Italy: A Coup for Stability

Published on February 12, 2014

Elected with roaring enthusiasm by the center-left PD (Democratic Party) base, Matteo Renzi has always repeated the mantra that he would want to become Prime Minister of Italy only as a consequence of an electoral victory, and not of a so-called Machiavellian power move against the less popular sitting PD Prime Minster, Enrico Letta. When it was first hinted to us that Renzi could succeed Letta without a snap election, we were therefore honestly taken aback.

*** However – and confirmation comes from within the party – Renzi will, as of tomorrow, Thursday, be well on his way to becoming Italy’s new Prime Minister. He will first try to convince Letta to step down, by promising him a high level post in Brussels – we’ve been told Commissioner for Competition, but also perhaps something less fancy, such as Employment – and an interim position in his new government. If a deal is not reached, Renzi could confront Letta in a face-to-face during the party’s congress tomorrow, and eventually could even go ahead and withdraw confidence from the current government. ***

*** The horizon of a Renzi government could be 2015-2016, namely the time that it takes to do the so-called reforms – including the Senate quasi-abolition that is high on Renzi’s agenda. If Renzi sees he has no chance to go further with reforms, he will just pass the electoral law and then force an election call – even if this could clash with the custom of not holding elections during Italy’s semester presidency. Either way the switch, or if forced “coup,” will lead to a stronger parliament and period of more stability for Italian politics, albeit the long political knives will by no means be all suddenly put back in their sheaths. ***

Imminent Showdown

Although his preference is clearly to stay on as Prime Minister, from what we have heard from the Letta camp, he has in fact privately shown some interest in certain positions in Brussels for some time already, and his relationship with the European establishment is excellent. To maximize leverage, however, and flush Renzi out in public, even if he knows the battle is lost, Letta could try to stay in power and raise the stakes by forcing the Parliament to issue him a no-confidence vote if his own party does not pull the rug out from under him at tomorrow’s meeting.

A transition tomorrow was in fact not even the favored game plan for Renzi himself, who would like to avoid an outright war within the PD that could damage his chances in future elections. But we have been told that Renzi’s sudden willingness to take over the reins now rather than wait for elections has been driven to a large extent by pressure, or as some would more colorfully call it, “blackmail,” from the Parliament’s small parties, who have been┬ádithering enough on the all-important electoral law to pull Renzi into the fray.

Small parties did not want the electoral law passed for fear that – once obtained – Renzi would have forced his way to earlier elections, and condemned them to irrelevance. The electoral law reform as currently proposed is designed to raise the hurdle of power as well as being – in its original design – connected with a constitutional Senate reform, in effect clearing the path of some of the more obstructionist structure of current Italian political system. We have been told that alternatively, if forced by events (namely, lack of consensus on the constitutional reforms), a Renzi government could just end up approving the electoral law and then call for elections without going through the more complicated constitutional reform of the Senate.

So Renzi has come to understand that either he would have to pull the trigger now, or face the possibility of continued dithering that could push elections till well into 2015, which would in the meantime also open the door for his current ally, Silvio Berlusconi, to build his own forces back up to mount a comeback.

“No Elections,” and More Stability

President Giorgio Napolitano has also repeatedly made it clear that he is not in favor of calling for elections, further scrapping that option from Renzi’s play-book and forcing the Mayor of Florence to pull the trigger sooner than he would have liked.

Indeed, there are solid indications that small parties currently supporting the government will be happy to support Renzi now precisely because they have no interest in going to early elections either (which, again, will mean their disappearance). And so a Renzi government would actually increase its voting majority compared to Letta. The whole extreme left wing of the Senate representation (or a major chunk of it) and some 5 Star delegates in the Senate as well, attracted by the idea of power and sick of their maverick leader Beppe Grillo, have signaled their openness to the current mayor of Florence.

But with Longer Term Issues

In the big picture, the main political issue for Italy’s future governance is, and will still be, the new electoral law and constitutional reforms, something that was emphasized to Renzi by Napolitano in their recent meeting. But whereas the former is just simple legislation, and therefore can pass with simple majority, the constitutional reforms that have been agreed to in January between Renzi and the government are a more complicated deal.

Constitutional reform in Italy is not easy. It requires two Parliamentary readings – in each chamber, for a total of four – and requires at a minimum a three month interval between each respective reading, as well as a two-thirds majority. If that majority is not achieved, it would then require a confirmatory referendum to take effect, subsequent to the final approval of the legislation.

The main problem is with the proposed reforms to the Senate: the plan set up by Renzi and Letta in January provides for the demise of the Senate and its transformation into a regional chamber with no power to propose legislation or amendments, and with unpaid members.

Senators have been punting on this proposal, no surprise to us or anyone else. It is hard to predict if Renzi could boost its chances of ultimate passage in the Senate, but he certainly has a better chance of doing so than Letta.

This is a crucial issue. The Senate is currently elected on a regional basis – the Constitution is clear on the matter – and it really was the hung Senate that made the country impossible to govern and forced the so-called grand coalition in 2013. Under the current electoral law proposal, the Lower Chamber and Senate would be elected on the same basis.

Enthusiasm about Renzi should also be curbed by the fact that if events unfold as we expect, Renzi will not have become Prime Minister through an electoral victory, on the wave of people’s enthusiasm. Yes, he was voted by more than 3 million people as secretary of the PD, but that’s still less than 10% of the total electorate in Italy and 7 million less than the votes the Party as a whole obtained in the last political elections. Surely he will be a stronger Prime Minister than Letta, but he will definitely not be as strong as he might look prima facie. The Parliament’s composition will, indeed, remain the same.

Rumors from the Renzi camp even point to a possible longer-term trap, where their PD leader – once Prime Minister – is consumed by vetoes, back room politics, and power games, eventually to be weakened. This is certainly the plan envisioned by a combination of forces, and namely small parties in the Parliament and even perhaps by Berlusconi, who could also be reinvigorated by the fact that Renzi, in power as opposed to outside of government, will then have a “record” attached to him that can be attacked.

This has already been hinted at in recent comments by Forza Italia’s Lower Chamber’s speaker, Renato Brunetta, who accused Renzi of wanting a “ribaltone,” a derogatory term that indicates a change in government without an election.

But for now, while it is not convenient for Renzi to do the switch, or, if more contentious, execute a coup, that is indeed extremely likely to happen, with the small parties asking Renzi to put his weight behind the desperately sought-for reforms.

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