GP Insights

GP Insights # 140, 31 August 2019

Italy: Experiments with a new coalition
Lakshmi V Menon

What happened?

On 28 August, Italy's centre-left Democratic Party (PD) and anti-establishment Five Star Movement (M5S) became new coalition partners solely based on far-right loathing. The unprecedented and questionable alliance has been criticized and ridiculed. Previously, Italy's President Sergio Mattarella gave PM Giuseppe Conte a mandate to attempt the formation of a new coalition.

 

What is the background?

Following Matteo Salvini's shock decision to dissolve the League's alliance with Five Star Movement, the latter rushed into the M5S-PD coalition feeling betrayed. 

The new partners share a bitter past. The far-right League, along with its populist Matteo Salvini, a common enemy, is responsible for the former adversaries forging a government alliance. However, beyond this shared hostility, there exist no commonalities between M5S and PD. 

 

What does it mean?

Lack of consensus on various significant aspects and frictions between the Five Star and Democratic Party point towards the plausible collapse of the coalition shortly and its inability to bring about deep-seated reform and political stability in the third-largest economy of the eurozone. It means ambushes lie ahead. 

The coalition's survival would need roping in far-left Free and Equal party and independent senators. The immediate worry is to raise $25.6 billion required to counter the forthcoming hike in VAT (value-added tax). Tackling this impending tax explosion may be the chief reason behind the alliance. 

Salvini, desiring to become the Prime Minister, may doubt the coalition but the parties have much to gain by ensuring the League defeat. 

The dramatic alliance is threatening to create a far-right government. Meanwhile, the worries of immigrants are looming large.

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