Why Italy’s Municipal Elections Matter (6/20)     Print

By Alexander Privitera, Executive Director of The European Institute

The success of the populist “Five Star Movement” in the local elections in Italy should not be exaggerated. However, it would be a mistake for Prime Minister Matteo Renzi or Europeans to ignore the warning shot that came from the vote on Sunday. This was the first electoral test on the bumpy road to the crucial referendum on constitutional changes in the fall. If Italians reject Renzi’s institutional reforms he can pack up and leave. The vote on Sunday has started to clarify a few important questions:

-Voters have shaken off mental barriers that prevented most of them from experimentation with populist parties in the past. Now they do, at least in municipal elections.

-The results confirm that Renzi’s political power relies on his personal favorable ratings, not on the roots of his party PD (Partito Democratico) in the country.

-Local politics matter, especially if tied to poor economic performance. Rome is a case in point. The city suffered from bad or outright corrupt local governments for years. The capital city is in disrepair, its economy, largely tied to public money, still suffering despite a timid recovery. Roman citizens decided to give the 37 year old woman from the anti establishment “5 Star Movement” Virginia Raggi the chance to shake up things. During the campaign she did not sound or act like an angry populist, but rather like a concerned citizen who just wants to help the city to recover. She dodged larger questions about Europe or euro area membership. Now she has to deliver. It won’t be easy.

Where the recovery has taken hold, such as in Milan, the main established parties and their candidates managed to maintain their grip on power. Milan is experiencing what many describe as an economic renaissance. Its citizens see light at the end of the tunnel.

All of this doesn’t matter to an old party establishment of the PD far too anxious to exploit the elections results to weaken Renzi. So far the prime minister needed the old guard to pass legislation in Parliament, but ultimately ruled with a very small group of trusted people. This has frustrated some party members used to sharing power and privileges. At the same time it has been a source of strength with voters as Renzi successfully painted himself as the ultimate outsider insider. Taking on “old politics” from within the political establishment included announcing and implementing a string of difficult, necessary reforms, such as the changes to the labor market. However, the longer Renzi rules and makes inevitable political compromises the more he will be perceived by voters as nothing more than the consummate representative of the very political establishment that most Italians despise. Once Renzi and the old become one his appeal will be gone. In Italy this can happen quickly, helped by Renzi’s own unshakable knack for bold announcements. They risk creating a credibility gap, especially if the economic recovery continues to lag behind his promises.

A more even and sustained recovery is exactly what Renzi now needs across the country. And that is why he advocates growth-enhancing policies at the European level. The Italian prime minister recognizes that his political future hinges on the performance of the Italian economy. He knows that he cannot promise more blood sweat and tears. That is the message that he has carried to European capitals in past months, including Brussels and Berlin. The vote on Sunday confirms that for now the only political alternative to Renzi in Italy is populism. Making his life harder in Europe could come at a steep price.