AN EARLY election probably next January or a caretaker “institutional” government that would run through to the end of the legislature in 2013.
Those would appear to be the only two options available to Italian president Giorgio Napolitano as he attempts to steer Italy through the political crisis instituted last night by the announcement that Italian prime minister Silvio Berlusconi will resign as soon as the parliament approves an austerity budget, probably late next week.
When it comes to the handling of an Italian government crisis, much inevitably depends on the delicate balance of power between the president, the prime minister and the opposition leaders.
At this point, it would appear that the president and opposition forces are in a relatively strong position since they will argue that they have both, in different ways, acted responsibly and in Italy’s interest throughout a euro-zone economic crisis in which the person of Berlusconi was increasingly seen as the single biggest factor undermining Italian credibility on the markets.
On Monday, we had emphatic confirmation of the Berlusconi “liability” factor. It only required speculation on Monday morning that he was about to resign to see a huge positive surge in Italian shares and bonds. When he denied the resignation rumours two hours later, Italian bonds and shares experienced an equally dramatic and immediate decline.
Sources in Rome suggest that Napolitano would now dearly like to appoint a caretaker “technical” or “institutional” administration under the leadership of an experienced Eurocrat like former European commissioner Mario Monti. There is an obvious, relatively successful precedent for this move in the person of former Bank Of Italy governor Carlo Azeglio Ciampi.
In April 1993, at the height of the infamous “Tangentopoli” (Bribesville) corruption scandal which turned Italian political life on its head, Ciampi became the first non-parliamentarian technocrat to head an Italian government. His government, comprising mainly technocrats and figures from the business community, engendered bitter criticism from those who argued that it was non-democratic to have Italy run by non-elected figures.
However, history would suggest that Ciampi exercised a steady hand on the Italian tiller during a stormy passage of Italian public life. Ciampi went on to become president of the republic.
If, after his consultations with all parties, Napolitano opts to appoint a technocrat, Monti could well be his choice. An economist, currently rector of Milan’s prestigious Bocconi University, Monti is likely to inspire precisely the market confidence that Italy has lacked throughout the past year under Berlusconi.
The question then will concern just what combination of opposition, majority and technocrat figures will comprise that government. Should those elements fail to agree on a programme which would almost certainly include a heightened period of fiscal rectitude and electoral reform, then Napolitano would have no option but to call an early election.
This is the option that will be most emphatically urged by Berlusconi, who last night said it would be “unthinkable” in a democracy that “those forces which lost the elections” should form a government.