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Why Italy’s European Election Results Matter

Europe Needs Reform

Today, Sunday 26th May, 2014, Italians are voting for European election candidates. There are three primary contenders: The Democratic party, Forza Italia, and the Five Star Movement.

Which of these three parties wins the day may well determine not only Italy’s future but also the future of the whole of Europe.

The PD Win Scenario

If the PD – Democratic Party, led by Italy’s unelected prime minister pro-Europe and Euro Matteo Renzi wins the most European parliament seats, this will be viewed as positive for Europe seeing as it will vindicate Renzi’s leadership of Italy. As a consequence, Italy will be viewed as being more stable.

Some regard the European election vote in Italy as a referendum on Matteo Renzi’s leadership. Although Renzi himself has denied that this is the case, he himself does need popular support to legitimise his premiership. Not all PD party voters are happy that Renzi has been working closely with Silvio Berlusconi and this may well cause some to vote for alternatives.

While it is likely that the PD will earn enough votes to place some candidates in the European parliament, it may not be the outright winner. That place may well be occupied by Beppe Grillo’s 5 Star Movement which could, conceivably, win the day.

If, on the other hand, Renzi’s party does manage to win the most seats, this may calm fear of political instability returning to Italy. It is a big “if” though.

The 5 Star Movement Win Scenario

Should the Euro-sceptic 5 Star Movement win the day, this will weaken the leadership of Italy’s prime minister and may well lead to concerns about the stability of Italy’s government.

While there are some vague signs Italy is dragging itself out of depression, reforms still need to be implemented to pull the nation up off the ground. Renzi’s progress on the reform front has been weak with many of his more important reforms, such as those of the electoral and employment systems, having stalled.

There is support for Matteo Renzi’s reforms in Europe, however, nobody really knows what would happen to Italy’s reform programme if Beppe Grillo’s 5 Star Movement people were to win the European elections.

If the 5 Star Movement performs strongly – which means either winning outright or coming a close second – calls for national elections in Italy will rise dramatically, as will uncertainly over Italy’s stability and future. Preparations for national elections would bring all reforms to a halt, and this would not be at all good for Italy’s weak economy. Europe as a whole would fear the situation in Italy may damage post-recession recovery.

Worst Case Scenario

A worst case scenario is that if the 5 Star Movement wins, Italy could find itself in the same position as it was when Silvio Berlusconi resigned in late 2011 – a widening German Bund, Italian Bond spread (which is already happening) and the spectacle of default.

In 2011 there were serious concerns that Italy’s laughably poor leadership could have toppled the whole of the European Union. While Italy’s current prime minister Matteo Renzi is far from perfect, he has established a dialogue with Europe and, to an extent, has restored Europe’s confidence in Italy, the level of which had reached an all time low while Berlusconi was in power.

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With Beppe Grillo’s people in the European parliament, the dialogue, may become difficult, if not impossible. Confidence in Italy to solve its problems may well slide too. Indeed, in the event Beppe Grillo’s 5 Star Movement ends up with most of Italy’s European Parliamentary seats, other member nations, particularly Germany, will worry.

The Berlusconi Scenario

Also regarded as a major contender in the European elections battle is Silvio Berlusconi and his reborn Forza Italia party. Berlusconi, who is not standing for election because he cannot owing to a tax fraud conviction, tends to be pro-Europe one day and anti-Europe the next. At the moment, Berlusconi is playing a pro-Europe card.

Nobody is expecting Berlusconi’s Forza Italia European elections candidates to do all that well, though it may well win European parliament seats in areas of Italy in which the mafia is dominant: read Sicily, Calabria, Campania, and to a lesser extent Italy’s other southern regions.

In an attempt to keep Beppe Grillo’s plans to cut the corruption and criminality out of Italian politics at bay, Berlusconi has been more than happy to join his alliance partner prime minister Matteo Renzi in trying to convince Italians not to vote for the 5 Star Movement. For some Italians, the stance of Berlusconi and Renzi will be enough to convince them to do the exact opposite. Arguably, by combining forces, both Renzi and Berlusconi have confirmed Grillo’s claims that there’s no difference between the two parties and have played right into Beppe Grillo’s hands.

Berlusconi’s Thinly Veiled Mafia Style Threat

Berlusconi, aside from comparing 5 Star Movement leader Beppe Grillo to Hitler, has claimed that in the event of a 5 Star Movement win, disorder could break out in Italy. The claim is being read by some in Italy as the sort of threat Italy’s mafias resort to when they suspect the outcome of a situation is not going to be favourable to their criminal interests.

Berlusconi’s interests appear to be intertwined with those of the mafia – members of his party have links, either real or suspected, to all three of Italy’s most powerful mafia organisations. Moreover, Marcello Dell’Utri, the co-founder of Italy’s original Forza Italia party has been convicted of colluding with the Sicilian mafia and acting as a go-between on Berlusconi’s behalf. It is probably only a matter of time before the full extent of Berlusconi’s relationship with Italy’s mafias come to light.

If the crowds Beppe Grillo’s pre-election campaigning drew is anything to go by, either his 5 Star Movement will win the most European parliament seats or his people will come a very close second to Matteo Renzi’s PD party. Some opinion polls on the run up to the European elections did give Beppe Grillo’s movement stroke party a lead over Renzi’s PD.

Italy’s Problems May Overflow into Europe

In the event either Grillo wins, or comes a close second, the rest of Europe will worry about Italy’s ability to solve its problems. Fears will increase within Europe that the nation’s problems may spread into the rest of Europe.

I know of a number of Italians who fear Beppe Grillo is a budding dictator. They fear that a 5 Star Movement presence in Europe’s parliament would not be at all good for Italy.

5 Star Movement supporters, on the other hand, feel that their movement could give Italy a stronger voice at European level. The same people also feel that the Euro currency is the blame for many of Italy’s ills. This, however, is not really the case. It is not the Euro which has caused problems for Italy but Italy’s own in-house management of post-Euro Italy which left Italy in such a poor economic state. But lots of Italians love to lap up Beppe Grillo’s claims to the contrary.

Italy is Europe’s wild-card, or joker, depending on your point of view. With one of the biggest economies in Europe, what happens in Italy inevitably affects the rest of the European community – and this is precisely why the results of the European elections in Italy are significant for the rest of Europe and, for the rest of the world.

An update on the European election results in Italy will appear on Italy Chronicles once the results are clear.

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