New Political Turmoil In Italy After Renzi Quits As Ruling Party Leader, Triggering Re-election Battle

Two months after an unexpected, landslide loss in the December 4 constitutional referendum which cost him his job as Italy"s prime minister, on Sunday Matteo Renzi quit as leader of Italy’s ruling party, in the process triggering a re-election fight against minority dissidents that threatens the stability of the center-left government, Bloomberg reports. Renzi told a national assembly of the ruling PD that he had handed in his resignation acknowledging he was set back by defeat in last year"s referendum, one day after critics from leftist factions threaten to abandon the Democratic Party.

“Everything stems from the referendum,” Renzi told more than 600 party delegates. “I feel responsible for the defeat, there is a before and an after. That referendum was a blow for the whole country, starting with the economic system and we must now put the car back on the road.” Renzi denounced “blackmail by a minority” and infighting that he called “a gift” to the anti-establishment Five Star Movement. He is expected to stand for re-election at a congress in April or May.

As Bloomberg adds, concerns about a party split have pushed Italian bond yields higher and led to the widest spread between Italian and German 10-year bonds since February 2014. The selloff may accelerate as Renzi"s resignation could benefit Five Star, which is neck-and-neck with the party in opinion polls and wants a referendum on Italian membership of the euro area. Renzi has faced challenges to his reformist strategy and leadership especially since losing the referendum, which prompted him to resign as premier and sponsor current Prime Minister Paolo Gentiloni, a Renzi loyalist and fellow PD member, as his successor.

Renzi, who has pushed for early national elections in June or September, made no such appeal on Sunday and instead urged his audience to support Gentiloni and his government.

“Basta (enough) with discussions and polemics on the government,” Renzi said. “I ask you to applaud Gentiloni and his government because it is unthinkable that the congress be turned into a congress on the government.”

Renzi’s critics have urged him to drop pleas for early elections and pledge support for Gentiloni to remain premier until the end of the parliamentary term in early 2018. They also want more time to prepare a congress and primaries, and a more leftist program.

Meanwhile, at a meeting of party dissidents on Saturday, critics of Renzi sang “Bandiera Rossa (Red Flag)”, an iconic song of the Italian labor movement. Enrico Rossi, president of the Tuscany region, called for “a party which is on the side of the workers” and derided Renzi for “trying to present himself as the Italian Macron." Dissidents also include Roberto Speranza, a former PD chief whip in the lower house, and Michele Emiliano, president of the southern Apulia region and a possible challenger for the PD leadership.

However, a breakaway could backfire on the dissidents in making early elections more likely as it could see some 20 members of the lower house, and about a dozen senators, leave the PD and weaken the coalition government, potentially leading to further political instability in Italy.

“The Gentiloni government is our government. We back it and will continue to back it until” Italian President Sergio Mattarella decides to call elections, Matteo Orfini, PD chairman, said on the eve of Sunday’s assembly. “A split would shrink parliamentary support for the government and put it at risk.”

“We’re walking on a tightrope,” Gentiloni confided to his ministers, newspaper La Repubblica reported on Sunday.

Meanwhile, the competition between the PD and Beppe Grillo"s Five Star movement is neck and neck: an Ipsos opinion poll published in newspaper Corriere della Sera on Saturday found that Five Star would have 30.9% of the vote, against 30.1% for the PD, 13% for Forza Italia of ex-premier Silvio Berlusconi and 12.8% for the anti-immigrant Northern League. Meanwhile, a breakaway faction from the PD would have limited support with only 4.3% of voters backing a new leftist party.

Italy's Renzi Promotes Renzi-ism As Alternative To Trump-ism, Le Pen-ism, Grillo-ism

Submitted by Mike Shedlock via MishTalk.com,

Former Italian prime minister Matteo Renzi announced today that he would call a PD party congress, effectively putting his role as party leader into question.

