Italy's Coalition Government Collapses: What's Next?

-edited

Matteo Salvini, head of Italy's League party, called for a snap election, citing differences with the 5 Star Movement.

A marriage of convenience just ended.

The 5 Star Movement (M5S), Salvini's coalition partner, attempted to derail a high-speed rail link that the League (Lega) wanted.

M5S failed, but that is the end of the coalition as Salvini Calls for Snap Elections.

What is the dispute about?

Political clashes over the project for a railway between the Italian city of Turin and French city of Lyon led Prime Minister Giuseppe Conte to put tenders on hold in March.

The multibillion-euro TAV (Treno Alta Velocità) link involves digging a 58km (36-mile) tunnel through the Alps. It is bitterly opposed by Five Star on environmental and cost grounds.

Supporters of the project say it would halve the travel time between the two cities to just two hours. The tunnel would also make it possible to travel from Paris to Milan in around four hours, down from nearly seven.

The project was launched 20 years ago and part of it has already been dug. It is scheduled for completion in 2025.

Why the Dispute?

On the surface, it is surprising that a leftist party in a country with huge unemployment would be against such a project. But here is the answer.

M5S wants projects in Southern Italy.

The League (used to be called the Northern League), wants projects in the North.

Guess where the tunnel is?

Junior Partner No Longer

The League is the junior partner in the coalition based on the last election. It will be the senior partner in a different coalition following the next election if not an outright winner.

Last Elections

Marriage Not Made in Heaven

M5S is a leftist party while the League is anti-immigration, anti-Euro right-wing party with different political priorities.

The coalition lasted as long as it did because they found common anti-immigration ground coupled with M5S' dislike of its other coalition possibilities.

Italian election math is complicated. The League might need another coalition partner but it may not have to top the 50% mark to have a solid majority.

Forza Italia, is a traditional ally, but Salvini might not want to deal with Italy's former prime minister Silvio Berlusconi, the current head of Forza Italia.

Vulture Politics and Sinking Ships

Reuters offers this interesting comment about Vulture Politics:

"Italian politicians have a long tradition of switching parties -- in the last legislature almost 350 of the 945 parliamentarians changed sides for various reasons. They also have a habit of abandoning sinking ships."

Elections When?

Parliament is in recess and the President, Sergio Mattarella, largely a figurehead except in matters like this, needs to confirm there is no longer a coalition government that works.

Immigration Policy

Three days ago, Bloomberg reported Salvini Eyes Enhanced Powers as Italy Government Wins Key Vote.

A recently passed bill gives Italy’s police and military enhanced powers to stop and seize rescue vessels picking up illegal migrants in the Mediterranean. In addition to serving as one of Italy’s two deputy premiers, Salvini also runs the interior ministry, which controls the country’s police and border forces.

Parallel Currency and Budget Deficits Back In Play

In addition to immigration policy, Salvini wants tax cuts and more spending.

Salvini has also threatened to issue a parallel currency.

These issues and more will again return to the front burner.

The EU will not be pleased, to say the least.

Mike "Mish" Shedlock

Comments (18)
No. 1-8
wootendw
wootendw

"M5S is a leftist party..."

Government-built transportation projects are socialist.

Sechel
Sechel

Italy forms new governments weekly. Don't they hold the record for post world war ii coalitions? If anything this is an indictment on the parliamentary system. In Israel such systems give all the power to the minority partners who enable the majority coalition and are single issue based.

KidHorn
KidHorn

I don't have an issue with the tunnel. Things are going to fall apart one way or another. Better to fall apart with a tunnel than without a tunnel. Wasting money on a tunnel is far better than wasting money on munitions.

leicestersq
leicestersq

Will new elections achieve anything?

Freedom to change very much of anything in Italy is limited whilst the nation is in the EZ and the EU. Any real change can only come about by changing that.

Mish
Mish

Editor

"Government-built transportation projects are socialist."

On the surface, it is surprising that a leftist party in a country with massive unemployment would be against such a project. But here is the answer.

M5S wants projects in Southern Italy. The League (used to be called the Northern League - Lega Nord - but dropped the Nord), wants projects in the North.

Guess where the tunnel is

RobinBanks
RobinBanks

Anything that adds to Brussel's problems is no bad thing.

Mish
Mish

Editor

"Will new elections achieve anything?"

I certainly hope so - I am rooting for and expect Chaos - with a major confrontation with the EU

That would be both an achievement and progress

Lost_Anchor
Lost_Anchor

From what I've heard, new Italian elections might be held as early as mid-October -- aka before England's hard brexit. Circumstances would have to be just right, but its plausible. More likely, elections would be middle to late November, leaving little time for whatever new government to come up with a "balanced" budget that the EU will find plausible and Italian voters won't rebel against the new government.

Lega doesn't care what the EU thinks, and they have made that clear. Perhaps they might make soothing noises to Brussels if it keeps this Lyon tunnel project going. Perhaps they just hire people to build the Italian side, and leave it as a tunnel to nowhere until Macron gets overthrown. The yellow vest movement in France isn't going away.

The next Italian government will have to implement a nasty VAT tax increase to comply with Brussels, the tax is hugely unpopular and damaging to the Italian economy. The new government will "temporarily postpone" this dumb idea, much like England kept "temporarily postponing" Brexit.

Lega / Salvini are already floating the idea of an Italian currency to (ahem) live along side the Euro. That is supposedly "temporary" too.

So when does Italy leave the EU?