This article is part of New Europe’s: Our World in 2016

Belgium- Brussels  : Italian Prime Minister Matteo Renzi seemed rather pleased during his end-of-year press conference. He described 2015 as “the year of reforms” and there were certainly some big ones like the controversial labour reform law. Called the job act, it scrapped the famous Article 18, and also pleased the EU institution. Under the new law, it will be easier for employers to lay off their workers. The Italian Confindustria was pushing for this and the PM was very concrete on the matter.

Other important reforms passed by Renzi’s government include the electoral reform and the education reform, which is called “la buona scuola” (the good school). 

Certainly, after a rather weak electoral showing in the regional elections, the Italian PM is now stronger and can look forward to 2016. Another reason to look forward to the New Year is a 0.8 percentage point increase of the Italian GDP.

In retrospect, Renzi was able to compact the rebels of the democratic minority and more importantly he was able to enlist a very important ally in the battle for survival. Denis Verdini and his new group called ALA are now fundamental for the government in the senate where the political majority is very tight. This clever former Forza Italia politician is considered by many to be the “king” of changing sides – and this in a parliament where hundreds of deputies have already changed their political parties.

For 2016, Verdini foresees even to double “his” parliamentarians. But his new role in the majority comes at a very high price for Renzi, who has already opened his doors to Angelini Alfano, former protégé of Silvio Berlusconi.

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The left voters cannot easily understand this policy of forming new and unexpected majorities, like the one put in place at the end December to elect three judges on the constitutional court. In this case, the Five Stars movement, together with the democrats, showed finally to be pragmatic after months and months of no result.

Meanwhile, the findings of one of the last electoral polls of the year, commissioned by the Italian TV La 7, showed that the democrats, the Five Star movement and a tripartite collaboration Forza Italia, Lega and Fratelli d’Italia could get almost the same number of votes.

An obligatory second round would be uncertain but even if he needed, we don’t think Renzi would be playing poker.

In any case, 2016 will still present some dangerous obstacles for the Italian prime minister. He will have to pass the parliamentary vote regarding the constitutional reforms which include the “elimination” of the senate. In addition, his government is also planning to hold a referendum on Constitutional reform law in October 2016. This will be a battle that he can’t afford to lose. Meanwhile, the pension reform, the ius soli law and especially the civil unions are also going to provoke some small, manageable tensions with the centrist of Angelino Alfano.

The second important goal for 2016 will be to win the administrative elections. In Milan, Renzi was able to find a strong candidate like the former CEO of Expo 2015 Giuseppe Sala. In Rome, however, after the crisis put in place by the former democratic mayor Ignazio Marino who was obliged to resign, the race seems desperate for the PD.

Losing Rome could be very dangerous for Renzi. It could create a domino effect with the extreme left, composed by former Dem and followers of Mr. Vendola, catalyzing votes from the PD and creating the “mother of all the defeats” like during the regional election in Liguria this year.

Meanwhile, Europe could also play an important role in this game. For instance, if Brussels supports and praises the reforms of one side over the other, the EU executive could create some problems for the stability law. This is why Renzi is calling for a change of mindset in Brussels and the contrasts between him and the permanent representative Stefano Sannino who was appointed only two years ago are a proof that the PM wants a less diplomatic approach in the Belgian capital. For the right opposition, the only way to win is to create a common and unitary project, guided this time by the Northern League of Matteo Salvini As regards the Five Stars movement, its leader Grillo just expelled another senator and showed that the movement is still not compact despite the good electoral polls. In the case of a second electoral round, the Five Star movement would win facing the democrats.

All in all, the second wave of reforms, the administrative elections and relations with Europe are the biggest challenges that the Italian government needs to address in order to arrive safe and sound to the end of the legislature in 2018.