Did Italy's Five Star Movement Just Blink Or Are We Headed To New Elections?

  • Written by Zero Hedge
  • Published in Economics

Authored by Tom Luongo,

Italian coalition talks have reached the end of the road.  The latest news out of Italy has Five Star Movement (M5S) leader Luigi Di Maio willing to consider someone else as Prime Minister.

From Bloomberg (so salt to taste):

“I want to do a political government with the League based on some points,” Di Maio said Sunday in an interview on broadcaster RAI. “If Di Maio as premier is the obstacle,” then let’s choose together another prime minister, he said.

Di Maio, 31, is making a last bid to form a “political government” before President Sergio Mattarella begins a final round of meetings with the parties after an inconclusive general election in March.

There will be a meeting today (Monday, May 7th), to make one last push for a government.

The Bloomberg article is giving you the EU’s preferred outcome, a League-led government with Forza Italia over-represented giving their stalking horse Silvio Berlusconi a larger say than he warrants.

Shifting Poll Numbers

As always with U.S. media, the meat of the article it buried at the end, the latest poll numbers.

Polling group Youtrend compiled an average of voting intention surveys on May 3 which showed Five Star at 33.6 percent, compared with 32.7 percent in March elections. The League has gained 4 percentage points since the elections while Berlusconi’s Forza Italia has lost about 2 points.

I find it interesting that Di Maio would blink like this just a couple of days after saying that he and Five Star Movement would prefer a second round of elections in July.  Moreover, I find it disconcerting that Salvini would want to continue hitching his rising star to a falling one like Berlusconi’s.

It’s not likely that Di Maio is going to completely cave here unless there is other arm-twisting going on behind the scenes.  M5S is too strong a movement to be shut out of its own government.

So, the likely scenario for tomorrow is that talks go nowhere as Salvini tries to leverage the coalition’s strength versus M5S’s and Di Maio sticks to his guns.

Both should be willing to got back to the polls in July to see where their support truly lies.  A result similar to the quoted poll above would give an M5S/League alliance a solid majority in Italian parliament.  Seats they didn’t pick up in March should be in play, even given that 1/3 are chosen directly now.

The new election structure which allowed for coalitions to campaign together resulted in nearly the perfect situation for continued weak government in Italy which Brussels can abuse.

But, the problem has been Salvini and his firebrand, nee Trumpian, persona which has seen the League’s support double in the past six months.

Pride Goeth and All That…

I warned you we would get to this...

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