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Constitutional Crisis in Italy as President Rejects Eurosceptic Minister

There may be another vote in Italy after all, or there may be impeachment of the Italian President.

Efforts to form a coalition government collapsed on Sunday after the Italian president rejected a eurosceptic pick for the key economy ministry, triggering a possible constitutional crisis and opening the prospect of fresh elections.

The leaders of the two parties trying to field a government, the far-right League and anti-establishment 5-Star Movement, accused President Sergio Mattarella of abusing his authority and working under the orders of European powers.

5-Star leader Luigi Di Maio, whose party won the most seats at an inconclusive March 4 vote, demanded that parliament impeach Mattarella, raising the spectre of political turmoil in the eurozone's third biggest economy.

Looking to allay investor concerns, Mattarella vetoed on Sunday the choice of 81-year-old economist Paolo Savona, a vocal critic of the single currency, to the pivotal economy post. Prime Minister-designate Giuseppe Conte promptly abandoned his efforts to form a government.

In a sombre, televised speech, Mattarella said he had accepted all the suggested ministers bar Savona. "I asked for that ministry an authoritative political figure from the coalition parties who was not seen as the supporter of a line that could provoke Italy's exit from the euro," he said.

Shortly afterwards, he summoned former International Monetary Fund (IMF) senior official Carlo Cottarelli for a Monday morning meeting -- an indication he may be considering asking him to head a government of unelected technocrats.

Polls have suggested that the League, which won 17 percent of the vote in March, would see its support surge in any early ballot, while support for 5-Star remained strong.

News of Mattarella's veto sent a shockwave through Italy.

The leader of the nationalist Brothers of Italy party, which had an electoral pact with the League, said the head of state should be impeached, accusing him of abusing his position.

"We will ask parliament to charge Mattarella with high-treason because he has acted under foreign pressure," Brothers of Italy chief Giorgia Meloni said on La7 television channel.

The 5-Star's Di Maio also demanded impeachment under article 90 of the constitution. Under that clause, parliament can demand a president leave office if a simple majority of lawmakers votes in favour. The constitutional court would then be called to decide whether to impeach or not.

In Sunday's statement Savona did not mention his opinions on the euro, but more than 70 slides outlining a "plan B" for Italy's exit from the euro, co-authored by Savona in 2015 with a dozen others, circulated on social media.

According to Reuters, Salvini told followers on Facebook: “It won’t be an election, it will be a referendum between Italy and those on the outside who want us to be a servile, enslaved nation on our knees.”

Rolling the Dice

If Mattarella puts in a technocrat PM from the IMF it is certain the pick will be immediately tossed aside in a vote of no confidence. That would mean new elections, but it is up to the president to call them. Would he?

Meanwhile, impeachment is still on the table.

If there are new elections, it is reasonably clear that the Northern League will pick up votes. But it is unclear if the center-right would get an outright majority which strangely is 40%.

If the center-right prevailed, then Italy would immediately have a eurosceptic prime minister, assuming of course Mattarella would go along with it.

Yet, that does not quite seal the fate as we do not know what position Silvio Berlusconi may take if indeed there is a center-right majority.

Mattarella has elected to roll the dice, but he needs an amazing amount of luck (and no impeachment) to say the least.

Mike "Mish" Shedlock

I = V - O, Italy is Venezuela without oil.

The biggest enemy of Europe is the European Commision.

No it isn't. Stop writing stupid nonsense.

They do appear to make many political misjudgements. Handle some things in a very hamfisted fashion. This re-election at least gives them breathing space to decide what to do and hope it runs out of steam before showdown.

What a dumb mistake I made; thanks for catching it: I=8V-O, Italy's GDP is eight times Venezuela's, but without the oil.

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