Italy's President Dissolves Parliament: Elections on March 4

Italy's economic woes and political woes go hand-in-hand. New elections are coming up but a hung parliament is likely.

Italy’s President Sergio Mattarella dissolved parliament Thursday and called elections for early March, a vote that will highlight the economic and political problems still stalking Europe and the country’s role as the weakest flank in the currency union.

The vote—the latest in a series of momentous elections in Europe—will be in line with the overwhelming trends of 2017, featuring a fractured electorate, continued pressure from populist movements and predictions of a struggle to form a cohesive government.

Its economy is 6% smaller than at the start of 2008, making it the only G-7 economy not to have returned to its pre-crisis size.

In a speech a decade ago as head of Italy’s industry association, Luca di Montezemolo, former chairman of Fiat SpA, listed 10 urgent reforms Italian businesses wanted from the government, including a leaner bureaucracy and lower taxes. “I could give that same speech today,” he said in an interview.

The downturn has left deep scars in Italy’s social fabric. More than 4.7 million Italians live in absolute poverty, nearly double the number a decade ago, according to Italian statistical agency Istat.

With youth unemployment at 35%, an entire generation of young people remains jobless or subsists on poorly paid, short-term contracts. Even as the brain drain that has afflicted much of southern Europe begins to ebb, thousands of Italian university graduates continue to emigrate each year.

With no group likely to reach a majority, a hung parliament is highly probable. Lorenzo Codogno, former director general of the Italian Treasury Ministry, assigns a 75% probability to such an outcome.

Return of Silvio Berlusconi

The current situation is one that fuels populism. Support for Matteo Renzi's party has collapsed.

However, Renzi and former prime minister Silvio Berlusconi conspired to change the rules for the specific purpose of blocking Beppe Grillo's Five Star movement.

The elections could have been called earlier but they were purposely delayed to benefit Berlusconi although the 4-time prime minister still cannot become prime minister again himself due to a tax fraud conviction.


Previously, Berlusconi was viewed as a Eurosceptic, but his tune comes and goes with the wind. Currently, the Five Star movement is the only party pushing hard to have a decisive vote on Eurozone membership.

Regardless, Italy has had corrupt governments after corrupt governments. It's rules and regulations are hugely problematic.

Economic Freedoms

Italy and France are not ranked highly in terms of economic freedom. For details, please see Economic Freedom: Best and Worst Countries, US Timeline History .

Don't expect the next election to solve any economic problems.

Mike "Mish" Shedlock

Comments (7)
No. 1-7

The problem for Italy is that it is ahead of the curve: it has spent the youthful, progressive saviour, Macron type character ploy, with Mateo Renzi. They are scraping the bottom with Silvio Berlusconi. BTW, I wouldn't take the Frazer Institute ranking to the bank.


The 5 star "movement" is, more or less, the PD. They pretend to be different, but if you understand Italian, and you have seen what they have done until now, they are pure socialists. They are pro-EU, pro-welfare state, pro increasing the illigal immigration and so on. They pretend to be "anti" establishment ...but they act in a different way. They are born to "save" the situation when the PD was going to become too much heated by the people. I cannot understand why abroad, something that is so clearly false for a lot of us Italians, is still considered true: that the 5 star is anti-establishment and "populist".


That's now 62 governments in Italy since WWII. So much for the parliamentary form of government fostering stability.


Mish - you miss an important point with regards to this upcoming election: Gentiloni, the puppet PM, has crucially not resigned thus he will remain in office with all his powers in the event of a hung parliament.

Mike Mish Shedlock
Mike Mish Shedlock


"The 5 star "movement" is, more or less, the PD. " ... =That's ridiculous. M5S is anti-Euro and anti-EU. PD is the opposite