Early elections are increasingly likely in Italy. Here’s why

Could Italy hold elections much sooner than the May 2018 deadline? And what form will those elections take? The country appears to be getting closer to answering these key questions.

Early elections are increasingly likely in Italy. Here's why
Matteo Renzi (L) and Silvio Berlusconi (R). Photos: AFP

Speculation is growing that Italy may head to the polls in the early autumn, and a series of crucial meetings between the main parties began on Monday. These could prove decisive in setting the timing for the election.

“The risk of early elections has suddenly increased to 60 percent, in my view,” economic analyst Lorenzo Codogno said on Monday.

Figures from all the major parties have been calling for early elections since the defeat of a referendum called by ex-Prime Minister Matteo Renzi, and Renzi himself suggested at the weekend that holding Italian elections at the same time as Germany's (planned for September 24th) would be logical.

Speaking to Il Messaggero, the recently re-elected leader of the ruling Democratic Party (PD) said: “For better or for worse, the German elections have always been a watershed in European politics. So voting at the same time as Germany would make sense for many reasons.”

Renzi also added that bringing elections forward could help tackle the current unease in the financial markets caused by political uncertainty.

Matteo Renzi. Photo: Emmanuel Dunand/AFP

READ MORE: Why Italy is still Europe's poor relation

The biggest obstacle to early elections is the lack of a workable electoral law.

This is because the reforms proposed in December's referendum would have changed the formation of Italy's parliament, abolishing the bicameral system. Italy's electoral law had been rewritten to accommodate these changes, so parliament is currently working on putting together a new version.

President Sergio Mattarella in March called on both of Italy's houses of parliament in no uncertain terms to stop dragging their feet over the approval of a new electoral law, and Renzi has accused the other parties of “wasting time” over its creation.

But after months of slow progress, at least three of the four main parties (the PD, Five Star Movement, and Forza Italia) seem to be edging towards agreement on the form this law should take.

The most likely option appears to be a German-inspired system, using proportional representation with a five percent threshold. The attraction of this is that extremist groups who obtain less than five percent of votes would be kept out of parliament, and that the threshold should in theory lead to less fragmentation. 

READ ALSO: Everything you need to know about the Italian political system

Some of Italy's smaller political parties, including the conservative Brothers of Italy, the centrists led by Foreign Minister Angelino Alfano, and the Progressive and Democratic Movement (MDP), which split off from the PD earlier this year, have opposed the five percent threshold, but the four major parties seem to be approaching an agreement.

The German model has been favoured by ex-premier Silvio Berlusconi, whose Forza Italia (FI) are unlikely to receive enough votes to win in a system with majoritarian representation, but could join a centrist coalition.

Renzi meanwhile has called for a majoritarian system, so that the winners would be known on the evening of the vote, but there are strong hints that the two parties will reach a compromise: an electoral law based on proportional representation, and early elections.

Analyst Codogno noted that a proportional representation system would make an outright victory for any single party very unlikely.

But he added: “This would be difficult to achieve with any system as the country is broadly divided into three equal pieces: centre-left, centre-right and the Five Star Movement. Probably, it would not even be desirable and democratic to allow an outright victory of a party that commands only about one third of the votes.”

Graph of opinion polling in the lead up to the next Italian election. The Democratic Party is represented in red, the FIve Star Movement in yellow, Forza Italia in light blue, and the Northern League in green. Graph: Impru20/Wikimedia Commons

With the PD and FI seemingly in agreement, the leaders of Italy's two other major parties have also said they would support such a law, albeit grudgingly.

The leader of the far-right Northern League, Matteo Salvini, said last Monday that the party would accept any electoral system including the German model, if it meant a vote in September. However, Salvini criticized what he called “a shady-deal law” and said the Northern League would prefer a first-past-the-post system. 

Beppe Grillo, leader of the Five Star Movement (M5S) which is currently neck-and-neck with the PD in the polls, said in a blog post that, following an online vote among members, the party had decided to support the German system – subject to a few “conditions”. MPs from the PD and M5S were due to meet on Monday to discuss a possible agreement.

Grillo wants elections to be held on September 10th, five days before lawmakers in the current parliamentary term become eligible for 'vitalizi' pensions. These pensions are paid from the date the recipient leaves parliament, rather than when they reach retirement age.

So, if the German model is adopted, what would be the most likely scenarios?

Codogno said that there is around a 95 percent probability of a hung parliament, leaving the country with the options of fresh elections in six months, a technocratic government, or a coalition of the mainstream parties.

“Italy does not have a long history of grand coalitions and those recorded in the past did not really work well,” he said. “Still, in a situation in which the country is split, it is probably the only solution and maybe even the most desirable one.”

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What does the shut-off of Russian gas supplies mean for Italy?

After Russian energy giant Gazprom suspended gas deliveries to Italy on Saturday, many are wondering what consequences the stoppage will have on the country’s energy supplies.

What does the shut-off of Russian gas supplies mean for Italy?

What’s going on?

Over the past three days, Italy has received none of the gas supplies it expected from Russian energy giant Gazprom. 

The impasse officially started last Saturday, when Gazprom announced it would not be able to deliver gas to Italy due to “the impossibility of gas transport through Austria” – Russian gas supplies are delivered to Italy through the Trans Austria Gas pipeline (TAG), which reaches into Italian territory near Tarvisio, Friuli Venezia-Giulia. 

