The Italian Election 2018 is just few days away. Who are the key candidates & how EUR can be affected?
The Italian election is due to be held this coming Sunday, 4th of March 2018 and Italians are preparing to choose a new Parliament and Prime Minister.
Italy is not well-known for its political stability given the fact that it has had more than 60 governments and numerous prime ministers since World War II.
This coming Sunday, voters will elect 630 members of the Camera dei Deputati (lower chamber) and 315 of the Camera del Senato (the Senate/upper house).
Who are the key candidates in the Italian general election 2018?
The three main political heads running for the position of the Prime Minster are: –
-Silvio Berlusconi, former prime minister and head of Forza Italia
– Former Prime Minister Matteo Renzi, the embattled leader of the center-left Democratic Party (PD),
-Luigi Di Maio, the anti-establishment 5 Star Movement’s (M5S) leader.
As the opinion polls leading up to March 4th election, indicated that a hung parliament was highly likely, the parties have formed coalition alliances ahead of the vote.
With dozens of parties running for seats, odds are that the vote numbers will be highly uneven, with no individual party gaining sufficient support to take a majority of seats. For this reason, a hung parliament or coalition government are the most likely outcomes. This of course, makes it difficult to predict who will emerge as prime minister, given the fact that many parties have not yet named an official candidate for the position. The reason for doing so is behind the understanding that naming the official candidate is something may need to be negotiated when forming a coalition (the premiership needs to be voted in by the newly elected senators and representatives, in conjunction with the Italian president).
Opinion polls suggest that this year’s vote will be split between three main groups:
- Centre-left coalition
- Centre-right coalition
- Five Star Movement (M5S)
This coalition consists of parties that r follow moderate left-wing policies. The main party in this group is currently the Democratic Party (PD) led by former Prime Minister Matteo Renzi, and it aims in creating additional jobs, keeping Italy within the EU, increasing investment in education and training, and maintaining a relatively soft approach to immigration.
Possible contenders for Prime Minister:
• Paolo Gentiloni (Italy’s current prime minister)
• Marco Minniti (interior minister)
• Carlo Calenda (minister of economic development)
The centre-right coalition is made up of parties that follow moderate right-wing policies. Its main two parties are Forza Italia (FI) and North League (LN). The coalition aims to introduce a flat rate of tax, end EU austerity programs and revise European treaties, as well as to create new jobs and repatriate illegal immigrants. However,it is divided on whether Italy should remain part of the euro and keep its budget deficit within EU limits. The coalition is led by Silvio Berlusconi (leader of Forza Italia), who is currently banned from office due to a tax fraud conviction, which is under review at the European Court of Human Rights. In his absence, the parties have agreed that whoever wins the most votes should nominate the prime minister.
Possible contenders for prime minister:
• Leonardo Gallitelli (a former commander-in-chief of the army)
• Antonio Tajani (president of the European Parliament)
• Matteo Salvini (leader of the North League)
Five Star Movement (M5S)
The Five Star Movement is an anti-establishment and moderate Eurosceptic party led by 31-year-old Luigi Di Maio.The party promises direct democracy and allows its members to choose policies (and leaders) through an online system called Rousseau. Key policies are to reduce taxation and immigration, change banking regulations to protect citizens’ savings and end European austerity measures to improve investment in infrastructure and educationThe party leader has commented that he may propose leaving the euro as a last resort, if the EU does not accept reforms that allow Italy to implement this program.
Prime minister candidate:
• Luigi Di Maio (vice president of the Chamber of Deputies) has been confirmed as M5S’s candidate for the premiership
How may the Italian election affect the Euro?
The economy and immigration issues are the main topics of argument this year, due to the 2015 migrant crisis that saw Italy become a spot for new arrivals from the Mediterranean.
In case that no one party or coalition has a majority to form a government, the Italian President, Sergio Mattarella, will need to call on parties to form a broader collation of pre-election adversaries, leading towards a lengthy coalition talks or even more elections.
Furthermore, the election will take place under a new voting system that was introduced just last year, making the outcome particularly uncertain.
If as a result of the elections, Italy ends up with a hung parliament, it may undermine trader’s confidence in the country’s future economic direction, as well as policies. On the other hand, if a single party or a coalition gain majority, it may leads towards higher confidence.
The euro is likely to be affected with the election, leading towards increased volatility, , given the threat of political instability and the popularity of several Eurosceptic parties. It could, however, strengthen if Italy appears ready to elect a pro-Europe centre-left majority, or weaken if a Eurosceptic coalition appears poised to take power. It is highly advised to watch euro pairs such as, EUR/USD and EUR/GBP, in order not to be surprised by the news.
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