In his speech, Renzi stated “Some people wanted a party congress to find an alternative to Renzi-ism. It needs to be done as an alternative to Trump-ism, Le Pen-ism and even Grillo-ism.”

Recall that Renzi resigned as prime minister following a landslide defeat of a referendum he sponsored. He did not have the decency to disappear, instead he called for early election with him as party leader.

Italy is in the midst of a 4th consecutive technocrat prime minister, with Paolo Gentiloni now heading the government.

Renzi has now concluded early elections in June would give an advantage to Beppe Grillo’s Five Star Movement, so he first wants a party congress to affirm his leadership. He also seeks parliamentary rule changes that would benefit him in any coalition movement.

Renzi’s Gamble

Please consider Renzi Gambles on Leadership Contest to Unite Party.

Matteo Renzi has triggered a leadership contest in his ruling centre-left Democratic party, opening up a tussle that he hopes to use as a springboard for a comeback at Italy’s next general election.

He said the party needed to unite around a platform that would confront surging populism across the world, rather than be consumed by infighting.

“Some people wanted a party congress to find an alternative to Renzi-ism. It needs to be done as an alternative to Trump-ism, Le Pen-ism and even Grillo-ism,” he said, referring to the US president, leader of the French National Front, and founder of Italy’s anti-establishment Five Star Movement.

During the party leadership battle, likely to be fought in April or May, Mr Renzi is expected to be challenged by one of a group of left-wingers who consistently criticised him for his centrist policies and domineering style during nearly three years in office.

New elections are not due until February 2018, but both Renzi and some leading opposition figures have been pushing for the national poll to be held earlier in order to clarify the will of the people.

This has raised the possibility that an Italian election could join the list of consequential elections in Europe this year, alongside the Netherlands, France and Germany. But Mr Renzi’s decision to call a leadership contest this spring means that any early Italian election would probably be pushed back to the autumn.

Rules Changes

The above article did not discuss rules changes but Eurointelligence fills in the details.

Renzi is pressing the Gentiloni government to pass the electoral reforms quickly – essentially an extension to the Senate of the new system for the chamber of deputies, minus the bits challenged by the constitutional court. Crucially, Renzi wants a majority premium not only for parties but also for coalitions. We infer from this that Renzi could be seeking a majority premium for a hypothetical alliance with Forza Italia, hoping that both parties would together surpass the 40% threshold. Renzi, however, favours everybody running individually, and then forming a coalition afterwards. In this case the majority premium would be irrelevant since no single party in Italian politics comes close to 40%.

Needless to say, there is opposition to Renzi’s plans within his own party. The mildest opposition is from the new prime minister, Paolo Gentiloni, who expressed doubts whether it would be possible to form such a coalition. He said Italy might end up like Spain last year – without a government for a long time (we think that would be that most benign of all scenarios). Another establishment politician who has already voiced his opposition to Renzi’s planned coup is Romano Prodi, still influential in Italian politics. He wants to wait until 2018, and favours Giuliano Pisapia, the former mayor of Milan.

La Repubblica recorded a negative reaction also from the Left of the PD, unsurprisingly, amid reports that Massimo D’Alema and even the fiercely loyal Pier Luigi Bersani are considering splitting away from the party.

Europeans are used to the idea that Grand Coalitions are the ultimate solution to an electoral impasse. But we find it hard to see how this could work in Italy. We are not even sure that such an alliance would necessarily have a majority. And would Berlusconi support Italy’s membership of the eurozone? He himself would be neither in government nor in parliament, as he is barred from holding office until 2018. So this raises the question of how stable such a construct would be.

Complicated Political Mess

This is a complicated mess. Berlusconi wants election in 2018 so he would be able to run. Renzi wants an election this year as does Beppe Grillo. But Renzi also wants to squash opponents of Renzi-ism first.

This may push back elections to August. Alternatively, the president may just decide to wait until 2018. A delay until 2018 is to the benefit of Berlusconi, and a delay also runs the risk of splintering PD with more infighting even if Renzi were to remain as party leader.

