Italy Veers Toward Political Chaos After President Blocks Right-Wing Coalition

Luigi Di Maio, head of the Five Star Movement.

When Italy went to the polls in March, much of the country endorsed the sort of right-wing populism that has swept across Europe. Two anti-establishment, anti-immigrant parties performed particularly well, with Five Star capturing 33 percent of the vote and the League 17 percent. In a pattern that has become familiar across the continent, Italy’s center-left forces — including the incumbent prime minister, Matteo Renzi — lost support all over the country.

But on Sunday, the grinding attempt to form a governing coalition between Five Star and the League came to an abrupt end when Italian president Sergio Mattarella blocked the appointment of the groups’ favored finance minister because of his overt skepticism toward the euro. The move further muddies the country’s never-exactly-pristine political landscape.

Mattarella, the Italian president, nixed the appointment of Paolo Savona, an 81-year-old economist who has expressed considerable skepticism about keeping Italy in the single currency, a stance that had rattled markets.

“The uncertainty over our position in the euro alarmed Italian and foreign investors who invested in shares and companies,” Mattarella said.

Because Five Star and the League would not part with Savona, the designated prime minister in charge of forging a coalition between the two parties gave up on his efforts.

Mattarella then appointed Carlo Cottarelli, a former executive at the International Monetary Fund, and exactly the kind of establishment figure loathed by so much of the Italian populace, to form a new, interim government. (Italy has now been without a government for 83 days, the longest stretch since World War II.)

The response to these maneuvers was predictable and understandable: Five Star and the League attacked them as abuses of power that thwarted the will of the people.

“Italy is not a colony, we are not slaves of the Germans, the French … or finance,” League leader Matteo Salvini said, referring to the two most powerful European Union countries.

“I call on citizens to mobilize, make yourselves heard, it’s important that you do it now,” said Five Star head Luigi Di Maio, who is planning for a major June 2 protest in Rome. Di Maio has also called for Mattarella’s impeachment.

With the entire political system at an impasse, Five Star and the League are taking the opportunity not only to stir up public anger, but to push for a new general election in the fall. If such a contest happens, it may well end up as a de facto referendum on the euro — a prospect that would spook markets much more than the appointment of any minister, given the odds that Euroskeptic forces would likely perform even better than they did in March. In the end, Mattarella’s effort to calm European allies may only embolden an even more adversarial approach toward the continent.

With the U.K. set to leave the European Union and Poland and Hungary transformed into illiberal states, the E.U. is already facing plenty of existential challenges. The political chaos in the bloc’s fourth-largest economy may just be the most urgent one yet.

Italy in Gridlock After President Blocks Coalition