Scott B. MacDonald
If Euroskeptic parties win a majority, which is a possibility, and somehow cobble together a coalition, Italy could be looking at a referendum on whether to leave the eurozone.
Italians go the polls on March 4 to elect a new parliament. Based on opinion polls, it is likely that the outgoing coalition, led by the center-left Democratic Party (PD), will not be returning to office. Although PD-led governments have shrunk the deficit, stabilized the banking system, brought back economic growth and chopped away at the country’s high structural unemployment, it appears that Italian voters are ready for a change. If Euroskeptic parties win a majority, which is a possibility, and somehow cobble together a coalition, Italy could be looking at a referendum on whether to leave the eurozone, a development that would greatly complicate the financing of the country’s public sector debt, which is in excess of €2.3 trillion, equal to over 132 percent of GDP. Such a development would no doubt roil European as well as global markets.
The major parties competing in the March 2018 election are the PD, the Five Star Movement (M5S), Northern League, Forza Italia, Free and Equal, and Brothers of Italy. The key election issues are immigration, a generational divide in the workforce between the young who are shunted into part-time and temporary work and an older generation with a lock on full-time employment and pensions, and overall frustration with what many see as a corrupt and badly behaved political class. Immigration probably tops the list, partly due to a highly publicized shooting that killed five migrants in early February. Moreover, Italy is the first stop for many refugees from Africa; an estimated six hundred thousand have come to the country since 2014.
The M5S is leading in the polls, and its prime ministerial candidate, the thirty-one-year-old Luigi Di Maio, has run an energetic campaign, but his party has been tagged by a number of scandals and is hurt by its lack of experience (it has never formed a national government). Yet the M5S maintains the support of just under 30 percent of potential voters and draws support from throughout the country. It has also been gaining voter support in the country’s south and young people frustrated with by economic system they see stacked against them. The party is anti-EU, antiestablishment, anti-immigrant and anti-austerity. In the past it has favored a referendum on membership in the eurozone, more direct democracy and greater social spending.