The Italian electorate went to the polls on Sunday in a general election which saw established parties suffer heavy setbacks. The largest party after the vote was the populist, Eurosceptic Five Star Movement with the League an anti-immigrant, nationalist Eurosceptic party (formed from the Northern League) coming second. The ruling left wing coalition, under Matteo Renzi, came third, the vote shares were 32.6%, 37% and 22.8% (the Five Star Party stood in its own right whilst the League was part of a right-wing coalition). Both of the leading parties/blocs have laid claim to have the right to form a government. The government of Matteo Renzi has resigned and Italy faces weeks of discussions aimed at finding a coalition administration. Whilst the Five Star Movement said before the vote that it was not interested in entering into a coalition, that position has now shifted.
The League is part of rightist alliance involving former PM Silvio Berlusconi’s Forca Italia, however, they would be a junior partner since the League garnered a larger share of the vote (17.4 to 14%), They are calling for what they style as a “centre-right” coalition – their views place them on the far right of Italian politics, but without the more moderate Forca Italia backing, they could not hope to form a government.
Italy is the fourth largest economy in the EU and currently has an unemployment level of 11.1% which is well above its long-term average of 9.43%. Youth unemployment (under 25) is running at 31.5% which makes it a hot political topic. Inflation is well below ECB target (2%) at just 0.6%.
Whilst both leading parties are Eurosceptic, developments in the UK will have tempered the desire to leave the EU or row back from the Euro. Both parties have some experience at the local level, but have never been in government before, so they and Italy will be charting unknown territory. At the moment, there is no suggestion that the League and the Five Star Movement would be prepared to join together in a coalition. The two parties have differing geographical heartlands with the League strong in northern Italy (where it had its roots as the Northern League) and Five Star enjoying more support in the south of the country.