Italian Politics Daily – Wednesday, May 31st 2017

G7 Summit Taormina 2017

The main issue in today’s Italian press is the quick and unexpected convergence of the four main Italian political parties on a long awaited project for a new electoral law, which the Italian Constitutional Court blocked when then Prime Minister Matteo Renzi  presented his plan in January. The electoral system that has managed to bring together the Democratic Party (PD) Forza Italia (FI), the Five Star Movement (M5S) and the Northern League (LN), is based on the German electoral law. According to PD leader Matteo Renzi yesterday at a party meeting, the new electoral law should be ready to present to parliament by the first week of July.The new electoral law should introduce a proportional system in place of the majoritarian system currently used. In the proportional electoral system parties receive a number of seats that corresponds to the number of votes they earn on the day of the election. In the majoritarian system, instead, the party (or coalition) that gains the highest number of votes also gains tha majority of the seats in the parliament.

With a seeming agreement on the electoral law, new parliamentary elections now seem more and more likely, probably at the beginning of the fall, even though some problems remain unresolved, notably the requirement for the Italian government to present its 2018 Budget by October 15th, as directed by the European Commission. An early fall vote could complicate the process of drafting the budget since pure proportional systems force parties to form coalitions in order to obtain a parliamentary majority (unless one party gets more than 50% of the vote, which, at the moment, seems quite unrealistic) and political maneuvering could stall the political system at a time when they need to come together to pass the budget, risking damaging Italy’s credibility in the eyes of other EU members.

Meanwhile, the government linked a “vote of confidence” to the budget law. The budget law has been at the center of debate over the past few weeks, and in particular its plan to re-introduce, under a different form, the so-called “voucher” as a means of payment for short term employment. The vouchers were eliminated by the government in March following threats of calling for a referendum from the main Italian trade union (CGIL). CGIL claimed that the vouchers were used far beyond their scope to avoid the payment of social benefits. Now, according to the opposition, the government is re-introducing them under a different form and name, producing diffuse discontent even inside its governing coalition.

In another important piece of news two rival business alliances made their offers to acquire ILVA, Italy’s largest steel company, following its severe financial and environmental problems. Both business plans forecast a large-scale downsizing of the Taranto-based company which will require a massive layoff of about 5-6,000 workers over six years. Trade Unions already announced their aversion to the plan and asked for the Ministry for Economic Development to intervene in order to find a solution that may save jobs. This will surely be one of the main issues in political debate as the elections approach.

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