Italy After the Vote: What Now?

The Italian voters have spoken—but what on earth did they say?

Two clear winners were anointed yesterday. First, Beppe Grillo, whose M5S placed first at 25% with the slogan “send them home,” retire all the old guard politicians and replace them with citizen-legislators. And second, Silvio Berlusconi, the oldest of the old guard, the embodiment of everything Grillo and his followers railed against. So having yoked together this improbable pair, can the Italian voters honestly expect the state to move forward in any direction whatsoever?

Well, the drover charged with that task for the moment is the technical ‘winner,’ Pier Luigi Bersani, whose center-left alliance won a razor-thin plurality and will thus, under Italy’s bizarre election system, have a working majority in the Camera and the chance to form a government. But with nothing close to a workable majority in the Senate—even with Monti’s handful of centrist senators Bersani comes up 20 votes short—how long will that government last?

Several implausible scenarios remain technically possible.

  • Berlusconi has already called for the ‘grand coalition’ (with Bersani and Monti) which would create a numerical majority. Neither Bersani nor Monti seems likely to disgrace himself with such a deal, but people (like me) who consider Berlusconi politically dead are repeatedly surprised when the zombie walks.
  • Alternatively, the PD could call for new elections. This was the first reaction of the Democratic Party’s deputy secretary Enrico Letta yesterday, but he was quickly walked back. In time there may be no other choice, but Italy seems likely to pay a steep price in borrowing costs–and angst–if it has to launch new elections.
  • Most intriguingly, a working relationship could develop between Bersani’s center-left and the Grillini in both houses to produce some of the reforms Italy so desperately needs. This was the immediate response yesterday of Bersani’s leftist partner, Nichi Vendola, who pointed to a long list of progressive proposals roughly shared by the two groups. Grillo himself this morning declared himself open to case-by-case consideration of reform bills emanating from Bersani’s putative government.

Could such a governing alliance between an old-school political party and this self-described ‘tsunami’ of anti-political populism actually function? The odds are against it, but the very possibility points to some fascinating ambiguities in Grillo’s movement.

One notable point is that Grillo’s long march had its base in left-populist challenges to the financial and business establishment, on behalf of dispossessed workers and farmers. More recently the M5S has opened itself to the right with anti-immigrant pronouncements and doubts about Italy’s remaining in the Eurozone. But it could be argued that Grillo’s base has anti-corporate leftist inclinations, is in fact a disenchanted remnant of Italy’s traditional Left, and would not be entirely out of place in an enlarged center-left coalition.

But that question raises a more fundamental one: who are the 160 or so new legislators M5S is sending to the new parliament, and what will they do when they get there? Fact 1: Beppe Grillo will not be one of them. Because he strongly insists that no one with a criminal record should sit in parliament, and because he himself carries a conviction for vehicular manslaughter, he has barred himself from serving. The folks who did find places on the M5S lists by way of a thinly participatory on-line ‘primary election’ are … unknown. Novices. Amateurs by design. This is new territory for a legislative body—even those Tea Partiers who flooded Washington in 2010 tended to have been locally active Republicans.

Of course the expected answer is, they’ll do what Grillo says. That’s been the norm for M5S, a one-man operation with one voice, one world-view, one trademark owned by that one person, no internal discussion, no platform committee, no process. When several local movement activists complained about the absence of internal debate last fall, they were promptly purged, i.e., legally enjoined from using the proprietary M5S logo.

This may seem odd coming from Grillo, who has identified himself with internet freedoms, the ‘copyleft’ commons idea, and the diffuse democracy of social media. M5S grew up as a network of local working groups, and has attracted the young people, elsewhere organized in Pirate Parties, who understand the on-line world to be a free preserve. Grillo’s meteoric rise has been linked to the ‘virtual piazza’ as a new forum for democratic expression. Will these self-recruited M5S legislators go to Rome in order to follow his top-down orders, or will they practice a form of horizontal democracy seen most recently in the Occupy movements, with which they share a visible affinity?

In short, M5S is riven by an enormous contradiction: on one hand, the authoritarian Grillo, whose famous blog is a personal platform and not a forum, and whose performances in actual piazzas are sometimes compared to Mussolini’s. On the other, his movement, which thrives in the ‘virtual piazza’ and may be inventing a highly decentralized, very new form of democracy powered by technologies that hardly existed five years ago. Can that New Italy somehow find terms of coexistence in Rome with the more tepid renewals proposed by the Bersani-Vendola coalition, while fully 30% of the voters still long for the archaic corruption and demagoguery of Berlusconi?

