World News

Italy’s Populists May Give Talks Another Shot, as Uncertainty Lingers

Posted May 30, 2018 3:42 p.m. EDT

ROME — If at first, or second, you don’t succeed, try, try, try again. That was the lesson from Italy’s populist parties Wednesday. After the collapse of their attempt to form a government earlier this week, they were back at the drawing board, and on the campaign trail, giving it another go.

The fact that President Sergio Mattarella had vetoed their euroskeptic choice for a key Cabinet position, and that global markets sank with fears about instability in the European Union’s fourth largest economy, was apparently no deterrent for the populist Five Star Movement and League party.

Nor was the fact that Mattarella had only days ago called on Carlo Cottarelli, a former International Monetary Fund official and spending hawk, to form a technical government to guide Italy to a new election.

Cottarelli, who is unlikely to win a confidence vote in Parliament, had informal morning and afternoon meetings with Mattarella in the Quirinal Palace. But instead of presenting a list of Cabinet picks, he apparently decided to hold off to see if the parties that won a majority of the votes at elections in March could find a way out of their impasse.

“New possibilities for the birth of a political government have emerged,” a source close to Cottarelli told the Italian news agency ANSA late Tuesday night. “He is waiting for developments.”

Those developments were still developing Wednesday afternoon, but they seemed to reflect a significant shift of power within the populist alliance.

Luigi Di Maio, the political leader of the Five Star Movement, has steadily shed political capital and seemed desperate for the new talks. It did not help Di Maio that he had called for the impeachment of the president and a mass mobilization and social media campaign against him.

Nevertheless, he met with Mattarella, the president he had only days earlier called responsible for the darkest night in Italian democracy.

In one of his now regularly scheduled Facebook Live video streams after the meeting, Di Maio proposed that Paolo Savona, the euroskeptic economist whom Mattarella found objectionable as finance minister, take on another position in the Cabinet and that an unidentified new choice “of the same caliber” take the position of finance minister.

He said that his party was on board with this solution and “now it depends on the other political force,” meaning the League. “If they are OK with it,” he said, the alliance would ask Mattarella to allow their alliance’s original choice for prime minister, Giuseppe Conte, to try to form a government.

In other words, Matteo Salvini, the leader of the League, who entered the alliance with the Five Star Movement as a junior partner earlier this month, is now in the driver’s seat.

With his support skyrocketing over the course of the more than 85 days of negotiations, he continued to call for new elections as he hit the campaign trail in Pisa, Genoa and other Italian cities Wednesday, assuring his supporters that one way or another, the League would end up in the government.

But simultaneous negotiations with the Five Star Movement seemed to center on a top official in his party, Giancarlo Giorgetti, taking the position of prime minister. Some analysts speculated that Salvini coveted the position himself and that he had the leverage of Savona, and his own popularity, to force the Five Star leadership to accept.

The Five Star Movement, reluctant to give up its primacy in the alliance after winning nearly a third of the Italian vote, is resisting, according to reports in the Italian press. And Mattarella, who is very much an audience of one for all of the political performances, would also have to sign off.

The very notion of a government taking power in Italy seemed to assure the markets after Italian bonds, especially short-term ones, plummeted in the markets. The fears of new elections leading to an exit from the euro prompted the most significant dip in two-year yields in more than 20 years.

Central to the populists’ case for receiving a mandate from Mattarella is their assertion that they never wanted to leave the euro. “If the markets fear that Italy leave the euro, it’s because someone put around that rumor that this government wanted to leave the euro, but our will was never that,” Di Maio said Tuesday night. “We have never conspired to leave the euro, never!” he said in his Facebook post.

But the internet is rife with examples of Di Maio, his party’s co-founder Beppe Grillo and other top Five Star officials calling either for a referendum on the euro or for leaving the currency outright. In one video, a dejected young Italian looks sadly at the euro in his hand and tosses it into a fountain. He then imagines all the buying power he’d have with a 1,000 lire bill. Then the camera focuses on high-heeled boots moving toward him on the cobblestones and scans up to reveal a top Five Star official, Paola Taverna, appearing like a fairy godmother. She turns the euro in his hand into that 1,000 lire bill, and tells him that the Five Star Movement can make his dreams come true and it is “possible to leave the euro.” A thousand lira would be valued at a fraction of a euro.

Salvini said this week that neither he, nor his pick for finance minister, wanted to leave the euro. But in prior interviews, Salvini has clearly stated he wanted Italy out of the euro and has even failed to rule out leaving the European Union.

In a 2016 interview with The New York Times, Salvini said, “Leave the euro? Surely yes. Tomorrow morning. Once the monetary sovereignty is retaken, one can make a last attempt to renegotiate all of the treaties, Maastricht, Schengen, Dublin and Lisbon.” Those treaties are the lifeblood of the European Union.

Amid a remarkably fluid and high-stakes situation, Italian analysts contemplated a variety of outcomes. Anything seemed possible for the moment and if Mattarella decided that the country should go to new elections, either this summer or in early fall, it was not clear what the alliances would be.

If Five Star and the League entered into new elections as an alliance and vowed not to leave the euro, which is still relatively popular in Italy, they were nearly assured a landslide victory.

If they joined together to run against the euro, they would still have a good shot at winning, setting off perhaps the greatest crisis in the history of the European Union and, many of the bloc’s leaders fear, the potential collapse of its currency and the continent’s economy.

The League would also have the flexibility to reunite with former Prime Minister Silvio Berlusconi in the center-right coalition with which it ran in March, but this time its nearly 30 percent of the vote, according to recent polls, would make it the undisputed leader of that alliance.

Speaking at one of his many campaign events across Italy on Wednesday, Salvini told an adoring crowd, “My patience is at the limit.” He was not alone.