The drawn-out process of sitting a new government that has gripped Italy since voters first went to the polls in early March took an unexpected twist in the 24 hours that transpired between Sunday and Monday which saw Italian President Sergio Mattarella veto a controversial nomination for economy minister and name a former International Monetary Fund (IMF) executive as his own pick for prime minister has thrown the country into political chaos with Mattarella now having to face impeachment threats from an infuriated Eurosceptic political alliance that is still desperately trying to form a government.
Mattarella’s rejection of Paolo Savona – the firebrand anti-Eurozone populist championed by the anti-establishment 5-Star Movement and Lega (League) coalition – and his decision to tap a traditional technocrat, Carlo Cottarelli, as a stop-gap head of state set off a political firestorm and signalled that Italy’s pro-European Union politicians are ready to challenge the radical agenda of 5-Star’s leftist leader Luigi Di Maio and Lega’s far-right, ultra-nationalist party leader, Matteo Salvini.
Appearing cool and collected while he addressed the media, Mattarella announced late on May 27 that he would exercise his rarely-used veto power to block the 5-Star/Lega alliance from forming a government because the choice of Savona to the Quirinale, the Italian Presidential Palace, would carry massive financial risks for the country.
Though the role of an Italian president is largely ceremonial, the office does have certain key powers that grant the president the right to block the appointment of a cabinet member. The veto has only been used on three previous occasions since the end of the Second World War, most recently in 1994 when then-President Oscar Luigi Scalfaro blocked multiple attempts by former Prime Minister Silvio Berlusconi to appoint his personal lawyer, Cesare Previti, as justice minister.
In his announcement, Mattarella said Savona’s anti-European speeches had already triggered higher risk premiums on sovereign bonds and led to a decline on the global financial markets, and was severely damaging Italy’s already bruised reputation following months of fruitless public spats and horse-trading between the victorious, but rival, populist parties over who would lead the next government.
Savona is known for his outspoken hostility to austerity programmes and hardline criticism of the EU. In his latest book, Savona dubbed the single currency “a German cage” and state that “we (Italians) need to prepare a plan B to get out of the euro, if necessary … the other alternative is to end up like Greece.” Savona has been known to attack Italian officials (including Mattarella and European Central Bank President Mario Draghi) for taking Italy into the euro just over 18 years ago, which he claims has “halved Italians’ purchasing power”.
Immediately after Savona was announced as the man charged with guiding Italy’s economic policy in the new government, widespread panic spread from Rome to Brussels as fears mounted that the 5-Star/Lega coalition would be unable to deliver on Italy’s commitments to the European Union and its ability to rein in the country’s immense national debt, which is equal to 1.3 times its annual output.
In naming Cottarelli to head an interim administration, Mattarella has temporarily handed the government of Italy (Europe’s third-largest economy) over to an individual who is widely regarded as a steady hand by those in Rome and Brussels who feared the 5-Star/Lega alliance’s preference for an administration made up of radical outsiders would lead to Italy to make near-instantaneous moves to withdraw its membership from the Eurozone, NATO, and the EU.
Earning the nickname “Mr Scissors” while at the IMF, Cottarelli earned a reputation for making massive cuts to Italy’s notoriously bloated public spending – a characteristic that will not be well-received by either 5-Star or Lega, both of whom have promised to unleash a state-sponsored spending splurge that would radically increase Italy’s already massive debt.
Cottarelli’s time as prime minister is likely to be brief as a new round of elections aimed at ending the months-long political deadlock is expected once the traditional August holidays come to an end.
For the time being, Cottarelli faces the prospect of forming a caretaker government and quickly selecting a cabinet before confirming his position as prime minister and seeking unlikely approval from an openly hostile Italian Parliament that is dominated by 5-Star and Lega. Cottarelli confirmed on May 28 that fresh elections would be scheduled for the autumn if, as expected, his choices to serve in a new government that would begin their mandate in 2019 fails to win a confidence vote.
Cottarelli’s sudden road to the premiership came after a whirlwind of events on May 27-28 that saw Giuseppe Conte, the unknown political novice proposed by 5-Star and Lega, walk out of his weekend meeting with Mattarella having tendered his immediate resignation as prime minister after the two clashed over the appointment of Savona as finance minister.
“I asked for… an authoritative person from the parliamentary majority who is consistent with the government programme… who isn’t seen as a supporter of a line that could probably, or even inevitably, provoke Italy’s exit from the euro,” said Mattarella.
Conte reportedly refused to discuss an alternative to Savona and angrily surrendered his mandate to be prime minister, which he only held for six days.
German Chancellor Angela Merkel weighed in on Cottarelli’s appointment, saying the announcement was “hardly conducive to the markets” and hinted that Italy could be looking at a similar scenario that played out in Greece earlier this decade if Rome continues to derail itself by deviating from the EU’s track.
Asked whether she was concerned about the latest developments, Merkel said, “When there were elections in Greece and Alexis Tsipras (from the Eurosceptic, radical leftist SYRIZA party) was chosen as prime minister, there were many questions to be answered. The two of us spoke with each other the course of many, many nights, and, together, we achieved something. We will have to do the same with Italy since is a key member of the EU.”
Conte’s abrupt resignation and the appointment of Cottarelli provoked outrage from both 5-Star and Lega’s leaders with the former’s Di Maio claiming Mattarella had violated Italy’s democratic norms, despite having the constitutional authority to do so.
“We were a few steps away from forming a government, and we were stopped because in our cabinet there was a minister who criticised the EU…I want this institutional crisis to be taken to the parliament and the president tried,” and exasperated and emotional Di Maio told Italian national broadcaster RAI.
Di Maio claims Mattarella could be charged under Article 90 of the Italian Constitution that allows parliamentarians to vote on whether the president committed “high treason”. If a simple majority votes in favour of the resolution, the constitutional court decides if it will proceed with the impeachment process.
If new elections are held in the coming months, recent opinion polls indicate that the ultranationalist Lega party would most likely come out with the biggest gains. Currently sitting on a 22% approval rating, Lega has seen their national support increase from the 17% it won in the March poll as part of a right-wing coalition with Berlusconi’s Forza Italia.
5-Star’s support has remained relatively static since Italian voters first cast their ballots 12 weeks ago. The insurgent populist party became Italy’s largest single political faction as a result of the election, having garnered 33% of the votes cast. Since that time, however, 5-Star has not experienced the same uptick of support as their rivals-turned-coalition partners in Lega.
The recent days’ events have laid bare the simple fact that Italy is locked in a deeply divisive ideological donnybrook, one that could eventually turn into a vote of confidence for the EU project, itself, if the cooler heads in Rome fail present to the voting public a sensible way out of the current crisis. If they are left with no other option, the most likely scenario will see the Italian public double-down on their choice for fringe populist parties to lead the next government.