Italy’s hung parliament could produce a nightmare scenario for the EU

Italy's major party leaders in the election: Luigi Di Maio of the Five Star Movement, former Prime minister Matteo Renzi of the Democratic Party, and four-time Prime Minister Silvio Berlusconi of Forza Italia.

caption
Italy’s major party leaders in the election: Luigi Di Maio of the Five Star Movement, former Prime minister Matteo Renzi of the Democratic Party, and four-time Prime Minister Silvio Berlusconi of Forza Italia.
source
Reuters/Business Insider

  • Italy faces a hung parliament, with no party or coalition gaining a majority in Sunday’s election.
  • Silvio Berlusconi’s centre-right coalition has gained the most seats so far, but is still short of a parliamentary majority.
  • The Five Star Movement has emerged as the party with the most votes, and it could form a coalition with the Northern League.
  • Together, they will be one of the most Eurosceptic, anti-immigrant, and anti-establishment governments in Europe.

Italy’s general election on Sunday has so far resulted in a hung parliament, with the country’s Eurosceptic Five Star Movement emerging as the single party with the most votes.

The centre-right coalition headed by former Prime Minister Silvio Berlusconi is expected to gain between 248 and 268 seats and a 37% vote share, which is still short of a majority, the BBC reported. Some 316 seats are needed to form a government.

If Berlusconi fails to cobble together a parliamentary majority, the Five Star Movement will likely have to form a coalition. It currently has about 32.5% of the vote, and somewhere between 216 and 236 seats.

Silvio Berlusconi.

caption
Silvio Berlusconi.
source
Remo Casilli/Reuters

While the Five Star Movement has refused to form any sort of coalition with its rivals, it has previously acknowledged that it would team up with the Northern League if forced to.

Five Star leader Luigi di Maio told staff in January that “it’s the numbers that are forcing us” to consider a coalition with the Northern League, or Lega Nord, Italian newspaper La Stampa reported.

The Northern League currently has about 18% of the vote, the Financial Times reported. That means the Five Star and Northern League have about 50% of the total vote combined.

Such an alliance would leave Italy in the hands of a Eurosceptic, anti-establishment, and anti-immigrant coalition.

Five Star Movement leader Luigi di Maio on voting day.

caption
Five Star Movement leader Luigi di Maio on voting day.
source
REUTERS/Ciro De Luca

Five Star previously called for Italy to leave the eurozone, but softened its tone as it became more popular.

Di Maio in February said he wanted to “re-negotiate some EU rules, but not [hold] in an in/out referendum,” according to the Financial Times.

He has also called for an “immediate stop” to the sea-taxi service that brings migrants to Europe. Italy is usually the first stop for refugees fleeing North Africa by boat.

Similarly, the Northern League last month called for Italy’s withdrawal from the EU if Brussels refused to re-negotiate financial and immigration policies, Reuters reported.

The party vowed to reduce the amount of money Italy paid the EU and give the Italian constitution over EU laws. It has also pledged to effectively close Italy’s borders and repatriate 100,000 immigrants per year.

Northern League leader Matteo Salvini in Milan on Monday, the day after the vote.

caption
Northern League leader Matteo Salvini in Milan on Monday, the day after the vote.
source
Stefano Rellandini/Reuters

A Five Star-Northern League alliance would be “worst case scenario for markets,” although it seemed “unlikely” at this point, UBS said on Monday. BBC Europe Editor Katya Adler said it would be the “EU’s nightmare result to come true.”

Meanwhile, the Eurosceptic French politician Marine Le Pen tweeted her congratulations to the Northern League and heralded the “arrival of a coalition led by the League… [as] a new stage of the people’s awakening!”

Speaking to Business Insider last week ahead of the vote, Belgium’s finance minister said Italy’s election could also cause problems for Brexit negotiations.

“It’s easy to imagine that the kind of coalition that you could have will have an impact on the Brexit discussion,” Johan Van Overtveldt told BI.

“It’s still the third largest economy of the euro area, it’s the fourth economy of the EU. All these things make it difficult to step forward steadily in the discussion.

“Insights change, strategic positions change, and so it’s a constantly moving process. Twenty-seven democracies, you have changes once in a while and these changes may affect how Brexit goes.”