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Italy’s Perfect Political Storm

MILAN – In the aftermath of Italy’s recently concluded election, no one knows who can and will govern the country. In fact, the best solution looks like an orderly one-year interregnum – marked by a couple of important reforms – and then a new vote in the spring of 2014.

The first reform to be enacted is a big cut in the number and income of national and regional politicians and of top civilian and military bureaucrats, who in many cases are the best paid in the world. The savings would not be huge, but the moral significance would be, for the recent divided vote delivered a clear verdict on at least one issue: the public’s loathing for the country’s elites.

But can Italy afford another year without an effective government? The initial reaction by international observers and investors has been one of deep concern, with the interest-rate spread on Italian debt relative to German debt widening sharply. With no parliamentary majority possible, a weak caretaker government is inevitable.

The center-left Democratic Party (PD), the supposed clear winner just ten days ago, won the Chamber of Deputies (the lower house), but is the election’s main loser. The PD secured a comfortable lower-house majority only thanks to the huge premium provided by the current electoral law to the party, or coalition of parties, that gets the most votes, in this case the PD and the small Left Ecology Freedom (SEL) party. But the Senate is without a credible majority, rendering Italy ungovernable.

Former Prime Minister Silvio Berlusconi emerged as a half-winner, not as a political corpse, as many had forecast and much of the world had hoped. Fortunately, he has no chance of controlling the national government. But Mario Monti, the economist called to lead a technocratic government in the fall of 2011 and stave off a debt default, barely crossed the electoral threshold required to enter Parliament.

The only real nationwide winner, the Five Star Movement (Movimento 5 Stelle, or M5S) led by comedian-turned-politician Beppe Grillo, is a political phenomenon with no precedent in modern European electoral history. Grillo’s movement secured more than 25% of the lower-house vote in its first-ever national election, becoming the largest single party in the chamber (though the PD-SEL coalition is larger). And Grillo despises all of his party rivals: “Surrender, you are overwhelmed” was his battle cry.

The numbers speak clearly: a government could survive in the Senate only by pursuing an ad hoc strategy whereby the PD joined with Berlusconi’s People of Liberty party and/or the M5S. A PD alliance with Monti would not be enough.

So who will be Italy’s prime minister? PD leader Pier Luigi Bersani will likely get the first try at forming a government, if he so wishes. But he has little chance of succeeding.

The second big question concerns Grillo’s M5S, which is a typical grassroots effort – strong on protest, but weak (and weird) on proposals. Grillo, a show-business figure comparable to the late George Carlin in the United States, asked in 2009 to join the PD and was rejected. He already had a following, but only last year did his movement formally enter the political arena by taking part in 100 local elections. It won the city of Parma. Last autumn, it won Sicily.

Grillo’s movement wants to change the face of Italian politics. It distrusts Europe viscerally, and more than 50% of its members are former leftists, along with up to 15% who are former berluscones. They are both an asset for Italian democracy – because only something really disruptive can force real reform – and a clear liability.

The PD failed to win a clear victory for reasons both remote and recent. The PD is called center left, but it is more realistically described as left and center. When it was created 20 years ago, two-thirds of its members were former Communists (Bersani himself comes from this group) and one-third were former Christian Democrats. Now, of course, it contains many younger people who joined after those two old historical parties collapsed.

From its Communist ancestor, the PD inherited a deep-seated credo as “a party both of struggle and government.” That notion can work in opposition, but it never works in government: even in Italy, you cannot demonstrate in the streets against yourself.

In name of the old formula, Bersani allied himself with the SEL, reassuring the center with one hand, while trade union leader Susanna Camusso and SEL leader Nichi Vendola scared it with the other by demanding a new wealth tax. In an already overtaxed country (at least for the 60% of taxpayers who do not or cannot cheat), this was a huge political mistake.

Now the PD is blaming two forms of populism – Grillo’s and Berlusconi’s – for its fate. But, as the “party of struggle,” it has its own populism – and a dismal 20-year record on reform – to blame. For anyone who wonders how seven million Italians could still vote for Berlusconi – who survived by making impossible promises, and by being as clownishly effective as ever – this is the answer: most of them voted not for Berlusconi, but against the PD.

Meanwhile, Monti paid the price of imposing austerity while enacting little reform. Still, his liberal party – never a successful brand in Italy’s class-driven politics – made it into Parliament, and so into the game. This is an achievement.

Today, the key question concerns how long Grillo will allow this parliament to operate. He has already called for a new vote in six months. That may turn out to be a mistake: successes like his are never easy to replicate, not without having proved something first.

Read more from our "Italian Ice" Focal Point.