Italian referendum: some populists are worth listening to

The long, slow fuse on Italy’s time-bomb has been lit. The crushing defeat of Prime Minister Matteo Renzi’s constitutional reform proposals in the national referendum on 4th December has left the whole country—indeed the whole of Europe—wondering whether the anti-euro Five Star Movement might soon come to national power.

Five Star, the internet-based political party led from outside parliament by the comedian Beppe Grillo, is frequently described as populist, but it is cut from quite different cloth from France’s Front National, Britain’s Ukip or even US President-Elect Donald Trump. While those have got their core support from older, non-college-educated, often working-class voters, Five Star’s base is young, university educated and professional.

That is exactly the group that Renzi sought to appeal to when he landed suddenly on the national stage in 2013, when he decided to hurry from his base as mayor of Florence and compete first for his Democratic Party’s leadership and then prime ministership following the inconclusive general election of February that year.

He won his prize in February 2014 through a coup in his centre-left party through which he ousted his colleague, the incumbent prime minister, Enrico Letta. He did so largely on the twin arguments that he could credibly offer the country radical reform, under his self-anointed nickname of il Rottamatore, the demolition man; and that, at 38, as the country’s youngest prime minister since unification in 1861 he could symbolise change and appeal to young, university-educated professionals like him.

So he presented himself as Italy’s insurgent change-maker. Trouble is, he largely failed to bring change, at least the sort of change that Italians could feel in their lives and their incomes. The economy has barely grown during his nearly three years in office. Unemployment is stuck at 11.7 per cent of the workforce. Ambitious young people are still emigrating to find opportunities. The justice system remains a national disgrace.

The reforms he did bring—for schools, for labour contracts, some minor tax changes—will only produce detectable results after a delay. Meanwhile, he made two huge mistakes: he shied away from calling a general election when he was popular in 2014, and so had to govern through a coalition with small centrist parties; and he used most of his political capital to push through constitutional reforms with the aim of making a future government more effective—a government he had intended to lead.

It is that second bet that failed so resoundingly on 4th December. His plans involved ending the duplicative bicameralism of Italy’s parliament—by cutting the Senate’s powers and replacing elections to the upper house with appointment by regional assemblies—abolishing provincial governments, and centralising powers over big infrastructure projects. All this will now die.

The most pressing task is to reform the electoral law that Renzi brought in back in 2015 for the lower house, the Chamber of Deputies. It is still on the books, but it won’t stand politically, since it was part of a package with the overhaul of the now-reprieved Senate. It flowed from the same “let the government govern” impulse which the voters have just rejected, and would—if enforced—see a single set of elections yield very different results in the two chambers. But elections must still take place before May 2018 at the latest, and none of the mainstream parties want them to be held until electoral reform is agreed.

Why? To hobble the Five Star Movement. That 2015 electoral law was designed to enable British-style single-party government by handing bonus seats to the party that leads after two rounds of voting, to guarantee it an absolute majority.

Previous electoral laws have essentially encouraged or necessitated the formation of coalitions, either before the election or afterwards. The Democratic Party, its current centrist allies, and Silvio Berlusconi’s centre-right Forza Italia now want to return to that sort of system. Their reasoning is simple: Five Star will find it much more difficult than them to form coalitions.

In fact, Five Star has shunned coalitions in the past, on principle, and for the time being it has no natural partners. That is a natural consequence of running on a stance of a plague on all existing political houses—or, in Grillo’s fruitier slogan Vaffanculo!, which basically means “fuck off, the lot of you!”

So a new electoral law is likely to be negotiated, by a caretaker government, a process which could take up much of next year. Meanwhile, Italy’s economy will remain stagnant and unreformed, and its banking system will remain tottery, loaded down as it is with unperforming loans which get bigger the longer that the economy fails to grow. Any hope of substantial reform will have to wait until new elections.

Neither politics nor popular anger will stand still while this happens, however. The Five Star Movement will gain new energy and new adherents as a result of the referendum defeat. Doubts over its coherence and effectiveness, which grew following the chaotic start in June by Five Star’s mayor of Rome, former lawyer Virginia Raggi, could now be replaced by a growing feeling that it is really the only game in town for anyone wanting change.

The implication is that this is a timebomb that has to be taken seriously. Even with a new electoral law, Five Star has the potential to gain a very large share of the votes and so in theory could even form the next government alone. There is nothing certain about that—13 months is a very long time in politics—but the party is undoubtedly going to be a force to be reckoned with.

That is by no means entirely a bad thing. Five Star stands for a lot of sensible things, alongside some more explosive ones. It is building up a good record in municipal administration, with the young mayor of Turin, Chiara Appendino, drawing particular praise.

Rather than condemning it as a bunch of reckless populists, it would be more sensible for business, the media and academia to engage with it seriously. Such a process could even end up defusing the time-bomb, and turning Five Star into the change-maker that Italy does need—what Matteo Renzi should have been, but wasn’t.