Italy, a new "operation Monti" in sight?

As is well known, our Italian neighbours have already carried out a full-scale "ripartenza" of their country as a way of trying to recover the normality that existed before the arrival of the coronavirus, but it is becoming increasingly clear that such a return to the situation that began three months ago is going to be more than costly. So much so that a change of government is increasingly foreseeable, not only to deal with the second part of the legislature that began in April 2018, but above all to be able to alleviate the tremendous effects of having paralyzed much of the country for so long. Let's not forget that the transalpine economy was not exactly doing well before the epidemic began, as its Gross Domestic Product had fallen by -0.3% in the last quarter of 2019, a figure that will be worsened very substantially over the coming months. So much so that the fall in GDP forecast for 2020 could be more than eleven negative points, doubling the worst figure known this century, which was in 2009 (-5.3%).

In this sense, it seems clear that, in a parliamentary system like Italy's, in order to carry out a complete reform agenda with far-reaching measures, a large majority is needed in both legislative chambers. But the reality is that neither the current government coalition (Five Stars Movement, PD, Italia Viva and LeU), nor the alternative coalition (the centre-right), have at this time even an absolute majority (even if only a minimal one) in the Senate, which is the key chamber for political stability. In fact, if the second Conte government, born in September last year, is still standing, it is not only because the small party of former Prime Minister Renzi continues to support it, but also because the centre-right does not have sufficient support to overthrow the Executive through a motion of censure. And calling early elections is something that is not contemplated either, since it would mean putting the presidency of the Council of Ministers on a plate to the Lega de Salvini, with which anti-Europeanism would prevail in Italian political life, making the remedy worse than the disease.

Thus, the matter remains in the hands of the President of the Republic, Sergio Mattarella, to whom the Constitution grants the right both to dissolve chambers and to call elections, and to commission the formation of a government. And Mattarella knows better than anyone else that the situation the country is now experiencing is reminiscent of 2011, when the former head of state and now senator for life Napolitano had to demand that Berlusconi resign to appoint a non-political government headed by the prestigious economist Mario Monti. This was the third time in less than two decades that he had resorted to a non-political government, after the Ciampi government (1993-94) and the Dini government (1995-96).

On that occasion, Monti's presidential appointment took place in mid-November 2011, but the question is whether the country will be able to wait half a year until this event takes place. It should be noted that the macroeconomic picture is now significantly worse than nine years ago: if at that time the country ended up growing by 0.7%, this year the drop of ten points minimum seems inevitable; and if the national debt in 2011 was 119.7% of national GDP, already 2019 ended with 134.8% and the EU authorities have estimated that this same debt could go in 2020 to 159%, a really worrying figure that would also mortgage the future of the new generations of Italians. As it is known, the most drastic measure taken by the Monti government (November 2011-April 2013) was the approval of the so-called Fornero Law, by which the retirement age was delayed to 67 years of age (the labour reform was postponed until the Renzi government had it approved in December 2014). This did not prevent that in the whole year 2012 (the only complete year under the Monti government) the debt continued to increase (it went to 126.5% of the national GDP) nor that the country continued to be plunged into a strong recession (the economy decreased by -3.0%). 

But the most worrying thing of all is that the data that are coming in are more than worrying: the last one we have known is that only between two countries (Spain and Italy) almost half of the employment in the Eurozone has been lost (46%, to be exact). Now, while waiting for the summer to improve these frightening figures and for aid to arrive in the European Union, the President of the Republic has to think about forming a new Executive, called by some "of national unity", with which to face up to a very hard recession that the Second Conte Government, very weak in many ways, will most probably not be able to overcome. In this sense, some media have already reported that Mattarella has already set up a working group, which includes both businessmen and economists of the highest prestige, to design the new economic and social agenda with which to try to get out of a situation certainly not experienced since the post-war world. With the difference that now there is not going to be a "Marshall Plan" in the way, but rather Community aid that will arrive under strong demands of reducing public spending.

We have already commented on more than one occasion that in the mind of Mattarella, a man with a great deal of experience in high politics, the former Governor of the Bank of Italy and former President of the European Central Bank (ECB), Mario Draghi, who until the start of the coronavirus epidemic led all the football pools to become the next President of the Republic, but who may have to give it up to take over the presidency of the Council of Ministers, will surely come first. Let's think that, within the political arch, Mattarella does not have any major politician: Salvini does not count as an anti-European, Renzi does not count either because he has a very low level of support among the Italian population and Conte is the same because, despite being highly valued by the Italians, he does not control the party that made him Prime Minister (the Five Star Movement). And, since he is not resorting to a politician, Monti is already in retreat (besides having been very touched by his time as "premier") and the man he already resorted to for a possible non-political government in May 2018 (the ex-economist-head of the IMF Cottarelli) does not have enough pull or presence among Italians, in front of a Draghi who is by far the most prestigious figure both nationally and internationally that Italy has. 

We will see how long the second Conte government holds out and when Mattarella makes the key moves: in the case of Monti in 2011, the first thing President Napolitano did was to appoint him as a senator for life and then commission him to form a government. But what does seem increasingly clear is that, given the extent of the recession that the country will have to face, and with almost three years of legislature ahead of it (this is due to end in March 2023), a new "Operation Monti" must already be under negotiation to give the clear, strong and forceful impetus that a country of Italy's importance needs.

Pablo Martín de Santa Olalla Saludes is Senior Researcher at the Civics Foundation and author of the book Italia, 2013-2018. Del caos a la esperanza (Liber Factory, 2018).