READ ALSO: Russia suspends gas to Italy after ‘problem’ in Austria

Though Gazprom originally attributed the problem to Austrian gas grid operators refusing to confirm “transport nominations”, Austria’s energy regulator E-Control said that the Russian energy mammoth had failed to comply with new contractual agreements whose introduction had been “known to all market actors for months”. 

Additional information about the incident only emerged on Monday, when Claudio Descalzi, the CEO of Italy’s national energy provider ENI, said that supplies had been suspended after Gazprom failed to pay a 20-million-euro guarantee to Austrian gas carrier Gas Connect. 

Descalzi also added that ENI was ready to step in and deposit the guarantee itself in order to unblock deliveries to Italy.

Logo of Italian energy regulator ENI.

Italian energy regulator ENI said it was ready to pay Austrian gas carriers a 20-million-euro guarantee to unblock deliveries. Photo by Marco BERTORELLO / AFP

READ ALSO: Italy’s ENI ready to pay guarantee to unblock Russian gas

At the time of writing, however, no agreement between ENI, Gas Connect and Gazprom has yet been reached, with the stoppage expected to continue until Wednesday at the very least.

What would an indefinite stoppage mean for Italy’s upcoming winter season?

Though energy giant ENI appears to be confident that a compromise between all the involved parties will be reached shortly, the “indefinite shutdown” of the Nord Stream 1 pipeline in early September is somewhat of a menacing precedent. 

After fears of a long-term supply suspension cropped up over the weekend, outgoing Ecological Transition Minister Roberto Cingolani publicly reassured Italians that “barring any catastrophic events, Italy will have the whole of winter covered”.

It isn’t yet clear what exactly Cingolani meant by “catastrophic”, but the latest available data seem to suggest that Italy wouldn’t have to resort to emergency measures, chiefly gas rationing, should Gazprom halt deliveries indefinitely. 

Italian Minister for Ecological Transition Roberto Cingolani.

Outgoing Minister for Ecological Transition Roberto Cingolani said that, “barring any catastrophic events”, Italy will have enough gas supplies for the winter. Photo by Andreas SOLARO / AFP

In 2021, prior to Russia’s invasion of Ukraine, Italy received around 20 billion cubic metres of Russian gas per year, which accounted for about 40 percent of the country’s annual gas imports. 

But, thanks to the supply diversification strategy carried out by outgoing PM Mario Draghi and his cabinet over the past few months, Russian gas currently accounts for, in the words of ENI’s CEO Claudio Descalzi, only “about nine to 10 percent” of Italian gas imports.

READ ALSO: Italy’s Draghi criticises Germany over latest energy plan

Granted, Italy still receives (or, given the current diplomatic deadlock, expects to receive) a non-negligible total of 20 million cubic metres of Russian gas per day. But, should supply lines between Rome and Moscow be shut off until further notice, Italy could fall back on existing gas stocks to meet winter consumption demands. 

Last Wednesday, Cingolani announced that the country had already filled up 90 percent of its national gas stocks – Italy has nine storage plants for an overall storage capacity of 17 billion cubic metres of gas – and the government was now working to bring that number up by an additional two or three percentage points.

These supplies, Cingolani said, are set to give Italy “greater flexibility” with respect to potential “spikes in winter consumption”.

Gas storage station in Loenhout, Belgium.

Italy has nine storage plants for an overall storage capacity of 17 billion cubic metres of gas. Photo by Kenzo TRIBOUILLARD / AFP

Finally, Italy is expected to receive an additional four billion cubic metres of gas from North Europe over the winter months – deliveries which will be complemented by the first shipments of LNG (Liquefied Natural Gas) from Egypt.

Both of these developments are expected to further reinforce Italy’s position in the energy market for the cold season.

What about the long-term consequences of an indefinite stoppage?

An indefinite shut-off of Russian gas supplies would effectively anticipate Italy’s independence from Moscow by nearly two years – Draghi’s plan has always been to wean the country off Russian gas by autumn 2024.

However, the Italian government’s strategy is (or, perhaps, was, as a new government is about to be formed) centred around a gradual phasing out of Russian supplies. As such, although not immediately problematic, a ‘cold-turkey’ scenario might create supply issues for Italy at some point during 2023.

READ ALSO: EXPLAINED: How much are energy prices rising in Italy this autumn?

Granted, Algeria, whose supplies currently make up 36 percent of Italy’s national demand, is expected to ramp up gas exports and provide Rome with nine billion cubic metres of gas in 2023.

But, even when combined with LNG supplies from several African partners – these should add up to a total of four billion cubic metres of gas in 2023 – there’s a risk that Algerian gas might not be able to replace Russian gas on its own.

An employee works at the Tunisian Sergaz company, that controls the Tunisian segment of the Trans-Mediterranean (Transmed) pipeline, through which natural gas flows from Algeria to Italy.

Algerian gas supplies, which reach Italy through the Trans-Med pipeline (pictured above), might not be enough to replace Russian gas in 2023. Photo by Fethi BELAID / AFP

Therefore, should an indefinite shut-off be the ultimate outcome of the current diplomatic incident between ENI, Austria’s Gas Connect and Russia’s Gazprom, Italy, this time in the person of new PM Giorgia Meloni, might have to close deals with other suppliers or ask existing suppliers to ramp up production.