New Year, New Italy?

Rome After Monti

Mario Monti at the Fiat car factory in Melfi. (Courtesy Reuters)

Just over a year ago, Silvio Berlusconi cut a forlorn figure as he caved under the mounting pressure to resign as Italy's prime minister, making way for the elegant professor and former Eurocrat Mario Monti. His foes in the Italian and international media had a field day: The Economist announced "Hallelujah: Berlusconi Resigns," and the Financial Times declared that "il Bunga Bunga festa é finita" ("the Bunga Bunga party is over"). A common view was that Berlusconi's last bow was the end of an era; few predicted his return to frontline politics within little more than a year. On December 8, however, Berlusconi marked his reentrance on the scene by withdrawing his party group's support for the incumbent government, forcing Monti's resignation and the holding of early elections in February 2013, and announcing he would stand once again as a candidate for the prime ministership. 

Berlusconi's latest theatrical gesture complicates the Italian political stage but is unlikely to be a game changer. Opinion polls give his Freedom Party (PDL) a little over 15 percent of the vote, a gain of less than two percent since Berlusconi's announcement and much less than half of its vote share (37 percent) in the 2008 election. The PDL could pick up votes between now and the election, especially if right-wing supporters of the Five Stars Movement, a loose group of populists under the leadership of the comedian Beppe Grillo, begin to worry about backing such a political novice. But Berlusconi is very unlikely to find himself in power for a fourth time.

So what is this comeback about? First, Berlusconi's own personal fortunes are heavily dependent on his maintaining a presence in the Italian parliament. Facing a number of criminal investigations, including one for alleged sexual exploitation of a minor, he needs to retain some political leverage to maximize his chances of overcoming his legal travails. By pulling the plug on the Monti government, Berlusconi was able to ensure that the general election will coincide with the regional elections in Lazio and Lombardy, distracting from his party's likely defeat in those polls. His move also ensured that the election would be held under the existing electoral law, which he designed himself in 2005 to minimize his losses in the face of likely defeat by Romano Prodi's center-left coalition. That law (the so-called porcellum, meaning "dirty trick") makes it extremely difficult for any party to form a majority in both chambers of the Italian parliament. That will improve the weakened PDL's standing in the new parliament and allow Berlusconi a chance to exercise some degree of veto power over the inevitably complex process of government formation that will follow the elections.

At the time of this writing, there are frantic maneuverings on the part of business and political figures close to Monti (notably Ferrari Chairman Luca Cordero di Montezemolo) to form some kind of coalition to sustain a new technocratic administration under the incumbent prime minister. Currently, opinion polls give a substantial lead to the center-left Democratic Party (PD), which is the favorite of about 36 percent of Italian voters. Grillo's Five Stars Movement is second place at around 18 percent. Such numbers give the PD a majority in the lower chamber of the Italian parliament (Italian law guarantees a majority to the most voted list) but could leave the party short of a majority in the powerful Italian senate, making the future government dependent on either the Christian Democrats of the small Union of the Center (UDC) or the radical Left, Ecology, Freedom (SEL) party, led by Apulia's governor, Nichi Vendola. 

Fears of the adverse financial and economic consequences of such an unstable arrangement have prompted Monti's supporters to organize a political movement to protect his leadership, exploiting the relative popularity of the current government and voters' low opinion of Italy's professional politicians. However, the drawback of this strategy is that Monti's allies are mostly technocrats and industrialists who lack the backing of a political machine and a well-defined electoral constituency. At the same time, Monti cannot stay outside politics if he wishes to hang on to the prime minister's job. For these reasons, Monti announced just before the New Year that he would not stand as a parliamentary candidate (as a life senator he will be present in parliament anyway), but would act as the prime ministerial candidate for a coalition of centrist parties including the UDC. This effectively changes Monti's role from that of impartial technocrat to professional politician, and is a high risk strategy, exposing him to harsh political attacks from the likes of Grillo and Berlusconi.

Monti's dilemma and Berlusconi's return signify a wider issue in Italian politics: the failure of conservative political forces to generate a credible political party able to align with the mainstream of the European center-right. The embarrassment with which Berlusconi was greeted at December's summit of the European People's Party in Brussels shows this clearly. Yet it is Berlusconi, not Monti, that has a solid, albeit eroded, support base amongst the middle class and small business owners, who form the backbone of mainstream conservative parties in other countries. Export-oriented manufacturers such as Ferrari's Montezemolo and central bankers such as Mario Draghi have so far failed to convince Italian center-right voters of the virtues of free markets, austerity, and transparency. Berlusconi may not win the election, but he can ensure that they lose it.

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