlusconi playing Mr No.
Doubtful if Monti will be very enthousiastic to head such a government. As it is one on a sort of suicide mission. Don't see him doing that.
Which means minority left government blocked in everything. And most likely elections within 6 months or so.

All on basis of these polls and polls have been rubbish lately.

Rik said...

Have a look at a poll of a few days ago by peil.nl. About the rise of their third socalled populist party 50plus.

In the poll it appears that confidence in the economy in general and ones own future financial position basically drives people to the populist parties.

With the economy going sideways at best for at least 1 1/2-2 years, confidence is likley to fall further and likely the populist parties will rise further in the polls. Depending on alternatives (Germany has hardly any for instance; if it would be a first warning shot or a second (like in Holland, which probably will mean people actually voting for populist parties not only threatening (UK looks to be at 1 1/2(aka difficult to judge).

What looks clear that it is simply a trend all over Europe.
Holland with its voting system makes it only very transparent. Italy has Berlusconi somewhere in between the 2 (traditionals and populists). But with the Lega you are moving as well >1/3. Not that they would be able to make a majority government anywhere, but they make governing very difficult.

Lter90 said...

All the idealism of a much more unified Europe probably has to give way to some emergency firefighting.

Austerity in so many countries has brought about, unsurprisingly, the feared political backlash and instability.

Yet we know that the pressures of threatened default and internal devaluation were bringing much needed competitive improvements, and more power at the Europe-wide level will, if it follows previous trends, reduce internal barriers to trade.

Agreeing to a dual-currency for Europe in exchange for trade-enhancing powers (a concession by those who are against losing political control over local banks and economic rent-inducing local fifes in return for a competitive currency valuation) might be the best way to control the near political and economic future of Europe - not let it get out-of-hand like these Italian elections threaten to bring.

Yes, it will mean Germany, and those countries similar in their competitiveness, will suffer, but it was "screwed" no matter what. A mass and disorderly breakdown of the single currency would bring, as The Economist thinks, an European depression. The other alternative, a financial backstop requiring Germany to share in the guarantee, at a minimum, of a unified Eurozone banking system, deposit protection scheme, and rules and financing of insolvent banks is potentially very expensive and thus unacceptable to the German leaders.

The current situation of unprecedented 30% internal devaluation targets (unofficially recognized as what is needed) in the face of ever-declining growth and missed national deficit targets, massive unemployment, and now political uncertainty isn't going to work.

The single currency with such, still unsuitable, divergent economies is still the main problem. Better to try to manage its split than have a uncontrollable, chaotic, and politically venomous dissolution.

jon livesey said...

The way I usually put it is that EU countries would only join in arrangements that preserved enough of their national sovereignty that they were guaranteed not to work.

So that's what we get. A Europe with institutions that don't work because the participants won't let them - and it's a free World, so that's perfectly fine.

And now we get the second wave of the EU's dysfunction unfolding. The introduction of austerity in the attempt to make unworkable arrangements work leads to such social injustice - internal deflation harms labour but benefits capital - that it is eventually rejected at the polls.

So I come to the same conclusion as Lter90 above. It's time to recognize that the eurozone as presently constituted doesn't work as initially defined, and cannot be made to work. So find two or more groupings of EU nations where the economic divergence within the groups is much less than within the current euro-zone, and try that.

As Lter90 correctly says, the alternatives are a disorderly breakup of the euro, or growing social discontent with unpredictable outcomes.

We have to remember that the Thirties were not that long ago, but they are far enough back that no-one living has personal experience of the consequences of voting in populist demagogues - meaning that it could happen again.