Renzi Buries Italy’s Fragile Coalitions With Electoral Overhaul

Prime Minister Matteo Renzi overhauled Italy’s election system on Monday in a bid to deliver more stable governments and bolster the economy in the face of the longest recession on record.

Renzi, Italy’s third premier since Silvio Berlusconi was forced out in late 2011 at the height of the debt crisis, staked his political future on the electoral law. The premier threatened to quit if the law was rejected by the chamber of deputies, or lower house in Rome.

The chamber passed the measure by 334 votes to 61 against, with several opposition parties boycotting the final, secret vote in protest.

The law guarantees “clarity, by allowing the same government to stay in power for five years, and making it clear who is the winner,” Renzi, 40, told the Milan stock exchange hours before the vote. His aim was to ensure “political stability which is a pre-condition for economic innovation.”

Since coming to power in February 2014, Renzi has overhauled the labor market to make hiring and firing easier and begun a reform of public administration and the judiciary to improve conditions for investors as he sets about trying to re-engineer Italy to drag it out of its three-and-a-half-year economic torpor.

With Italy burdened by the second-highest debt levels in Europe after Greece, critics say his efforts are self-aggrandizing. While Italy has long been plagued by fractious coalitions -- Renzi’s government is the country’s 63rd in 69 years -- he faced opposition from outside and within his Democratic party, with some labeling him authoritarian.

‘Funereal Day’

Renato Brunetta, chief whip for the Forza Italia party of former premier Berlusconi which initially supported Renzi, told the chamber before the vote that opposition parties would stay away because “we don’t want to be part of a funereal day for Italian democracy.”

“It’s the unacceptable logic of ‘I’m the one in charge here’,” Enrico Letta, a fellow-Democrat whom Renzi ousted and replaced as prime minister, was cited as saying in the Corriere della Sera newspaper.

Under the new law, the party with at least 40 percent of the vote will be assigned 340 seats in the lower house out of a total of 630 seats. If no party reaches 40 percent, a second ballot with the two leading parties will be held. Only parties with more than 3 percent will win seats, compared with as low as 2 percent at present.

The new electoral system applies only to the chamber of deputies and will come into force in July 2016. Separately, Renzi is also turning the senate, or upper house, into an unelected chamber with the aim of speeding up legislation.

‘Disgrace’

“It’s acceptable to give a party a prize if it gets more than 50 percent of the vote, but giving that prize to a minority party is a scam,” said Giovanni Sartori, 90, a professor at Florence University and one of Italy’s leading political scientists, branding the electoral law “a disgrace.”

“The majority prize will be enough to ensure stability, but the question is whether government leaders will be competent rulers or not,” Sartori said in an interview.

In a letter to the newspaper La Stampa last week, Renzi said that his “dream” was for Italy to emulate the American model, where “two parties defy each other.”

Renzi’s success in fighting off the minority faction in his party and the opposition made his political authority stronger than ever. An SWG Institute survey published on April 24 credited his Democratic party with 38.1 percent of the vote, well ahead of the Five Star Movement of former comic Beppe Grillo with 18.5 percent, and 15.5 percent for Forza Italia.

“Renzi’s reforms create a clear result and eliminate a very serious problem: the rigid bicameral system,” whereby “nothing gets approved because laws have to go from one house to the other,” Franco Pavoncello, president of the John Cabot University in Rome, said in a phone interview. All the same, “stable government isn’t enough, you also need reforms which make Italy more appealing to foreign investors,” he said.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE