Italy government

Government crisis in Italy: “the political arbiter” brandishes the red card



CNN

The occupant of the Quirinal, Rome’s presidential palace, is supposed to be above the daily pressure of politics. Sergio Mattarella has been the role model in his three years as president – until now.

Mattarella, a 75-year-old Sicilian politician and veteran, is known as a man of few words. But those he spoke about on Sunday night sparked a constitutional crisis and populist outrage. He rejected a key appointment to Prime Minister-designate Giuseppe Conte’s Cabinet: that of Eurosceptic Paolo Savona as finance minister.

And he was candid about why. “The uncertainty over our position in the euro has alarmed Italian and foreign investors,” Mattarella said. Rising Italian debt prices would burn through savings and hurt businesses.

“Joining the euro is a fundamental choice for the future of our country and our young people”, added the president.

The one who once described his job as that of a “political arbiter” waved the red card, and Italy entered its 84th day without a government.

Conte – a lawyer with no political experience – has now backed down from forming a government, which may just as well be because he was under increasing pressure to explain a resume that appears to have been embellished.

But the populist Five Star Movement and League alliance that had chosen him and was at the forefront of power reacted furiously.

His indignation is all the greater because Mattarella’s politics are centre-left. Luigi Di Maio, executive of Five Star and rarely short of a colorful phrase, said: “In this country you can be a convicted criminal, convicted of tax evasion, investigated for corruption and still be a minister. But if you criticize Europe, you cannot be Minister of Economy.

He has even suggested that Mattarella could be impeached, but League leader Matteo Salvini, who once called Mattarella a “cattocommunista” (communist Catholic), has so far played down that option.

Five Star and the Right-Wing League won 33% and 17% of the vote respectively in the March elections, a dramatic breakthrough for the insurgent parties.

Mattarella’s decision to block Savona’s appointment gave financial markets a brief respite – with Italy’s 10-year bond yield easing and the Milan stock market rising in early trading. But longer term, investors will return to themes that have long haunted them: Italy’s massive debt (€2.1 trillion and rising), an inflexible labor market and a dysfunctional political system. Plus the prospect of Five Star and the League increasing their vote and implementing an unorthodox combination of tax cuts and higher social spending.

European Union deans also breathe a sigh of relief after Mattarella’s intervention. External Affairs Commissioner Federica Mogherini, herself a former member of the Italian Parliament, said she had full confidence in Italian institutions, “starting with the Italian President who is the guarantor of the Italian constitution”.

Their anxiety is understandable. Savone had spoken about Italy’s exit from the euro zone (although he had recently moderated his views) and League leader Salvini had complained: “Italy is not a colony, we are not the slaves of the Germans, the French, the [bond] spread or finance.

Former International Monetary Fund official Carlo Cottarelli is Mattarella's next choice to form a government.

Mattarella asked a former International Monetary Fund official, Carlo Cottarelli, to form a government of technocrats. Cottarelli accepted the nomination on Monday. But his cabinet is expected to win the approval of parliament, where the League and Five Star have a majority in both houses.

Salvini has already upped the ante, warning other conservative parties such as Silvio Berlusconi’s Forza Italia against supporting Cottarelli.

“If Berlusconi votes for Cattarelli, goodbye to the alliance,” Salvini told Italian radio on Monday.

For its part, Forza Italia will not vote for any technocratic government, a party spokesman said on Monday.

But some in the corridors of power in Europe even see Berlusconi as a pair of safe hands amid this crisis. Berlusconi, now 81 and still marred by countless corruption allegations, could emerge as a kingmaker in a government made up of moderate parties, but they should do much better than they did in March.

Eurocrats in Brussels (and no doubt German Chancellor Angela Merkel and French President Emmanuel Macron) are hoping the fractured deal between the League and Five Star will crumble, but party supporters may actually be galvanized by the Mattarella’s act of “resistance” when Italians go to the polls again, which could happen in September if no government is formed.

The president will not be disturbed by the fireworks he launched. There are few tougher training grounds than Sicilian politics, where Mattarella cut his political teeth. In fact, his older brother Piersanti was shot by the mafia in 1980 and died in his brother’s arms.