Update: Sadly, the Italian election unfolded as our graphic novel (see below) predicted. Italians, tried by the recession and wary of more austerity, delivered a “protest vote” that produced no clear winners.
The country is simply “ungovernable,” as Italian business columnist Stefano Folli put it. According to the exit polls published by his Il Sole 24 Ore newspaper, Italy’s centre-left coalition, lead by Pierluigi Bersani, and the centre-right alliance headed by former prime minister Silvio Berlusconi are neck-and-neck, having seized about 30 per cent of the vote each. A razor-thin advantage on Berlusconi means the centre-left will be able to at least control the lower chamber, where Italy’s electoral law awards 55 per cent of seats to the party that wins a relative majority. There are utterly no winners in the senate, though, where seats are awarded strictly on a proportional basis.
Voters who shunned Italy’s two long-standing political coalitions, didn’t turn to reformist Prime Minister Mario Monti, the former European commissioner who’s been leading the country since November 2011. His newborn party — the darling of international financial elites, eurocrats and Germany’s Angela Merkel — seized only about 10 per cent of the ballots. Instead, most of those who voted against the ancient regime of Italian politics put their faith in the hands of Italian comedian-turned-politician Beppe Grillo, whose anti-establishment party conquered a startling 25 per cent of the vote in the lower house.
Uncertainty about Italy’s political outlook sent the S&P on the biggest one-day dive since November. The yield (interest rate) on Italian bonds rose to 4.48 per cent from an earlier low of 4.17 per cent, a sign that holders of Italy’s debt are once again getting nervous. The Euro fell 1.1 per cent against the greenback. Italy desperately needs political stability to enact productivity-boosting reforms that will restore to growth and ensure it can continue to pay for its massive public debt.
What happens next is anyone’s guess. Italy’s President Giorgio Napolitano will have to consult political leaders to see whether a governing coalition can be formed. If that can’t be done, Italians might have to head right back to the polls.
If all this sounds familiar, it’s because it would be exactly what happened in Greece less then ten months ago.
*Illustrations: Valentina Vezzani. Idea and texts: Erica Alini.
Saturday, February 23, 2013