Italy's long-deadlocked government shows signs of life

Enrico Letta's appointment as prime minister-designate has sparked hope that a coalition government might finally be formed after two months of negotiations.

After months of political gridlock a new Italian government could be in place as early as next week.

The selection of politician Enrico Letta to construct a coalition government that he would head as prime minister is a corner turned for Italy after February elections led to deadlock, and raises the possibility that badly needed legal changes, such as to the electoral law, could inch forward.

But the crisis is far from over for Italy, where there are widely different political visions, growing inter-party squabbles, stubborn economic woes, and a public disillusioned with the political class.

“I do not see how a majority formed with forces so ideologically and politically different can last for more than a couple of years,” says Andrea Mammone, a historian at Royal Holloway, University of London, who co-edited "Italy Today: The Sick Man of Europe."

“When you are forced to have a government made by three different electoral forces, with different visions on the economy, and some divisions, for example, on the judicial system, how can it work?” he says.

Italy was plunged into crisis after February elections resulted in a legislature so divided as to leave the country essentially ungovernable.

Bridges to build

Italy was steered, since 2011, through the eurozone crisis by the centrist technocrat Mario Monti, after Silvio Berlusconi of the center-right People of Freedom (PdL) fell from power. While Mr. Monti was widely hailed outside of Italy for his commitment to austerity, those same policies angered Italian voters. They only gave his coalition 10 percent of votes in the February race – a distant fourth place.

The center-left Democratic Party (PD), from which Mr. Letta hails, won a majority in the lower house but not in the Senate, which is effectively needed to govern. Mr. Berlusconi’s party had an unexpected political revival, winning only slightly less votes than the PD. At the same time, a comedian, Beppe Grillo, rose to political power with his anti-establishment Five Star Movement, which garnered a quarter of the votes.

The results left the PD, PdL, and the obstructionist Five Star Movement unwilling and unable to cut any deals with each other – to either form a coalition or select a new president. Last weekend the PD and PdL finally asked President Giorgio Napolitano, age 87, to accept an unprecedented second term, paving the way for his selection of Letta and a new government to follow.

Letta is considered the best choice for building bridges between the parties, as a PD member who is respected across political parties. His uncle is a long-time aide of Berlusconi. He is also one of the youngest leaders of Europe, at age 46, which could send a message that Italy supports a new generation of politicians.

In a small but symbolic move, he drove his own Fiat to the presidential palace on Wednesday, instead of arriving in the more standard motorcade.

He said his first priority was to help pull Italy from its economic tailspin, with unemployment at almost 12 percent. "It is a very difficult situation, fragile, unprecedented," Letta said.

Once he forms a government, the parliament could pass a confidence vote early next week. President Napolitano has condemned the political class for their inability to put their interests aside and compromise over the past two months and threatened to resign if Letta’s efforts to form a government are sabotaged. The major parties have agreed to support the government, which is expected to have members from the PD, PdL, and Monti’s alliance.

A host of challenges

But he faces multiple problems. First is his own party. During the impasse Pier Luigi Bersani, former head of the PD, resigned, which threatens to pull his party apart and effectively hand more power to the controversial Berlusconi.

Berlusconi’s party wields far more power today than before the elections, when the PD was expected to win a clear victory. “Berlusconi is the big winner,” says Stefano Sacchi, a professor of political science at the University of Milan. “He was politically dead before Christmas.”

Now finding middle ground will be a constant struggle, something Letta seemed to acknowledge Thursday, a day after accepting his new post. "I think we'll need many more hours because we're coming from a period of deep mutual opposition and the differences that still remain are very significant," he told reporters.

Two of the most polarizing issues are judicial form and a loathed property tax that Monti reinstituted, says Mr. Sacchi. Berlusconi’s party has said it will not accept any government that does not move to repeal it. “Many issues will pop up,” Mr. Sacchi says. “But the most contentious is the old property tax, and the matter of the administration of justice.”

Mr. Grillo is also a winner, says Mammone, as he can use the new coalition to show that all the political elites are the same, and that outsiders (and common citizens) are the only hope for a new Italy.

"Grillo is very happy right now. He is proving that they are together, that there is no difference between them."