More than likely, this house of cards will collapse within weeks and Italians will be asked to vote once more. Who can guess what they will do then? Can the ECB and the Eurozone withstand this turbulence? The stakes are high. But I do think that the most durable effect of Sunday’s election may be the emergence of this new electronic post-partisan form of democratic participation embodied not in Beppe Grillo but in his hosts of anonymous followers.

24 thoughts on “Italy After the Vote: What Now?

  1. Pingback: Italy After the Vote: What Now? | Fifth Estate

  2. Although I sympathize with many points in Grillo’s “program”, I did not vote for him. Partly because of the lack of transparency in the movement, partly because I think he was a better comedian than he is a politician. Partly because some of the proposals or so far out there.

    Still, if I had to choose between the “old guard” and Grillo, I would probably choose him – as it is likely to happen soon anyway.

    I find myself in the position where I hope that Monti, Bersani, and Berlusconi will to form a Grand Coalition, and that the M5S will stay as far as possible from any post of responsibility.

    So the old parties are free to appease the market gods, inflict even more austerity, and destroy what is left of the country. In the meanwhile, the M5S and the other opposition forces will try to limit the damage and gather more support.

    In a year or so, the government will fall and a helicopter will rescue Monti, Bersani and Berlusconi from the Parliament rooftop.

    And then, if we are still going to have elections, the match will be between M5S and the fascists of CasaPound – hopefully M5S wins.

    If Grillo’s people associate in any way, however indirect, with any of the traditional parties, then it will be the end of them, and a very long, very dark tunnel for Italy and Europe.

  3. @Diego

    [disclosure: I voted for Vendola]

    And what if Bersani and Berlusconi don’t form a coalition?
    We get to new election and we get again 1/3 Bersani, 1/3 Grillo, 1/3 Berlusconi. And then?
    What exactly could Grillo do when the parliament is evacuated by elicopters and he gets his 98% of the vote that he couldn’t already do with an alliance with Bersani now?

  4. @Random Lurker

    I think the M5S people are too inexperienced to do anything other than stay in the opposition: they cannot take the pressure of real political responsibility, political plots, media exposure, corruption, and so on. Surely with too many enemies in RAI, Fininvest, and the other media.

    If they do stay in the opposition, they will have a chance to get some experience and present a more viable option at the new (soon to be announced, I suppose) elections. By then, the movement will be more adult and a whole lot less idealistic (if you can call that idealism).

    If they, instead, think they are ready to govern, the “government” will die of chaos, backstabbing and defections. Those who voted M5S because it is anti-system will turn to less respectable options (the fascists, for example), or will simply stay home at the ensuing elections.

    By the way: if Berlusconi, Bersani and Monti agree on a grand coalition, they are not going to want SEL in it. That is what Berlusconi means when he says that “everybody has to sacrifice something”.

    So SEL will (soon) be in the opposition as well – which is just as well. Italian politics need a coherent anti-austerity story to oppose the Troika’s puppets. And I think SEL can help create that story (probably more so than Grillo).

    Not that it matters, but I voted Di Pietro.

  5. The Italians did not heed the warnings of their minders, the Germans, who warned against voting for not only Berlusconi but any candidate that wouldn’t continue the austerity programs set forth by the troika. This morning, “Sniping from Brussels, according to La Repubblica, Olli Rehn said President Giorgio Napolitano should find a rapid solution to might enable Italy to continue fiscal consolidation, and reforms.” Ollie wants the austerity to continue against the will of the voters. Why does Ollie seek to over ride the wishes of the Italian voters? Why is he foolish enough to publically make these claims?

    Now we will see the markets, funded by the US Federal reserve and the ECB, attack the Italian debt and equities market in order to promote fear. This is not democracy but a form of fascism perpetrated by Germany, the troika and the US onto the Italian citizens. A form of brutal punishment for not bowing down to the global banking cartel, the troika and German hegemony.

    Italy must now take their fate away from the hands of Germany and the troika and print lire, devalue. Spain or Greece couldn’t do this because of the internal fundamentals but Italy can and should.

  6. p.s. I have not checked his numbers but Evans-Pritchard is confident that Italy can thrive with a new devalued lire
    It is also the one Club Med country with enough fundamental strengths to leave EMU and devalue, if it concludes that would be the least painful way to restore 35pc of lost competitiveness against Germany since the launch of the euro.

    It has low private debt and €9 trillion of private wealth. Its total debt level is 265pc of GDP, lower than in France, Holland, the UK, the US or Japan.

