What is happening in Italy, part I

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Huh, we’re not Italian, what do we care?

It is kind of important even if you’re not Italian, actually. Italian economy has been on the edge for a few months now and if Italy collapses under its debts, the whole Eurozone is at risk of going down. This in turn could have a huge impact on the global economy so yes, for once, Italy matters. We could ask ourselves why Italy is always a cause for bad things to happen, but that’s another story.

You had elections for a new parliament last month. How’d it go?

Not too well, to be honest. While a Berlusconi re-election would’ve been pretty bad, something potentially worse happened: no one really won. The  liberal party, PD, managed to snatch a thin lead in the popular vote in both the lower and upper chambers. The problem is, this is enough for the liberals to get the majority in the lower chamber (Chamber of Deputies) but not in the upper chamber (Senate). This disaster was caused by an extremely complicated electoral system (the Senate alone is elected with a US-presidential-elections kind of system!) and the fact that the vote was split almost equally between three political forces: the liberals (Bersani’s PD and the ex-communists), the conservatives (Berlusconi’s PDL and the xenophobic northern party) and Beppe Grillo’s M5S.

Sure, that sucks. But even Obama has to work without having the majority in one of the chambers. Can’t Bersani and his PD do the same?

No, he can’t. Italy is not a presidential republic, so the Prime Minister is not directly elected by the voters. It’s the President of the Republic who puts the head of the winning coalition in charge of forming a new Government. As the Prime Minister is not elected but nominated, before his Government may get operative it must win in both the chambers a vote of confidence. A Bersani (PD) government would win the confidence vote among the Deputies, but not in the Senate. That’s why the President of the Republic, Giorgio Napolitano, asked Bersani to consult the other party leaders and see if there’s a chance to get some support for a stable government.

Well, did Bersani manage to form any alliance in the Senate then?

He tried. But, after consulting the other leaders, he concluded that “his attempt was not successful”. Clearly the two main interlocutors for Bersani (PD) were Berlusconi’s coalition (PDL, Lega Nord) and Grillo’s party (M5S). But Bersani refused any negotiation with Berlusconi because… well, you can probably imagine why. Neither his electors nor the international scene would ever accept a deal with beloved Silvio. On the other hand, he tried to talk Grillo’s party into take part in the government, but Grillo himself declared from his blog again and again that they will never make deals with the “old parties”. So we have a unsolvable deadlock among the three main forces in the parliament and no solution is on the horizon.

Isn’t it possible to call for new elections?

Not at the moment. The Italian Constitution states that only the President of the Republic can dissolve the parliament and call for new elections. The problem is, Italian President, Giorgio Napolitano, is in the last six months of his mandate. And the Constitution forbids a soon-to-be-discharged President from dissolving the parliament. So, we’re stuck until a new President is elected, possibly later this month.

So it’s just a matter of waiting

Sure, new elections could be called right after the summer (maybe even in July, though the timing for that is very tight). But the more times passes, the less the Country will be trusted by investors. Fitch already cut Italy’s rating, Moody is likely to follow soon, given the uncertain political outlook. If Italy doesn’t act fast, collapse could be imminent.

Geez, this is messed up!

And there’s more.

(continues…)

photo credit: The Economist

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