March 16th 2013

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Articles from this issue:

COVER STORY: Red China's global cyber-espionage exposed

CANBERRA OBSERVED: Labor government 'drowning, not waving'

EDITORIAL: A new agenda for the next five years

NATIONAL AFFAIRS: Bill to end Medicare-funded abortions for sex selection

SCHOOLING: Progressive education's disastrous legacy

CHINA: Chinese Communist Party set to implode

EUROPEAN UNION: Can 'internal devaluation' save the European Union?

ITALY: Former comedian now Italy's kingmaker

UNITED STATES: President Obama's Captain Queeg moment

OPINION: Where is Baden-Powell's Scouting movement today?

LIFE ISSUES: China: Baby crushed to death during one-child policy enforcement


CINEMA: Life, liberty and the pursuit of vengeance

BOOK REVIEW Scholarship trumps victimhood

BOOK REVIEW Epic voyages of a national hero

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Former comedian now Italy's kingmaker

by Peter Westmore

News Weekly, March 16, 2013

Weeks after the Italian people voted overwhelmingly to reject the government of technocrats imposed by the European Union (EU) — and, by implication, to reject the EU’s austerity program — there is still no clear sign that a stable government can be formed with a working majority in the Italian parliament.

Italian economist and newspaper columnist Carlo Bastasin, in an election commentary for the Washington-based Brookings Institution, said, “No parliament, no government, no president of the republic. And now not even a pope. The situation in Italy resembles a house of cards in a perfect storm.”

Italy’s left-wing coalition, the Democratic Party, has the largest single block of votes in the Chamber of Deputies, followed by the centre-right media magnate and disgraced former Prime Minister, Silvio Berlusconi.

The Democratic Party, led by Pier Luigi Bersani, has refused to form an alliance with Berlusconi, and instead has called for an alliance with the third party, the Five Star Movement led by a former Italian comedian, Giusesppe Piero “Beppe” Grillo.

The Five Star Movement is a protest party, recently formed, which gained about 25 per cent of the popular vote.

Grillo, however, has declared that he will not support either party, nor will he support the reappointment of a technocrat like Mario Monti to lead the next Italian government.

(Monti’s group won only about 10 per cent of the popular vote, a clear rejection of the policies of austerity which he has imposed over the past 15 months on behalf of the European Union and the European Central Bank).

Particularly noteworthy is the fact that the vote for both Italy’s established blocs, the left-wing Democratic Party and Berlusconi’s, have declined radically since the 2008 election.

Berlusconi’s vote was expected to collapse, in light of the scandals surrounding him. He has lost six million votes in the last five years; but, even so, nearly emerged with the largest bloc, which would have given him the majority-seat bonus and probably government.

The Democratic Party’s vote has declined by over three million since the last election, profoundly shocking its leadership which believed that it would easily emerge as the largest party, with power to shape the next government.

The left believed that, as the party had promised to soften the Monti government’s austerity program, it would collect the protest vote against the EU’s economic policies. It had positioned itself to capitalise on the anti-EU vote. It did not happen.

The left has been badly shaken by the outcome. The Policy Network Observatory, a left-wing think tank in Europe, headed its election coverage: “Italy passes a no-confidence verdict in the centre-left”.

It said, “In contrast to what we had thought for at least the past two years, the PD [Democratic Party] is not Italy’s undisputed leading party. The centre-left coalition with 29.5% finished 0.3 percentage points ahead of the centre-right in the Chamber of Deputies vote, thus claiming the majority seat bonus.”

The election stalemate was confirmed when Mr Bersani said he would not form a new grand coalition with Berlusconi, Beppe Grillo said he would not go into a coalition led by either the left or the right, and all parties rejected a continuation of Mario Monti’s government of technocrats.

The ball is now in the court of Italy’s ageing President, Georgio Napolitano, who must commission each party, in turn, to form a stable government with a working majority in both houses of the Italian Parliament.

At the time of writing, this looked unlikely, and as a result, Mario Monti will remain —in a caretaker capacity.

In the long-term, however, any government led by technocrats would be defeated on the floor of the Parliament and have to resign.

Some have speculated that the end result of the election deadlock is likely to be a period of instability, followed by a new election. This has frequently occurred in Italian politics, so would not be surprising.

However, there is no certainty that an election would resolve the extremely fluid political situation in which many Italians have voiced their opposition to the policies of the traditional power blocs in the country, as well as to the austerity program imposed by the European Union.

What is most surprising is that, despite the unpopularity of the last government and the deep divisions in the electorate, most Italians are committed to remaining in the eurozone, and few say they want to pull out of the European Union.

One of those who has repeatedly denounced the European Union is Beppe Grillo, leader of the new anti-party, the Five Star Movement. Grillo said his party of political neophytes would vote only for a government he led. There is no sign that any of the other parties would agree to this.

Meanwhile, official data showed that Italy’s economy contracted for six consecutive quarters up to the end of December 2012, as tax increases and tighter bank credit curbed investment and took money out of the hands of consumers. Things could hardly be bleaker in Italy, Europe’s third largest economy.

The shock-waves are being felt in financial markets and throughout Europe.

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