    Its budget is near primary balance, and so is its International Investment Position, in contrast to Spain and Portugal. It could in theory return to the lira without facing a funding crisis, and this may be the only way to avoid a crisis if the ECB withdraws support. Any attempt to force Italy to knuckle down risks backfiring disastrously for EMU creditors.
    http://www.telegraph.co.uk/finance/financialcrisis/9896222/ECB-bond-plan-in-jeopardy-as-Italys-voters-reject-conditions.html

  7. Pingback: Eurosphere roundup: Italy election results, still on the agenda… | Erkan's Field Diary

  8. Pingback: [BLOG] Some Wednesday links | A Bit More Detail

  9. @Random Lurker

    PS:

    >What exactly could Grillo do when the parliament is evacuated by elicopters and he gets his 98% of the vote that he couldn’t already do with an alliance with Bersani now?

    Leave the Euro, of course.

  10. The Italian voters have spoken—but what on earth did they say?

    They spoke quite clearly. Both Berlusconi and Grillo oppose the EU-imposed austerity policies that have been devastating southern Europe — and both of them have at least contemplated abandoning the euro and bringing back the lira.

    The message is clear. The EU is being rejected.

  11. @diego schiavon, infidel753, and Mark:
    In the event–not unlikely–that M5S consolidates its power through a new election (or helicopter evacuation of the Troika!), “leave the Euro” will be more of a question, but A) I don’t see that it is a major part of Grillo’s message or appeal–he after all called for a referendum, not an action, and B) I am persuaded, not being an economist, that the consequences would be dire enough that voters would shy away from it if actually called to vote. I confess that I can’t assess the technical points of Mark’s post, via Evans-Pritchard, though I thank you for alerting us to the argument.
    To infidel’s point, it is true that both Grillo and Berlosconi made anti-EU noises, but these were totally disingenuous in Berlo’s case and formless in Grillo’s. I don’t think “pull out of the Eurozone” is what either group of voters were ‘saying,’ and I still maintain that their appeals were TOTALLY and ABSOLUTELY contrary, turning on the central question of ‘keep the devil we know’ vs. ‘send in a whole new team.’ Close your eyes and try to imagine a Grillo-Berlusconi ‘Grand Coalition’ government: you see how totally incompatible these two sets of voters are …

    But thank you all for a lively discussion.

  12. @Brent Whelan

    Sigh. I suppose you are right.

    I have lived abroad the last 6 (in hindsight terrible) years, and have no clear picture of the situation in Italy, but it seems that the Italians have not lost the childish attachment to the Euro they have had since the end of the ’90s.

    Probably for the same reason Italians like expensive clothes, new cars and fancy furniture – they still want to feel “Europeans”, they want to feel accepted by the “superior” Germans, they want to “fit in”. No matter how much the economy is getting destroyed, the social fibre (never particolarly strong) torn apart, and the whole concept of a united, sovereign state thrown in the dustbin.

    They’d still rather stay in the Euro and slowly rot away than go back to the Lira (a horrible currency that actually supported two economic miracles, never created sovereign founding problems, and allowed Italy to rise from the lowest ranks in European GDP to parity with France). Sure, banknotes had lots of zeros back then.

    Then the best bet – the only one left, really – is renegotiating the conditions of our surrender with the enemy. Maybe more Germans will spend their holiday in Italy and a few more restaurant waiter will feel “European” for being able to serve them in broken English.

  13. @Infidel753

    “Both Berlusconi and Grillo oppose the EU-imposed austerity policies that have been devastating southern Europe”

    This is not true for Berlusconi, and possibly not even true for Grillo.
    “Austerity” is made by two parts: rising taxes and falling wages (“albor flexibility”). The core point of austerians like Monti is that we need “structural reforms” in the labour market and become more competitive, which means that we need falling wages.

    Bersani amd the center left don’t want falling wages, and thus need higher taxes.

    Berlusconi wants lower taxes, and thus wants more “flexibility” (lower wages). However, for some reason people think only of taxes as “austerity”, so Berlusconi can say that he is against austerity and will cut taxes, but will pay for it by lowering spending, that is a complete nonsense from a keynesian point of view.

    Even Grillo is ambiguous IMHO. For example, on Grillo’s blog (italian version only: http://www.beppegrillo.it/2013/02/gli_italiani_non_votano_mai_a_caso.html ) there is this article by a journalist that arguably is endorsed by Grillo:

    “Ogni mese lo Stato deve pagare 19 milioni di pensioni e 4 milioni di stipendi pubblici. Questo peso è insostenibile, è un dato di fatto, lo status quo è insostenibile, è possibile alimentarlo solo con nuove tasse e con nuovo debito pubblico, i cui interessi sono pagati anch’essi dalle tasse. E’ una macchina infernale che sta prosciugando le risorse del Paese. Va sostituita con un reddito di cittadinanza.”

