2019 forecast: Italian populists at the reins

In February, Italians voted in what is now seen as a historic general election. The populist Five Star Movement (M5S) of Luigi Di Maio unexpectedly emerged victorious, winning nearly a third of the vote. The right-wing Northern League (commonly called the League) under Matteo Salvini ran second place with 18% of the vote. Meanwhile the Democratic government led by Matteo Renzi was trounced, losing 292 seats and running last of the major contenders.

At first, M5S pledged it would not enter into a coalition with the League because one of the League’s partners was Forza Italia Party, tied to controversial former prime minister Silvio Burlesconi. However, when talks between the center-left and the M5S failed to take off, M5S decided to ally with the League anyway.  

ANGER OVER THE MIGRANT CRISIS, ECONOMIC PARALYSIS, AND THE EU

Both victorious parties came to power riding a wave of dissatisfaction with EU directives targeting management of the Italian economy and the previous government’s handling of Italy’s migrant crisis.

The Italian economy continues to struggle from the lasting impacts of the 2008 global recession. It is one of the most indebted countries in the world, with a public debt of 132.6% of its GDP. Since 2014, hundreds of thousands of migrants have entered the country as well, many illegally.

The League has taken a hardline stance on migration, pledging to drastically cut the number of migrants in the country through deportations and tighter border security. Both parties have pledged populist economic reforms like tax-cuts and a guaranteed basic income along with a more combative stance against EU regulations.  

SURVIVAL OF POPULISM DEPENDS ON SUCCESS OF REFORMS

Whether or not the populism of the M5S survives will depend on how well the movement can deliver on its promises, particularly its economic pledges. The party derives almost all of its base from the impoverished south of Italy, which is facing unemployment rates of over 20% and annual incomes of around $25,000, far below the EU average.

M5S has struggled to implement its agenda as the League has been more interested in immigration reform and challenging the EU than it has been on economically reviving southern Italy.  

If the League does not help M5S make its economic promises a reality, expect the coalition between the two parties to struggle or even collapse. Divisions over the extent to which other major issues like immigration or the EU should be tackled could also result in a fissure. Ironically, the League would benefit from any new elections; polls suggest the party has doubled its support to 34%. Consequently, in the event of the government’s collapse, expect M5S to make fresh overtures to the centre-left.