December 2016

By Gabriella Ippolito

On December 4, 2016, Austria and Italy each held electoral exercises which had strikingly different outcomes and were seen as gauges of the strength of Europe’s populist and far right political parties.

In Austria, and seemingly breaking with 2016's anti-establishment trend, the country elected Independent party candidate Alexander Van der Bellen as president with 53.3 percent of the vote. Mr. Van der Bellen’s support for Austria’s European Union membership and immigrant integration stood in stark contrast to his more populist-oriented opponent, Norbert Hofer of the far right-wing Freedom Party, whose campaign was marked by calls for significantly limiting migration and refugees and a marked concern for Islamist terrorism in Europe.

In Italy, however, a constitutional referendum supported by Prime Minister Matteo Renzi and his Democratic Party failed after voters overwhelmingly rejected it. At 70 percent, turnout for the vote was higher than usual, with 60 percent voting against the referendum. While polls had shown that Prime Minister Renzi’s reform proposals would likely fail, the margin of the loss and the electorate’s apparent decisiveness surprised many observers.

Mr. Renzi, who had during the campaign stated his intention to resign if the referendum failed, remained in office until December 7, per Italian President Sergio Mattarella’s request, so that the country’s budget could pass in the Parliament.

Subsequently, President Mattarella announced that he would open consultations with each of the Italian political parties on December 8. He appointed a new prime minister on December 11, Paolo Gentiloni, who had served as Foreign Minister under Mr. Renzi. Mr. Gentiloni now has the responsibility of creating a new government, which will draft a new electoral law leading to elections that will likely take place in spring 2017. The new government should be formed in the coming weeks; it is thought that it will resemble Mr. Renzi's as Mr. Gentiloni also belongs to the Democratic Party which remains the largest party in the Congress.

President Mattarella did not call for snap elections. Rather, he said that he is in favor of stability and of a regulated electoral process and announced on December 5 that the Constitutional Court must rule on the existing voting law prior to elections. This ruling is not expected until late January thus making elections prior to April 2017 virtually impossible, given Italy’s legally-mandated 45-day campaigning period.

Italy's vocal opposition parties, most notably the populist Five Star Movement and the right-wing Northern League, called for snap elections and a non-binding plebiscite on Italy’s euro membership. They are now saying that they will ask for a confidence vote on Mr. Gentiloni in the coming days. If snap elections were held, the Five Star Movement would likely become the largest party in the Italian Parliament. The Northern League leader, Matteo Salvini, has threatened street protests if an election date is not announced soon. Both parties are against the Eurozone and in favor of strictly curtailing the mass immigration which Italy has experienced in recent years.

This political uncertainty in Italy has shaken its already weak economy. In recent years, Italy’s banks have been a cause for concern and its most troubled bank and the country’s third largest, Monte dei Paschi di Siena, may be in need of a bailout loan shortly. In this dynamic environment, these economic concerns reinforce a growing need for increased political stability in the country.