    [Every month the State as to pay to 19 milions in pensions and 4 milions as public employees wages. This weight is unsustainable, it's a fact, status quo is unsustainable, it is possible to feed it only with new taxes or with new taxes and public debt, wich interest are also paid for with taxes. It's an infernal machine that is draining the resources of the Nation. It must be substituted with a citizienship income.]

    Note that Grillo endorses someone who wants to cut pensions and public employees wages (ah, those pesky schoolteachers!), which is also a form of austerity.
    Oh, and pensions for old people are unsustainable, however a “citizienship income” isn’t.

    It is probably true, however, that Grillo wants to be out of the Euro, and often loathes the “europe of the banks”.

    Also the whole article explains Grillo’s success as a generational war between the “have” (older people) and “have nots” younger people, with the clear subtext that older people are privileged for having things such as long term or unionized contracts etc.
    This kind of argumentation usually leads to very “neoliberal” choices, but in other articles Grillo is against privatizations etc., so he really seems very ambivalent to me.

  14. @Marc:
    I am still amazed when I see the underlying hatred in forums like this. As if Italy wasn’t asking for rescue but was forced to be backed up by some evil foreign force. And because the creditors wanna make sure that some of their savings will be paid back in the end they are f****** fascists and Nazis.

  15. @Dabool, not underlying hatred but hatred in the forefront though you miss my point. Somewhat complex but I’ll try to be brief.

    Yields on Italian, Greece and Spanish debt are down yoy though the economic fundamentals of those countries are worse. Austerity has caused growth to slow and jobs to vanish.

    Proir to the Italian elections many German officials offered veiled warnings that the Italians must stay on austerity path and maintain the status quo. When the Italians did not heed these warnings the globally connected financial markets funded at zero or near zero rates by Bernanke and the ECB punished the Italians by crashing their equity and debt markets. Why is it Germany’s or the global banking cartels business who the Italians elect? Italy is a republic with a democratically elected government. The actions of the global elites are not in support of democracy but of the global bankers who post-crisis, though these same banks blew up the world, have become more important than democracy itself. This is facism.

  16. @Marc:
    “Why is it Germany’s or the global banking cartels business who the Italians elect?”

    Italy spends more than it generates on income through taxes. As a result it has to ask creditors for credit. Creditors are unwilling because they are afraid Italy won’t pay them back. Italy then ask its European partners for help. Of course those want to make sure the money will be paid back, hence their interest in elections that decide on the sustainability of the future tax/spending ratio.

    Also, no need to blame foreigners for austerity. By helping to fund Italy’s financing needs, they actually bring about less austerity.

  17. @dabool,

    Please do not portray critics of the Euro as nazi-bashers. That is just a strawman.

    Italy does *not* spend more than it generates: it has been running primary surpluses for years. And that is part of the story: Italy would not need foreign credit if it decided to print its own currency.

    And yes, there is need to blame foreigners for austerity: by lending to Italy, instead of buying italian products, Germany (or any surplus Euro country) is financing the Italian trade deficit and adding to the problem. What it gets in exchange are credits that will never be paid back, because the export sector is getting destroyed in the process.

    Not only is austerity bad for Italian society: it does not even work. The public debt grew faster under austerity than under Berlusconi (who was carrying out “austerity light”).

    Those – like me – who claim that Italy has to a) either leave the Euro or b) force the Troika to renogotiate the Maastricht parameters, the ECB mandate, inflation target, fiscal compact, etc… are not doing that out of hatred for Germany: we do it because the system does not work and will have disastrous consequences for all involved.

    I happen to live in Holland (another surplus country) and it is also my tax money that is being wasted on loans to the Club Med countries. The current system is: a) cutting the public services I pay for with my taxes so that b) that money can be “lent” to the Southern countries. Far from helping the situation that money c) is used to pay interest on outstanding loans and buy products from the North, who are inescapably more competitive and d) it increases the Dutch and German trade surplus.

    Those “loans” perpetuate an inbalanced monetary system that is eating up whatever industry Southern Europe was able to develop in the past 60 years. After all the suffering imposed on the Italians (and on the Dutch, Germans, …), the South will be left with a desert, and the North with a lot of worthless paper.

    This has to stop. It has to stop now. Either Italy leaves (as the largest, richest, and financially soundest Southern country), or the rules of the game are changed to partly restructure, partly inflate away the debts, and to allow for expansionary measures in the North to counterbalance austerity in the South – remember that Germany and Holland can finance at basically zero interest, so they could spend a bit more.

    But stop the non-sense about “underlying hatred” and “fascists and Nazis”.

