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POLITICS

Italy defiant after IMF slashes growth forecasts

The Italian government was defiant after IMF revised down GDP growth forecasts yesterday, saying Italy is a not a risk factor for the global economy - but the IMF's own policies are.

Italy defiant after IMF slashes growth forecasts
IMF Managing Director Christine Lagarde gives a press conference ahead of the World Economic Forum yesterday in Davos, Switzerland. Photo: Fabrice COFFRINI/AFP

The International Monetary Fund said it had revised down its 2019 GDP growth forecast for Italy 0.6 percent, down from the one percent it predicted in October

The prediction is in line with a similar reduction in forecast by the Bank of Italy last week.

“We have revised downwards our forecasts for advanced economies slightly, mainly due to downward revisions for the euro area,” the IMF said.

The IMF said Italy's financial situation was one of the biggest risk factors for the global economy.

“In Europe the Brexit cliffhanger continues, and the costly spillovers between sovereign and financial risk in Italy remain a threat,” the IMF said in an update of its World Economic Outlook.

READ ALSO: Italy must 'play by the rules' on budget: IMF chief

But the Italian government ministers hit back at the IMF's statement.

Italy is a not a risk factor for the global economy but the IMF's own policies are, Italy’s Finance Minister Giovanni Tria reportedly said.

Photo: AFP

His words were echoed by Italian Deputy Prime Minister and Interior Minister Matteo Salvini.

“Is Italy a threat and a risk for the global economy? On the contrary, the IMF is a threat to the worldwide economy, with its recent history of economic recipes featuring mistaken forecasts, few successes and many disasters,” Salvini told reporters in Rome.

Co- Deputy Prime Minister Luigi Di Maio said the International Monetary Fund's listing Italy and Brexit as global growth threats “does not discourage us” and there is “no turning back” on economic policy.

“The European Commission president has already replied to the IMF saying they were wrong to trust the IMF on Greece with austerity,” he said.

He said “there's no turning back” after the approval of the country’s new anti-austerity budget last week, which includes a revised welfare and pension system.

“We are creating a new welfare state: we're aren't turning back, vis-a-vis people who actually define Italy as one of the causes of the economic recession. We can't accept it…If they think they can discourage us with some figures they're wrong.”

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ITALIAN ELECTIONS

Italian elections: What’s the difference between a majority and ‘super majority’?

Italy's elections on Sunday are expected to produce a far-right government, but how big a majority will it have and what difference does this make? Here's what you need to know.

Italian elections: What's the difference between a majority and 'super majority'?

The right-wing alliance of parties led by Giorgia Meloni’s post-fascist Brothers of Italy is expected to win the September 25th general election by a landslide. 

In fact, the question many people have been asking for a while now is not whether the right will win, but by how much.

READ ALSO: Far-right Brothers of Italy eyes historic victory as Italy votes

The right-wing bloc, led by Meloni’s post-fascist Brothers of Italy and also including Matteo Salvini’s League and Silvio Berlusconi’s Forza Italia, is expected to easily win a big enough share of the vote to take a majority of the seats in both houses of parliament and form a government.

But will they win a simple majority or a ‘super majority’? Here’s a quick guide to how the system works, what the difference is, and why it matters so much.

What’s a simple majority?

A government with a simple majority has the support of just over half of either the Senate or the Lower House – so at least 201 seats in the House and 101 in the Senate (not counting the six senators for life).

Getting a large enough share of the vote to ensure this is already quite an achievement in Italy, where the electoral system is set up to favour coalition governments precisely in order to stop any one party from ending up with too much power (it was, after all, designed after WW2 and the fall of Mussolini’s Fascist regime).

READ ALSO: Is Brothers of Italy a ‘far right’ party?

So under this system, the party that takes the largest share of the vote still needs help – a coalition partner, or several – to get a majority of seats in parliament and form a workable government. This usually requires major compromise and sees parties striking difficult bargains with others from across the political spectrum.

This time, the right-wing alliance looks more than likely to win by a landslide and take a majority between them – in which case it won’t need to seek outside support.

