The political situation in Italy is once again emerging as a risk factor.
Nearly two months after a stunning defeat for establishment parties, when in the March 4 Italian elections the Euroskeptic Five Star and League parties won a majority of the vote, on Sunday the former premier leader of the Democratic Party Matteo Renzi said that his party had lost the March 4 elections and it is not its role to govern Italy next. Almost as if the PD is trying to wash its hands of what is coming.
He also added that the decision on whether Democratic Party can back a Five Star government lies with party assembly convened May 3 and with each member of Parliament.
Fast forward to this morning, when Five Star leader Luigi Di Maio, commenting on Renzi’s remark, said in a blog post that the movement “did everything to form a government in the interest of Italians” and that the “PD said ‘no’ to citizens’ issues and they will pay for it.”
Then, moments ago, the chaos that is Italian politics re-emerged front and center after the FiveStar, frustrated with being unable to form a government with either the PD or League, called for fresh elections:
- FIVE STAR’S DI MAIO CALLS FOR EARLY ELECTIONS IN ITALY
- DI MAIO CALLS ON LEAGUE’S SALVINI TO SEEK EARLY ELECTIONS
“At this stage there is no solution other than returning to elections as soon as possible, then of course the decision will be up to President Mattarella,” Di Maio said in video statement on Facebook, adding that no change is needed to the electoral law, such as the introduction of a second round, as the new elections would be a challenge between Five Star and League.
Di Maio called on League’s leader Matteo Salvini to join him on the call for new election in June to let the citizens decide, and accused the League of siding with Silvio Berlusconi instead of working with Five Star on a “government for change.”
As a reminder, the March 4 Italian general vote left the legislature divided between three main blocs – Five Star, the center-right coalition and the democrats – without any holding sufficient seats to form a government.
So what would happen if Di Maio gets his wish?
Well, as Bloomberg reported overnight, like in most European nations, Italian political preferences are becoming more right wing as a political impasse in the country drags on nearly two months after the March general election, according to a poll published in La Repubblica.
And in the latest troubling development for Brussels, support for Matteo Salvini’s League was close to 22% compared to 17.4% at the March 4 election, according to the survey, which was conducted by Demos & Pi on April 26 and 27. The Five Star Movement is the most popular party with about 33% of backing, and the Democratic Party is third with 17.8% down from 18.7, the poll showed.
If no coalition deal is reached, new elections are the most likely option, according to Silvio Berlusconi, former prime minister and leader of Forza Italia, which is part of the center-right coalition. “The risk is there if the impasse drags on,” Berlusconi said in an interview with Corriere della Sera.
And while interviews with party leaders published in the country’s main newspapers on Sunday indicated that the deadlock is getting no closer to a resolution, a new election held today that would have the League and Fire Star win 55% of the vote would come as a shock to Europe.
This is reflected in the latest Italian 10Y yields, which spiked on news that Italy may be facing another round of elections in which the euroskeptics could be approaching 60% of the vote.
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