Yesterday Italy’s president, Sergio Mattarella, chose Carlo Cottarelli as the country’s interim prime minister. With fresh elections a possibility as soon as August, Cottarelli – a former IMF official – will likely fill the vacancy for a matter of months.
His surprise appointment reflects a country in turmoil. Until a few days ago Giuseppe Conte, the favoured candidate of the Five Star Movement (M5S) and Lega, seemed destined for the job. That all changed when the president blocked Paolo Savona, the preferred candidate of those same two parties, from becoming the country’s finance minister. That was not because Savona lacked credibility – the Sardinian is an academic economist and former minister – but because of his widely known euroscepticism. A man who once referred to Italy’s membership of the eurozone as a ‘historic mistake’ was deemed too much of a risk when it came to investor confidence. In turn, Conte swiftly renounced the premiership.
Luigi Di Maio, leader of M5S, responded to those events saying: “In this country you can be a condemned criminal, a tax fraud convict, under investigation for corruption and be a minister […] but if you criticise Europe, you cannot be a finance minister”. Last night he called for peaceful demonstrations and for Italians to drape the tricolore from their balconies as a symbol of protest. Within hours his Facebook video responding to Cottarelli’s appointment had been shared over 140,000 times.
This is not the first time the Italian and European political establishment have combined to select a technocrat in place of an elected politician. In November 2011 president Giorgio Napolitano made Mario Monti, a former Goldman Sachs banker, a lifetime senator before immediately inviting him to form a government. Not long after, Monti announced a cabinet composed entirely of unelected technocrats. Together they would embark on an unprecedented assault on public expenditure the result of which, after two years, was a near permanent state of recession and unemployment above 11%.
The job of Cottarelli – nickname Mr Scissors – is similar to that of Monti seven years ago. Over the summer he must placate the markets and hold on tight. Above all else, he must do whatever the key institutions – particularly the European Central Bank – tell him to.
Only this isn’t 2011, and after the calamity of Monti many Italians are wise to the reality of supposedly capable managers in place of elected politicians. If democracy is suspended, and growth and living standards still stagnate, then what precisely is the point?
The events of the last few days have triggered two crises – one for Italy and the other for Europe more generally. Constitutionally Mattarella’s decision is perceived by many to have compromised the presidency, a role meant to remain politically neutral. For Europe it means Italy’s next election, a certainty before the end of this year, could be a plebiscite on the euro itself. While M5S and Lega aren’t likely to make that offer explicit, they will position themselves as champions of national sovereignty and democracy while claiming a unique ability to re-negotiate the present settlement. If that sounds familiar, that’s because it should: the situation in Italy now resembles the moment preceding the election of Syriza in Greece and the subsequent referendum over the terms of the third bailout deal. Only this time it is the right, rather than the left, which is in the driving seat.
The unspoken question posed to the electorate in a few months will be a simple one: do you support Italian democracy and the national interest or the eurozone and perfidious foreign powers? It’s for this reason I suspect this week’s events have likely handed the two largest parties an overall majority next time. In Italy, as elsewhere, the centre-left is now viewed by many as little more than the guardian of a rotten status quo failing the 99%.
Speaking to Le Figaro in 2015 Jean-Claude Juncker, president of the European Commission, said: “There can be no democratic choice against the European treaties”. Italy, as with Greece before, is about to find out precisely what that means: no matter which party you vote for, as long as you are in the eurozone you have no control over the major decisions affecting the economy. For a country with a strong sense of national identity, pronounced social and economic problems and a rising far-right, this is a sacrifice increasingly viewed as unnecessary.
In recent days, and in softer language than Juncker, Angela Merkel said she would be willing to work with any coalition in Rome so long as their economic policy was determined by eurozone rules. Simply translated, that means national sovereignty, upheld through regular democratic elections, is meaningless.
After the near-miss of Syriza and the disaster that is Brexit, you might have thought Europe’s elites had learned some give is now necessary to maintain the eurozone – if not the union itself. Instead they persist with an agenda fuelling the far-right and hollowing out confidence in the very institutions they think they are defending.
What happens next in Italy is of historic importance. There the left must not pretend that a broken status quo works sufficiently well for just enough people. After Brexit and Trump such a path is the road to disaster. Instead, they must admit the problems of a broken system in plain language, offering a clear alternative to the forces of xenophobia and the far-right. If they fail to do so a great deal more could be lost than simply membership of a currency union. In bocca al lupo.