Italians Head To Polls In Regional Vote That Could Topple The Government

Italians in Emiglia Romagna and Calabria are heading to the polls on Sunday to vote in critical local elections that could dramatically shift the balance of power in the Italian government, and possibly trigger the collapse of a fragile ruling coalition already showing signs of strain.

The candidate of the League-led center-right coalition is expected to win handily in Calabria, a stronghold in the conservative south, but if the League candidate manages to win the governorship in Emilia-Romagna, it would be a huge step for League leader Matteo Salvini as he plots his political comeback and seeks his revenge on his former partners, the Five Star Movement. For months, opinion polls have consistently shown that the far-right, anti-migrant League is the most popular political party in the country.

Readers outside Italy may or may not remember the circumstances surrounding the collapse of the last Italian government over the summer, but in any case, here’s a quick refresher. After weeks of intrigue, then-Five Star leader Luigi Di Maio outflanked League leader Matteo Salvini, his fellow co-deputy PM, and managed to form a new ruling coalition led by Five Star and the center-left Democratic Party, while banishing Salvini – whose decision to dissolve the government to try and rid himself of his Five-Star partners backfired in a big way – to the opposition.

Unfortunately for Di Maio, since Five Star Movement’s entire raison d’etre is based in the populist backlash to the technocratic political hacks who have been blamed for running Italy’s economy into the ground, the deal with the PD was a political liability from the very start, and has proved unpopular among supporters of both parties.

Courtesy of ANSA

But Salvini swore that he would end up back on top. During the ensuing months, Salvini relentlessly campaigning around the country, but especially in Emiglia Romagna, a region that is recognized as the birthplace of Italian socialism, and in contemporary times has been dominated by the center left.

The League triumphed in the region during the EU parliamentary elections in May, becoming the leading party with 34% of the vote to the PD’s 31%, and Salvini led the party to another historic upset in Umbria three months ago.

Lucia Bonaccini, the League candidate for governor of Emilia-Romagna, and Salvini

Sunday’s vote is being held one day after Di Maio resigned on Wednesday to try and stave off a crisis of leadership within the party. But if the PD loses control of Emilia-Romagna, its leadership might conclude that the partnership with Five Star is politically doomed, and that it would be better off abandoning the alliance, which would thrust the Italian government back into chaos.

If the government is dissolved and no new coalition can be formed, Italians will again head to the polls for another national vote.

“If the PD were to lose another regional bastion after Umbria three months ago, it may conclude that it would have more to lose from staying in alliance with the ever-weaker M5S than from risking new elections,” Berenberg Economics said on Friday via Al Jazeera.

Salvini has been non-stop campaigning in the region, posting videos of him eating regional delicacies like Parma ham and Parmesan cheese, prompting some to accuse him of overshadowing the League’s gubernatorial candidate, Lucia Borgonzoni. On Saturday, Salvini pushed the envelope even further by tweeting through the campaign’s ‘blackout’ period.

On Sunday, he tweeted a video of Borgonzoni casting her ballot and urged supporters to get out and vote.

Grande @BorgonzoniPres! Forza Amici
emiliani e romagnoli, c’è tempo fino alle 23, non fatevi sfuggire questa occasione di regalare un sorriso alla vostra Regione e a tutti gli italiani 🇮🇹 #oggivotoLega #BorgonzoniPresidente https://t.co/8np4ktEXUQ

— Matteo Salvini (@matteosalvinimi) January 26, 2020

https://platform.twitter.com/widgets.js

The last opinion polls published before the pre-election media blackout showed Salvini’s anti-immigrant, anti-European League neck-and-neck with the PD.

Italy, Tecnè poll:

LEGA-ID: 32%
PD-S&D: 20% (+1)
M5S-NI: 15%
FdI-ECR: 11%
FI-EPP: 8%

+/- vs. 10-17 Jan. ’20

Fieldwork: 19-20 January 2020
Sample size: 1,000
➤ https://t.co/yZmKw0FzEV pic.twitter.com/7hFTrk9yVv

— Europe Elects (@EuropeElects) January 22, 2020

https://platform.twitter.com/widgets.js

ANSA reports that as of noon in Italy (6 am in New York), turnout in both regions was higher than the last round of local votes in November 2014. But polls don’t close in the regional votes until 11 pm in Rome (about 5 pm in New York).

Of course, the vote should have important implications for Italian markets, and the euro. And if the League candidate wins both races, we suspect bondholders won’t be happy.