Renzi Posts Italy’s Biggest Election Victory in 50 YearsAndrew Frye
Prime Minister Matteo Renzi won Italy’s European Parliament elections with the biggest share of the vote in more than half a century, turning away a populist tide that overwhelmed governments in Paris and London. Italian bonds surged.
Renzi’s Democratic Party, or PD, won 41 percent of the vote in Italy, nearly double the 21 percent registered by Beppe Grillo’s euro-skeptic Five Star Movement, according to the Interior Ministry. The PD’s 41 percent was the highest for a single party since the now-defunct Christian Democrats took a point more in the 1958 parliamentary election.
The result gives Renzi a rout in his first national vote and sets the 39-year-old premier apart from counterparts in France and the U.K. who ceded ground to European Union critics. Renzi, who took office in February by way of parliamentary maneuvering, appealed to voters by passing tax cuts and promising to push EU colleagues into adopting more expansive economic policies. The vote result may give him added clout.
“I’m confident that Prime Minister Renzi will make use of his mandate” from voters, Mario Monti, a senator and former premier, said in a Bloomberg Television interview.
Italian 10-year bond yields fell 12 basis points to 3.03 percent at 2:04 p.m. in Rome. Milan’s FTSE MIB stock benchmark index jumped 2.7 percent to 21,311.93.
Renzi’s triumph was the exception in Europe, where protest parties racked up gains from Athens to London. The U.K. Independence Party, which wants to yank Britain out of the EU, won the election in Britain, beating Prime Minister David Cameron’s Conservatives. In France, victory went to Marine Le Pen, head of the anti-immigration National Front.
Renzi’s status as a newcomer to Rome has allowed him to mostly escape blame for the economic stagnation that has plagued Italy for 13 years. The gross domestic product of 1.56 trillion euros ($2.13 trillion) last year is 2 percent lower than in 2001 after adjusting for inflation.
In his first 80 days in government, Renzi passed tax cuts for lower income workers and measures to give employers more flexibility to hire and fire staff. More controversial measures like a new electoral law and Renzi’s plan to strip the Senate of most of its powers are currently under discussion.
“All these reforms are positive for Italy, and have helped Renzi to maintain strong public support,” Alberto Gallo, head of macro credit research at Royal Bank of Scotland Group Plc, said in a May 23 report.
The result was a retreat for Five Star, which won the most votes in the 2013 parliamentary election with 26 percent, less than a percentage point ahead of the PD. Five Star’s victory last year wasn’t enough to put the protest party into power as the PD formed a broad coalition with smaller parties.
In yesterday’s contest, Former Prime Minister Silvio Berlusconi’s Forza Italia was third with 17 percent, the Interior Ministry said. Voter turnout was 59 percent.