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Why Matteo Renzi Is Sinking Italy’s Government Even as the Pandemic Rages

Matteo Renzi's move to split Italy's center-left government is a distraction from its COVID-19 response — and could even force Italians back to the polls. But what's really at stake is the shape of its post-crisis recovery, as neoliberal technocrats again threaten to return to office.

Matteo Renzi, former Prime Minister of Italy, speaks in Arlington, Virginia, 2018. (Leigh Vogel / Getty Images for RFK Human Rights )

If it weren’t for the pandemic, Giuseppe Conte’s government might not have lasted even this long. Last February, neoliberal centrist Matteo Renzi threatened to split the ruling center-left coalition, only to fall back in line. But even as COVID-19 again rages through Italy, Renzi is today pulling out his Italia Viva party’s ministers — and pushing the government toward collapse.

Prime Minister Conte has confronted several major crises in his short career. In June 2018 the law professor became figurehead of a coalition uniting the eclectic Five Star Movement (M5S) and Matteo Salvini’s hard-right Lega. When Salvini quit in summer 2019 in a failed bid to force elections, M5S made an opposite deal with the center-left parties, and Conte stayed on as premier.

Conte is not a party member and was an obscure figure upon his initial appointment. But both his ability to form a new coalition two summers ago, and his initial response to the pandemic, have raised his standing. Though he has no parliamentary base of his own, Conte has become an icon for many on the soft left, and even identified as a future M5S leader.

But Conte’s undoubted skill dealing with the opportunistic cut-and-thrust of a fragmented Italian parliament may not be enough to save his job. Renzi, an acolyte of Tony Blair and Emmanuel Macron ever in search of the spotlight, is today using his leverage to try and force Conte’s resignation — and, he hopes, force the creation of a new coalition more slavishly loyal to austerity dogmas.

Left-Wing?

The crisis has a definite element of personal animus — former prime minister Massimo D’Alema, an old foe of the Italia Viva leader, mocked Renzi’s bid to oust Conte as “the most unpopular man in Italy demanding the head of the most popular.” But it also has deeper political bases, both in electoral calculations and the pressures the government is likely to face in the post-pandemic period.

The ideological divides at work here ought not to be overstated. Conte’s second government has proven no more than mildly social-democratic, even faced with the need for urgent pandemic response measures. Where it has intervened in failing firms (in 2020 part-renationalizing highways operator Autostrade per l’Italia and bailing out airline Alitalia), such moves have only made small inroads into over three decades of selloffs of public companies.

This lack of radicalism is unsurprising. The largest party in the coalition, M5S, began life with an “anti-establishment” message more directed against politicians’ privileges than austerity per se. The other main force, the Democrats (PD), are the direct product of the Left’s 1990s–2000s conversion to liberal-Europeanist ideas. Smaller partners Liberi e Uguali (LeU) and Italia Viva are both recent splits from the PD; more leftist advisers like Mariana Mazzucato do not really direct government strategy.

Yet while Conte’s administration has never fundamentally challenged neoliberal assumptions or European spending limits, even mild concessions to labor and welfare are too much for the fundamentalists of Italia Viva. It echoes hysterical denunciations by centrist outlets and Bocconi School economists accusing Conte of creating a “new Venezuela,” and imposing a “North Korean–style” layoffs ban in response to COVID-19.

The government has in truth proven only too weak at confronting business lobby groups. Even last spring’s lockdown left a large minority of firms running, and the “red zones” declared this winter have done even less to keep workers at home. Faced with an increasingly confused response, public admiration for Conte’s initial pandemic response is waning, along with the optimism that “it will all turn out OK.” Now, Renzi is attempting to use this issue to sink Conte’s government entirely.

Italia Viva’s attacks on Conte in recent weeks have especially focused on the pandemic response. It blames the premier for a lack of clarity on the planned use of European Recovery Fund money and not using the European Stability Mechanism (ESM) to fund health care investment — claiming this failure owes to an ambient Euroscepticism. They accuse his administration of racking up debts which will be offloaded on younger generations, while doing nothing to invest in their future.

