Italy worries Europe
Election stalemate leads to fears of instability hitting eurozone
The stalemate produced by the results of the election in Italy is creating fears that the country’s prolonged instability might hit the economies in the rest of eurozone.
In the wake of the unique situation produced – Pier Luigi Bersani’s centre-left bloc won the Lower House vote but failed to secure a majority in the Senate – the European Commission issued a strong warning that the new Italian government must honour its commitments.
As Italy’s money markets fell sharply and other European stock exchanges followed suit, Commission spokesman Olivier Bailly said the EU expected Italy to keep its promises on debt and deficit reduction and to implement other structural reforms.
“We clearly hear the message of concern expressed by the Italian citizens,” he told a press conference.
“However, the Commission has full confidence in Italian democracy and will work closely with the future government towards the re-launch of growth and job creation in Italy.”
Observers of the Italian political scene who spoke to The Times yesterday said, although at this stage nothing could be taken for granted, it was likely the Italians would once again go to the polls in the autumn.
Marco Zatterin, one of La Stampa’s chief correspondents in Brussels, said the most likely option was a short-lived coalition until new elections are held later this year.
“You can never underestimate the creativity of Italian politicians but at this stage I really think that Italy has to go to the polls once again,” he said.
“The reaction in Brussels to the Italian vote is very worrying as this instability can have a contagion affect on other weak economies such as Spain and Portugal. This will plunge the euro area into another recession and that will not be good news, not even for Malta,” he said.
According to Mr Zatterin, the worst mistake that can be done in this situation is a coalition between the centre-left and the centre-right.
“The Italians have clearly shown they don’t want any political dealings between Bersani and Silvio Berlusconi. This is why [comedian Beppe] Grillo’s party got so many votes. If this ‘grand coalition’ is formed, even if for a short time, Grillo will double his votes next time round,” he said.
Malta’s Ambassador to Rome, Carmel Inguanez, said: “It is clear that Italy will only solve this impasse with another election.
“Half the Italians, the 25 per cent who did not vote and the other 25 per cent who voted for Grillo, sent a message that they are fed up with the big parties of the centre-right and the centre-left.
“I think a new coalition government will only be possible until a new electoral law is in place. Then it is back to the polls,” Ambassador Inguanez said from his Rome office on the Lungotevere.
Although Mr Bersani’s centrosinistra officially won the largest number of votes, it is actually the biggest loser as until a few weeks before the election it was almost a certainty that Mr Bersani would become Prime Minister.
However, with Mr Berlusconi’s strong comeback, comedian Beppe Grillo’s extraordinary performance and Mario Monti’s thrashing, Italy has ended up in a more politically uncertain position than it was in before the polls.
“Italy’s economy is in dire straits and this will not help,” Mr Zattarin said.
“What we need is a strong government with clear targets, something which appears only possible with new elections,” he said.
Italy’s President Giorgio Napolitano will now start consultations with the parties to try to solve the impasse. If no government is formed, he will have to call another election.