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No more excuses for Italy’s winning parties: structural reforms shall be completed with stronger majorities with the new electoral reform

The impact of the electoral reform on the structural reforms in Italy

, by Gael Sirello and Olivier Sirello

In the last few months, Italy seems to have undergone very profound political changes. At least in appearance, because the choices of Matteo Renzi, who was appointed Prime Minister in early 2013 and known by his adversaries as “il rottamatore”, represent actually nothing more than a façade.

In the last few months, Italy seems to have undergone very profound political changes. At least in appearance, because the choices of Matteo Renzi, who was appointed Prime Minister in early 2013 and known by his adversaries as “il rottamatore”, represent actually nothing more than a façade.

In a period of profound institutional crisis that risks to undermine the social contract between Italians and their Republic, Renzi’s government is meant to pursue and achieve at least three objectives: an electoral reform to make the political system more stable, a constitutional reform to make Italian institutions more modern and, finally, a structural debt reform to meet the EC requirements. However, for the time being, only one of these ambitious – and needed – reforms has been partially achieved. With the support of Berlusconi’s political party, Forza Italia, the electoral reform, known as Italicum, was approved in the first lecture with more than 180 votes at the Senate late in January. On the other hand, a draft of the constitutional reform, which requires a very large entente in the Parliament, has been made without significant political results yet. In the same perspective, the structural reforms fiercely requested by the EU have not been yet implemented completely in the agenda of the Italian executive. In particular, these are the reduction of deficit, public spending to reduce the debt-GDP ratio and the reinforcement of foreign investments to make employment grow again in particular for the younger. All these are fundamental reforms, which require huge political sacrifice.

Before showing the real impacts of the electoral reform on structural reforms, it is worth reminding how this reform will change the current electoral and political system. Approved with a simple majority at the Senate, the new electoral reform seems to head towards the end of the legislative process, introducing new elements to make the yet fragile bipolar Italian system more stable and politically stronger. According to this reform, no longer coalitions but simple lists of candidates, principally represented by one or two parties with the same symbol and parliamentary group, will obtain the “prize for the majority”, that is a supplementary number of seats to reinforce the winner party’s election. In opposition with the previous law, sentenced as “unconstitutional” by the Italian Constitutional Court, the main representative of the list is chosen directly by parties and the rest of the candidates will be elected according to the number of preferences which were expressed for each one of them. Besides, the central point of the reform is represented by the introduction of a double ballot. If any political party obtains more than 40% at the first round of the election, similarly to the French system, there will be a double ballot between the two parties having obtained the most important results during the first round.

As a consequence, at least in appearance, the political system should be reinforced, since a candidate will win the election for sure and coalitions will acquire less importance than in the past. In Italy, as the 2013 General Elections clearly showed, the political majority has always constituted a difficult pathway for the supposed winner of the elections, the latter needing to cope most of the time with other parties to form a strong coalition that will support his or her government. Sometimes, the winner fails to do so: this happened recently with Pier Luigi Bersani, Partito Democratico, who, despite he was uncontestably the winner of the elections, he could not form a government without the consensus of either the Movement Five Stars or Forza Italia.

Having said that, it seems that the new electoral reform will bring – under these strict and contestable conditions – at least more political stability to the fragile Italian political system as an indispensable condition for achieving structural reforms. However, we express many critiques regarding its fundamental structure, not allowing the citizens to elect directly a huge percentage of their representatives as many of them are nominated directly by political parties. In this sense, we strongly believe that the electoral reform should have been a step towards more direct relations between the citizens and their institutions and not a step back towards the previous electoral reforms, which are similar in this view. In the same perspective, this electoral reform should have not been the mere compromise between two opposite camps in the logic of their mutual political interests, but rather the political expression of the democratic renewal that Italy deeply needs.

At first glance, the impact of this electoral reform on the structural reforms required by the European Union and in particular by the European Commission is difficult to evaluate. Those two reforms should be independent, the electoral reform having no direct economic impact, neither on Italy’s GDP nor on its productivity. But in fact they are not: despite the arguments brought by Matteo Salvini, leader of the Eurosceptic Northern League, it easy to think that a stronger and more stable political executive can deal better with serious economic reforms. In this sense, the new electoral reform seems to improve at least Italy’s governability so as it can cope with the serious economic challenges Europe need increasingly to deal with. Even if it is too early to predict results, hopefully, when the new electoral law will be enforced, in early 2016, the government will be backed by a strong majority in the Parliament as an essential support for its reforms and policies to achieve higher economic objectives.

The need for effective and structural reforms in Italy is more than political evidence, it is an actual fact. The high debt-GDP rate and the historically highest rate of unemployment, particularly among the younger generations, are a clear expression of the political need to structurally reform Italy in order to pave its way towards stronger economic performances. We strongly believe that in order to growth again, Italy needs profound structural reforms, insisting in particular in the domains of public finance, State organization and economic dynamism. This includes the reduction of fiscal deficit and public expenditure, by establishing more social measures, for instance by a more progressive taxation system and the imposition of a “high fortune” tax on the French model of the Impôt sur la fortune (ISF). Besides, learning from past experiences, in particular from Greece, we should think carefully about the issues and threats posed by austerity measures: reducing public spending should not mean cutting indistinctly social and public services but in fact reducing superficial expenses, in the public administration as well as in some ministries, such as defence. These are difficult choices and important responsibilities, which imply a common sense of justice, as the majority of Europeans has been claiming for many years now. Reducing public expenditures should be accompanied in this sense by the reduction of privileges, without undermining the essence of the welfare state that constitutes undeniably the foundation of the European dream. All these reforms can only be proposed by a stronger Italian executive and approved by a large majority in the Parliament, which, hopefully, will be provided with the new electoral reform.

Thus, deeply believing that Italy needs profound structural reforms not only to meet Brussels’ requirements but also to respond to the social difficulties of many Italians, the new Italian electoral reform then seems to provide Italy at least with a stronger executive backed by a larger majority in the Parliament. In this sense, governability being extremely important while dealing with serious economic challenges, even if expressing many political critiques against it, we think that the principal effect of Italicum will be to give more responsibility to the winning political parties, which will need to make essential decisions, no longer being able to postpone them because of fragile coalitions unwilling to support the government.

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