Given PD is the only major party that wants to stay in the Eurozone, coalition math favors Grillo.

Renzi struggles to get out of the box he is in, but it looks increasingly difficult.

Italy Increasingly Likely To Abandon The Euro

Submitted by Mike Shedlock via MishTalk.com,

An analysis of the political setup in Italy shows eurosceptics are on the verge of taking control of the country.

The only missing ingredient is an early election. And early elections are now the odds-on favorite.

Let’s back up a bit to fill in the pieces as to how things got to this point.

1. Former prime minister Matteo Renzi stepped down in December after holding a referendum that failed miserably. See Renzi Resigns Following Crushing Referendum Defeat: Beppe Grillo, Marine le Pen, Matteo Salvina Tweets


2. Italy’s president, Sergio Mattarella, appointed Paolo Gentiloni as the new prime minister after Renzi resigned. See Meet Paolo Gentiloni, 4th Consecutive Italian Technocrat Appointed Prime Minister: Renzi Not Vanquished Yet


3. The president said he would not hold new elections until differences between how the lower house of parliament assigned seats.


4. Point number three has been resolved. Both houses of Parliament are back on a proportional system.

New Elections

• New elections are possible now but the next scheduled elections are not until 2018.


• Matteo Renzi wants new elections in June. Even though he resigned, he wants back in. Renzi wants new elections this year because PD may oust him if he waits.


• Beppe Grillo wants elections as soon as possible because he believes he will win, and also because FI leader Silvio Berlusconi cannot run for prime minister until 2018 because of a tax fraud conviction.


• Berlusconi does not want early elections, but he is in the minority.

It is up to the president to call new elections, and there is pressure form at least two fronts for him to do so.

Election Polls

Chart from Opinion polling for the next Italian general election.

The situation for Renzi is actually way worse than it appears. Not only do polls tend to over-play support for PD, the party is about to splinter. Via email, Eurointelligence explains …

Whatever Happens in Italy, Grillo is Winning

Our pessimism about the political outlook for Italy was confirmed once more this morning with reports that the PD is now very likely heading for a split – the trigger being disagreement over the election date. Pier Luigi Bersani, Renzi’s predecessor as general secretary of the party, came out strongly against early election in June saying that the PD would be finished as a party if Renzi were to go ahead.

Renzi could assemble a majority in the Italian parliament in favour of a new electoral law and early elections, so this is technically doable. The question is, at what cost? Beppe Grillo’s Five Star Movement officially supports early elections, but Renzi probably has a point when he says that another year of political chaos in the PD would drive even more voters to Grillo, whose party thrives on the chaos in the country. In other words, Grillo wins both ways, and the likely design of the electoral law will also be favourable to his party. So much for the theories that there would be a technical stitch-up to keep the Five Star Movement out of power. The Italian establishment is not sufficiently united to be able to do this.

Massimo D’Alema, Renzi’s fiercest oponent within the PD, says he has done research on the potential electoral support for a party to the left of the PD which could count on 11-14% of the vote. With a weak centre-right and a fragmented left, the probability of a victory by the Five Star Movement, perhaps in alliance with other radical forces, must now be considered very high.

Wrong Five Ways

The don’t worry, it will never happen crowd said …

1. Renzi would win the referendum – Wrong


2. Renzi would not resign if he lost – Wrong


3. Renzi would gracefully step aside after he resigned – Wrong


4. PD would not splinter – Wrong


5. The other parties would pass legislation making it impossible for M5S to gain control – Wrong

That same don’t worry, it will never happen crowd also proposed

1. An alliance between Grillo and other parties won’t happen


2. If an alliance does happen, parliament will not approve a referendum on the Euro


3. If there is a referendum on the Euro, people will vote against leaving


4. It still requires a constitutional amendment

Point number 6 is in the works right now. And if such an alliance does form and win (both are highly likely in my opinion), then all that is left to stop “Italeave” is fearmongering and points 8 and 9.