02 December 2013

Reuters: Letta prepares to tackle Italy's voting law stalemate

The Italian PM is under pressure to overhaul a voting law blamed for dragging Italy into political and economic stalemate after the last election. However, economy minister Saccomanni has said Berlusconi's exit should make it easier for the government to push through much-needed economic overhauls.

When he named the 47-year-old centre-left politician, President Giorgio Napolitano gave him the task of overhauling a dysfunctional political and justice system that has stifled Italy's economic growth for years. Letta's administration was supposed to repair the system to prevent chronic political instability.

Now leading a smaller alliance made up of his centre-left Democratic Party, a breakaway group of rebels from Berlusconi's Forza Italia movement and a few centrists, Letta has made it clear that electoral reform is key. A new push to change the law, described by Letta as an "absolute evil", comes with the constitutional court also due to hear a challenge this week on the grounds that the system deprives voters of their constitutional rights to fair representation and a working system of government.

Most Italian politicians agree, at least in public, that the law must change. Yet despite repeated exhortations from leaders ranging from business and union chiefs to Napolitano, progress has been blocked for years by parties calculating that a change could hand their rivals an advantage. The persistent stalling also underlined the problems that have held up wider reforms of the economy, with rival political forces unable to get past their mutual antagonism and compromise on an issue which all agree guarantees instability. If it does not change, however, any future election risks producing the same kind of inconclusive result seen this year.

A variety of proposals have circulated, including a return to the pre-2005 voting law, forms of proportional voting or a run-off system along the lines of the French model, with two rounds of voting to produce a winner. However no agreement has emerged and without a two-thirds majority in parliament needed to change the constitution, it is almost impossible for a government to reform the law on its own.

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On 4 December, the controversial electoral law – used in the last three general elections – was ruled largely unconstitutional by the country’s Constitutional Court. The ruling will not have an impact on the composition of the current parliament, but forces the Italian government and parliament to speed up the adoption of a new electoral law.

Full article © Reuters (in Italian)

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Meanwhile, Italy's anti-establishment Five-Star Movement has unveiled a seven-point manifesto for next year's European elections. Leader Beppe Grillo also delivered a stark reminder to the country's fragile coalition government of the power of unabashed populism. “We are the leading movement in Italy and we will be the leading movement in Europe!” Mr Grillo told cheering supporters, predicting victory in elections next May for the European Parliament, knowing he will be competing for the growing eurosceptic vote with former prime minister Silvio Berlusconi’s rebranded Forza Italia.

The seven-point manifesto includes: a referendum on Italy’s membership of the euro, eurobonds, an alliance of peripheral eurozone countries potentially aimed at introducing a ‘two-speed euro’, and the abolition of the fiscal treaty on budgetary discipline.

Further reporting © Financial Times

Beppe Grillo's blog (Italian)

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In an interview, economy minister Fabrizio Saccomanni said the sidelining of the long-time conservative leader leaves the government led by Prime Minister Enrico Letta "more cohesive and…more determined in the implementation of our programme".  Mr Letta is under intense pressure to step up the pace of reforms aimed at freeing up Italy's sclerotic economy. The premier is hoping the government will survive until 2015, giving it time to cut taxes, ease labor laws and lower unemployment.

In a separate interview, Mr Saccomanni said Italy's economy is slowly on the mend after what he described as a "deep depression". The Italian economy has contracted for nine quarters in a row, and the government expects little more than anaemic growth next year. With a stronger majority in Parliament, the government should "operate with a more medium-term perspective than the one we have been obliged to have until now", Mr Saccomanni said.

After months in which the Letta government teetered on the brink of collapse, European policy-makers have publicly fretted over the ability of Rome to enact serious overhauls and keep its debt—currently more than 130 per cent of gross domestic product—under control. Some regard chronic instability in Italy, the eurozone's third-largest economy, as the major threat to the currency bloc.

Full article © WSJ (subscription)

© Reuters