(Bloomberg Opinion) -- A round of local elections this week could have gone very badly for Italy’s government, a makeshift coalition of the populist Five Star Movement and the center-left Democratic Party. Matteo Salvini’s right-wing grouping had hoped to secure a string of victories, including in Tuscany — a left-wing stronghold. A good Salvini performance might even have toppled the coalition.
However, the right only managed to flip one region, falling short in Tuscany and Apulia in southern Italy. Giuseppe Conte, Italy’s prime minister, lives to fight another day.
The elections were the first major political test for Conte’s government since the start of the pandemic. Italy suffered badly during the first wave of Covid-19 in the spring, but so far it has managed to contain the more recent outbreak better than other European countries such as France, Spain and the U.K. Salvini had hoped to capitalize on voter anxiety about the economic pain inflicted by the crisis.
The results — the right and the left won three regions each — were largely a vote of confidence in the incumbent regional governors, who were in charge of much of the day-to-day handling of the pandemic. For example, Luca Zaia, the right-wing governor of Veneto in the northeast, scored a thumping victory after containing the outbreak better than his counterparts in other northern regions. These were local elections and, in a sense, they remained local.
Still, the national government will take heart. A defeat for the Democrats in Tuscany would have put enormous pressure on party leader Nicola Zingaretti, who has moved the party decisively to the left and embraced the strategic alliance with Five Star. The Democrats did much better than their coalition partner on the night; they will use that to seek more influence on the government, including asking for a softer line on immigration. But they won’t destabilize the coalition.
Five Star did secure a symbolic win in a referendum vote also held this weekend on cutting the number of Italian parliamentary seats. But they suffered another humiliating collapse in the regional election. Their candidates often failed to reach double-digit vote percentages. While there will be calls for change in the party, that’s unlikely to disturb the government’s equilibrium. A new national election would cost most Five Star lawmakers their jobs, so they’ll think very carefully before seeking one.
Conte’s administration will also benefit from the demoralizing effect of the elections on the opposition. Since 2018, Salvini has been the dominant figure in Italian politics — and within the League — but his star is fading. Zaia would be a more pragmatic alternative as leader of the far-right party: He’s more interested in securing greater autonomy for Italy’s wealthy north than he is in flirting with a split from the euro zone.
In the broader nationalist alliance, Giorgia Meloni, leader of the hard-right Brothers of Italy, is emerging as a strong rival to Salvini. The right-wing coalition is still the country’s largest political grouping, but the talk of who’s in charge will be a distraction in the months ahead.
Italy’s greater stability will reassure its euro-area partners and sovereign-bond investors, who’d taken fright at the prospect of Salvini as prime minister. Unfortunately, this isn’t the only national difficulty. It’s unlikely that the Conte government will be able to address the problems that haunt the country’s economy — starting with its abysmal productivity growth.
Italy will be a prime beneficiary of the European Union funds to deal with the pandemic’s economic impact, but Rome is divided over how to spend the money and there’s a risk that much of it will be wasted. The government’s also showing a dangerous tendency to meddle with private investors, which will make some funds think again before putting their money in Italian assets.
A stable government does not mean an effective one.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Ferdinando Giugliano writes columns on European economics for Bloomberg Opinion. He is also an economics columnist for La Repubblica and was a member of the editorial board of the Financial Times.
For more articles like this, please visit us at bloomberg.com/opinion
Subscribe now to stay ahead with the most trusted business news source.
©2020 Bloomberg L.P.