Italy in limbo as populists stake claims to govern

Anti-immigrant League leader Matteo Salvini at his press conference in Milan yesterday. "We have the right and duty to govern," he said, after the party's centre-right coalition won the largest bloc of votes.
Anti-immigrant League leader Matteo Salvini at his press conference in Milan yesterday. "We have the right and duty to govern," he said, after the party's centre-right coalition won the largest bloc of votes.PHOTO: EPA-EFE

League, Five Star Movement make early plays after voters deliver hung Parliament

ROME • Two anti-establishment leaders made early plays to govern Italy, sending ripples across the euro zone after voters relegated mainstream parties to the sidelines in delivering a hung Parliament.

With the EU's third-largest economy seemingly facing prolonged political instability, the anti-immigrant League yesterday claimed the right to rule after its centre-right alliance won the largest bloc of votes.

"We have the right and duty to govern," its leader Matteo Salvini told a news conference, saying investors should have no fear of it taking office, as shares, bonds and the euro weakened on prospects of a eurosceptic-led administration promising to ramp up spending.

Minutes later, the head of the biggest single party, the anti-establishment Five Star Movement, said it was ready to take on a responsible leadership role.

"We're open to talking to all the political forces," said Mr Luigi Di Maio, 31, in a statement. "We feel the responsibility to give Italy a government (as)... a political force that represents the entire nation."

With the vote count well advanced and full results due later yesterday, it looked almost certain that none of the three main factions would be able to govern alone, and President Sergio Mattarella is not expected to open formal coalition talks until early next month.

"Di Maio wins, Italy ungovernable," was the front-page headline on La Stampa newspaper.

After establishment parties managed to contain populists in German, French and Dutch elections over the past 12 months, it was a different case in Italy as voters rebelled against two decades of lacklustre economic growth and a surge in immigration.

A prolonged stalemate could make heavily indebted Italy the focus of market concern in Europe.

The upshot is a far more unpredictable partner for European leaders such as German Chancellor Angela Merkel and French President Emmanuel Macron as they face the United States' threat of a trade war while trying to reform the EU.

In Brussels, a European Commission spokesman said it was confident that a stable administration could be formed, "and in the meantime Italy has a government with which we are working closely".

Mr Salvini criticised both the euro and European Union restrictions on national Budgets. "The euro was, is and remains a mistake," he said, but added that a referendum over Italy's continued participation in the single currency was "unthinkable".

The rightist alliance that also includes former prime minister Silvio Berlusconi's Forza Italia (Go Italy) was on course for around 37 per cent of the vote - but for the first time the League emerged as the senior partner.

The role reversal marks a bitter personal defeat for the billionaire media magnate and his party, which took more moderate positions on the euro and immigration while the far-right League campaigned on a fiercely anti-migrant ticket.

Despite overseeing a modest recovery, the Democratic Party's centre-left coalition - which had been ruling since 2013 - trailed on 22 per cent, being also a victim of widespread anger over an influx of more than 600,000 migrants over the past four years.

Mr Salvini said that, while the League was not interested in a broad "minestrone" coalition, it would be willing to talk to all parties.

Earlier yesterday, its economics chief Claudio Borghi raised the prospect of an alliance with the Five Star Movement - heading for some 32 per cent of the vote - which would likely be little interested in further European integration.

New polls to try to break the deadlock are another plausible scenario.

A prolonged stalemate could make heavily indebted Italy the focus of market concern in Europe. By 1422 GMT (10.22pm Singapore time) yesterday, Italy's main stock index had lost 1.3 per cent, while the banking index was 2.9 per cent lower.

REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on March 06, 2018, with the headline 'Italy in limbo as populists stake claims to govern'. Print Edition | Subscribe