  18. A related song to the outcome of the elections in Italy – ‘Talking Beppe Grillo & The Five Stars Movement’ by Topical Songwriter Michel Montecrossa
    (song and music video on the website http://www.MichelMontecrossa.com )
    Michel Montecrossa says about ‘Talking Beppe Grillo & The Five Stars Movement’:
    “Beppe Grillo in Italy stands with his ‘Five Stars Movement – Movimento 5 Stelle’ for the people and a non-criminal banka & polito world.
    Beppe Grillo is not alone with this aspiration nor is Italy the only country demanding a new level of political and economic ethics. All countries in Europe and all people of the European Union want that. European politicians must become true statesmen at the service of the people, bankas must become real value bankers at the service of the people, rich speculators must develop a social conscience, must be ready to share with the people and to pay higher taxes. Banka-gangstas shall get jail instead of bail. The living, housing, food and energy costs for the people must be radically lowered so that European workers can adjust their wages to the global reality without losing their jobs and their civilised living standard.
    On this basis Europe’s working hand will stay competitive in the global economic scene and the well-being of the young will have top priority by giving free education and quality jobs instead of outsourcing. The securing of pensions and health-care then will equally have top priority to guaranty peace and human dignity.
    For all this and more I sing my New-Topical-Song ‘Talking Beppe Grillo & The Five Stars Movement’.”

  19. The economic question is clearly front and center but at this crucial juncture Italy needs a government that will prevent a slide toward extremism. It’s not as though there haven’t been a multitude of warning signs when it comes to extremist propensities in Italian politics an society.

    Any discussion about Italy has to unavoidably address the undertow of fascism in certain constituencies and sympathy for it in the general population. How many more times do we have to hear that dangerous clown Berlusconi extol the “merits” of Mussolini?

    How much proof is required that Italy is prone to xenophobic excesses and outright racism when in the past years we have had story after story about discriminatory laws and vigilantism in the form of so-called citizen patrols. Even food hasn’t been safe from the excesses of the xenophobes – the council in Lucca even banned any new ethnic food outlets from opening in a campaign dubbed “culinary ethnic cleansing.”

    The uncertain conditions the country is facing could end up empowering forces that could make a bad situation immeasurably worse.

  20. “The uncertain conditions the country is facing could end up empowering forces that could make a bad situation immeasurably worse.”

    If so, blame falls on the failed current status quo, not the citizens reaction to their failure.And didn;’t Germany have some issues around that same time?

  21. @ Diego, Marc: You should mind your tone than. “Fascism perpetrated by Germany”, “brutal punishment for not bowing down to the global banking cartel, the troika and German hegemony”, “renegotiating the conditions of our surrender with the enemy” is inappropriate language. IMHO this is the kind of language we are about to hear from the fascist movements to come.

    There is an inconsistency in your argument: You can not criticize surplus countries for lending to Italy and ask for less austerity in Italy. How is a bigger deficit to be funded with less credit?

    Besides, I agree with much of your analysis. The system is flawed. However, I do not see how “the rules of the game” could be changed. Germany will see wage growth in the years to come anyway, have higher inflation and probably experience unsound investments in real estate caused by interest rates being too low. Yes, a higher inflation target could help, but I suppose that’s a risky business and won’t happen.

    I do oppose the idea of a “fiscal compact” and debt-sharing though. This is the kind of experiment that failed in German reunification. Vast transfers could not avert that Eastern Germany became a desert to stay within your picture.

    Best, Dabool

  22. @dabool

    Believe me, I do not host anti-German feelings. “The enemy” we surrender to is surely not the German, or the Dutch, or the Finn – but banks and unelected officials in Brussels.

    Both the South and the North will get screwed in the end, and Germany will have a temporary kick of being world champion in exports – while of course it is just withholding money from domestic consumption and lending it to its customers, who will never be able to pay it back.

    Your remark about East Germany leads me to believe that you think that Germany should have never become a currency union, yes?

    > How is a bigger deficit to be funded with less credit?

    The printing press?
    Besides, how do you know the deficit would be bigger if the state spent more? According to the IMF, the fiscal multipliers were bigger than one, so it looks to me the time to spend.

    Also, it is not necessarily the Club Med who needs to spend its way out of the crisis – the Northerners are lending at near-zero interest rates. Why don’t they spend more? That is not charity: either they redeem their pieces of paper money for products and services now, or there will be no industrial base in the South left to produce anything five years from now, and those “credits” will be worthless. They do not need to “lend”, they need to spend.

    About inflation: it is not only the South who needs to inflate away its debt: the Dutch banking system is a mess, it is bankrupt, and it is basically in public hands already. We could use some inflation over here too, to stop the fall in house prices and increase wages.

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