Insight

The 2013 Italian Election

General Politics
  • The Italian election of February 24-25 is becoming increasingly hard to call with any certainty, as the centre-right under Silvio Berlusconi continues to close the gap on the centre-left coalition led by Pier Luigi Bersani. Berlusconi’s Lazarus-like return remains this election’s wildcard.
  • The centre-left is most likely to win in the Camera, but the crucial Senate election will be decided by races in Lombardy and Sicily which both look too close to predict. A Berlusconi victory in either would force Bersani into a complicated coalition negotiation with Mario Monti’s centrist coalition. Personality and policy will both be important.
  • A Bersani-led coalition promises a high level of continuity with the agenda pursued by Monti’s technocratic government over the last fourteen months. Bersani is a pragmatic social democrat with a record in government of product market reform.
  • Bersani has pledged to lower payroll taxes, reduce Italy’s property taxes and widen economic participation among women. A Bersani government is unlikely to take leftist gestures like Hollande’s 75% top tax rate, but neither will it introduce sweeping liberalisation.
  • On the European level a Bersani government will be a strong potential ally for Paris. Bersani sees himself as pro-European and has deliberately distanced himself from anti-German rhetoric on the campaign trail. His support for tougher European oversight of national budgets will win him friends in Berlin. His views on the need for debt mutualisation in the Eurozone will not.
  • For the markets, continuity will matter. A messy or ambiguous coalition negotiation is likely to test nerves and raise doubts.

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