Conservative Analysis of the Elections in Italy and Cyprus

Center-Right and Center-Left Each Win Chambers in the Italian Parliamentary Elections

            None of the four major blocs of parties came close to winning a majority of the popular vote in the Italian parliamentary elections, in either the Senate or the lower Chamber of Deputies.   In the lower house, the center-left bloc edged the surprisingly-strong center-right bloc by four tenths of one percent in unofficial returns – enough to win a majority of seats because the winner of the most votes receives a bonus allocation of seats.  The center-right is questioning the validity of the results.

However, no bloc gained a majority in the Senate.  Although the center-left won nearly one per cent more popular votes for the upper chamber, the center-right bloc will have the largest share of seats.  The center-right succeeded in its goal of denying a working majority to the center-left, meaning Italy will have the unusual situation for a parliamentary state of a divided government, and force either a grand coalition or a second parliamentary election.  

            Interestingly, only one of the four major candidates was a candidate for both parliament and prime minister, the centre-left candidate.  Prime Minister Mario Monti, who was appointed life senator and then premier, is not a candidate for parliament but would have headed another government if the centrist party he leads would have won.  Former Prime Minister Silvio Berlusconi, the centre-right candidate, is not his party’s candidate for premier; the party’s secretary would be prime minister.  The leader of a populist movement that won many seats in both chambers was also not a candidate for prime minister.

            Debt was the main issue in the election campaign.  Monti has implemented austerity, continuing Berlusconi’s efforts in cutting spending to eliminate the deficit and reduce debt, but, unlike his predecessor, he has raised taxes.  The center-right campaigned on repealing the hated tax increase.  The center-left has promised to continue Monti’s austerity program, but one of its coalition partners, an anti-austerity far-left party, and the Prime Minister, have ruled out a coalition together.  Regardless, the two blocs lack enough combined seats in the Senate for a majority.  Italy’s budget is projected to be balanced by next year, but its economy is in recession because of the tax increases.   

Because of the lack of a decisive winner of the parliamentary elections, a coalition government is likely.  The uncertainty will continue in the meantime as it remains unclear what coalition of blocs of parties could possibly produce a working majority.  A minority government would soon necessitate another parliamentary election.  An apparently elusive grand coalition of the center-left and center-right would avoid a second vote, but would result in an unstable government that would also require parliamentary elections within several months.

As I have posted previously, Italy has one of the largest economies in the world, but has amassed a one of the largest debts in the world.  Its fiscal soundness is of critical importance to the European Monetary Union and the single currency project, as well as to global economic health.  Investors are disappointed the elections have not produced a clear winner. 

A Conservative Wins the Cypriot Presidential Elections

The conservative candidate won the presidential elections in Cyprus.  The campaign was dominated by fiscal matters, instead of the usual subject of the partition of the island republic between Turks in the north, which is occupied by Turkey, and Greeks in the south.  Cyprus is struggling with a severe debt crisis.  The conservative president is expected to cut spending to reduce the debt, along the lines of the austerity programs implemented in Europe.