Italia Viva figures like economist Luigi Marattin in fact robustly defended post-2008 privatizations and spending cuts, including in health care; Renzi’s spell as prime minister in 2014–16 saw labor protections slashed, again in the name of opening up opportunities for the young. But the focus on ESM is specifically useful as a means of attacking M5S, which has long seen this as an EU tool to impose “conditionalities” on Italian public spending. In reality, such constraints owe little to ESM specifically; the politically shallow M5S however prefers to attack this than confront bigger problems like deficit spending limits and the need for debt cancellation.

Early Elections?

Polling a dismal 3 percent, it seems unlikely that Renzi and his dwindling band of disciples really want early elections, which would prompt their own exit from parliament. Rather, faced with the current ragbag of small centrist forces (like +Europa, his former finance minister Carlo Calenda’s Azione, and even elements of Silvio Berlusconi’s Forza Italia), the ever self-promoting Renzi hopes that he can push himself to the head of some new centrist-Europeanist force, whether within a new government or by taking to the opposition benches.

All signs are that an early election would hand an absolute majority of seats to the so-called “center-right” alliance, led by Salvini’s Lega (polling in the low 20s percent) and Giorgia Meloni’s post-fascist Fratelli d’Italia (high teens). The third part of this alliance, Berlusconi’s Forza Italia, is currently rising in polls at the expense of Lega, at around 10 percent. Despite his dissociation of his “type of Right” from the fanatics who rioted at Capitol Hill, Berlusconi seems unlikely to break with his hard-right allies, a bloc that dominates regional governments across Italy.

An early election is unlikely to be held in pandemic conditions, but would also have to take place at least six months before the president of the Republic leaves office, i. e., before August 2021. Yet this is also good reason not to expect a vote in 2021 at all. Since the president is elected by MPs and senators, most sitting legislators will want the February 2022 vote on replacing incumbent Sergio Mattarella (PD) to take place with the current parliament still in place. While the president is not head of government, they can intervene in cabinet and coalition formation.

Given such calculations — plus the ongoing strains of the pandemic — the outcome that would suit most sitting legislators is not a return to the polls, but some sort of reshuffle or political broadening of the current coalition, perhaps still led by Conte. This can only work if the current parties of government find new allies in the Senate. Conte spent the early part of this week trying to draw in centrist forces, whether recruiting various M5S expellees and small parties together known as the “Mixed Group,” or by picking off individual Senators from Italia Viva and Berlusconi’s Forza Italia.

Technocrats

Yet if there is a logic to Renzi’s moves — that is, beyond mere megalomania — it is to form a new government with the current parliamentary base but with a more assertively neoliberal leadership. Conte (like M5S) has announced that he will not again ally with Italia Viva. But the possibility remains that Renzi will manage to bounce his erstwhile allies into supporting a new administration — one in which M5S have even less weight and some technocratic figure will take the prime minister’s job, in the name of uniting diverse political forces.

One name often put forward in this regard is Mario Draghi, a former European Central Bank chief and hero of neoliberal hawks. In 2011, he played a key role in the unseating of Silvio Berlusconi’s final government, considered unreliable by EU leaders despite its promised obedience to austerity measures. This operation replaced Berlusconi with Goldman Sachs advisor Mario Monti, in a technocratic government which implemented biting austerity measures backed by both center-left and center-right in parliament.

This bears comparison with Renzi’s current drive against the residually “Eurosceptic” M5S — a force that has not so much embraced the Europeanist center as capitulated to it. While M5S’s base has fractured after it paired with first the hard-right Lega, then the soft-left PD, its parliamentary rump will likely grasp at any means of avoiding fresh elections. This already happened in summer 2019, when M5S first accepted its current pact with the PD. Both Grillo and foreign minister Luigi di Maio are today calling for a national unity government.

The next days will see if Conte can save his coalition, if a stopgap is found, or if the Right is brought to power almost by accident. Any administration that does form will face a dramatic post-pandemic scenario, with soaring public debt, a severely under-strain public health care system, and likely mass layoffs this spring. Horse trading in parliament and appeals to urgency may allow a coalition to be cobbled together, perhaps led by unelected technocrats. But least of all should we expect a government strong enough to endure the social fallout of the pandemic.