Some political analysts predict that Meloni and Salvini’s parties will win enough seats to form a government on their own, without involving Berlusoni’s more moderate party. They might choose to join forces anyway – but the more parties involved, the less stable a government is.

And, with a smaller number of parties involved, it would basically be easier for a government to pass the laws it wants to pass. (That is of course discounting the still enormous potential for bickering and power plays between even just a few coalition partners.)

So what’s a super majority?

Known more officially in Italy as a maggioranza speciale o qualificate (special or qualified majority) a ‘super majority’ is a two-thirds majority of the seats in both houses of parliament.

The prospect of Italy’s right-wing parties reaching this threshold has been hotly discussed in the media, since a government with such a large majority would be able to make changes to the political system itself, and therefore the constitution, without consulting voters via a referendum.

EXPLAINED: Who’s who in Italy’s general election?

A political force achieving a majority large enough to change the constitution would be unprecedented in Italy’s postwar history, and could bring major changes to the country’s political system – including to how the president is elected, or the powers the prime minister has.

and right-wing parties Brothers of Italy (Fratelli d'Italia, FdI), the League (Lega) and Forza Italia at Piazza del Popolo in Rome, ahead of the September 25 general election.

Forza Italia leader Silvio Berlusconi (centre), set to return to government with Matteo Salvini and Giorgia Meloni. Will they be forming a governmnt together after this election? Photo by Alberto PIZZOLI / AFP

All three leaders of the right-wing alliance have called for Italy to adopt a ‘French-style’ system which would mean the president is directly elected by voters,, instead of by lawmakers as is currently the case. This would mean changing the constitution.

Which scenario is likely?

If the most recent polls are to be believed, the right is on course to easily win a simple majority and possibly go on to reach the two-thirds threshold.

Talk of a super majority came about as the last polls (published two weeks before election day, when a polling blackout began) showed the right-wing alliance was just two or three percent away from achieving the share of the vote needed to give it a ‘super’ or qualified majority of the seats in both houses of parliament.

The right was polling 19 percent ahead of the centre-left bloc, and will need a lead of at least 21-22 percent to secure a qualified majority in both houses, according to projections by Youtrend/CattaneoZanetto & Co.

READ ALSO: An introductory guide to the Italian political system

A two-thirds majority is “possible” for the center-right “if the advantage in both chambers is around 21-22 percent,” Youtrend’s analysis explains.

Such a majority then becomes “probable” with “an advantage over the center-left of more than + 26 percent”, it says.

The winning alliance will need a majority in both houses of parliament, the Chamber of Deputies and Senate, and taking a majority in the Senate is forecast to be more of a challenge.

Recent reforms mean parliament has shrunk by a third: there will now be 400 MPs in the Chamber instead of up to 630, and 200 Senators instead of 315.

A view of the Italian Chamber of Deputies.

Following constitutional reform in 2020, the number of deputies will go from 630 to 400 in the upcoming elections. Photo by Yara NARDI / AFP

Italy has a fiendishly complicated hybrid voting system: about 36 percent of seats in both houses of parliament are allocated in a first-past-the-post vote in single-member constituencies, while the rest are elected by proportional representation via party lists of candidates.

If you want to see what this looks like, try out Sky TG24’s seggiometro, or ‘seatometer’, which allows you to visualise how different election results would translate to seats in parliament.

Is there any chance of a surprise result?

This definitely hasn’t been an election campaign that has kept us on the edge of our seats. The right-wing bloc led by Giorgia Meloni has been expected to win all along – but voter sentiment has apparently shifted somewhat in the two weeks since polling blackout began.

Since the publication of opinion polls ended, support for the left-leaning Five Star Movement appears to have surged while the hard-right League is flagging, according to pollsters interviewed by Reuters this week.

Most said the prediction that the right will take a majority in both houses of parliament and form the next government remains by far the most likely outcome, even if it has been thrown into doubt somewhat by Five Star’s rise.

With Italy’s famously unpredictable politics, and many voters expected to make their minds up only on the day itself, nothing can ever really be ruled out.

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