I confess I’m getting a bit sick of writing about Italy. It’s tempting to regard the whole thing as a sort of morality play that has dragged on for so long the audience are starting to get up and leave.

But as one of the world’s top ten economies Italy is more than just a curiosity; it affects all of us. If you’ve benefited from the last three days of sharemarket rises, one of the main things you have to thank is the re-election of Giorgio Napolitano as Italy’s president.

And now, as expected, the centre-left has completed the process of surrender that began with the presidential balloting. Following the departure of Pier Luigi Bersani, its deputy leader, Enrico Letta, has accepted Napolitano’s commission to try to form a government that will include the centre-right in a grand coalition.

So the high hopes with which the centre-left went into the election, just on two months ago, and even to some extent came out of it, have now come to this: being forced to rely on the votes of its arch-enemy, Silvio Berlusconi. No major reform, no co-operation with the populist 5-Star Movement, and of course no serious prospect of putting Berlusconi in jail.

Berlusconi has been saying for weeks now that he was willing to serve under a centre-left prime minister. The BBC now reports his party secretary warning “that his group would not take part in a government unconditionally,” but having made the offer it would be politically suicidal for the centre-right now to block a new government. Negotiations may take a few days, but expect Letta soon to take office as Italy’s new prime minister – its 26th since the founding of the republic.

Sometimes grand coalitions do work well for their leaders. Angela Merkel took office at the head of a Christian Democrat/Social Democrat coalition in Germany in 2005; the prestige of government was enough of a boost for her that after one term her party did well enough to be able to govern without the Social Democrats.

But the Italian situation is different, firstly because of the disarray the centre-left has displayed in recent weeks, but also because of the parliamentary position. In Germany, the opposition to the grand coalition was dispersed among three small parties; in Italy it will be concentrated in the 5-Star Movement.

This outcome is about the best that 5-Star leader Beppe Grillo could have hoped for. His party will now become the official opposition and the only alternative to what he will present, not entirely unfairly, as a corrupt bargain between the tired and discredited old parties. If his forces can hold together and present a credible front in parliament, they will have the most to look forward to at the next election.

Of course it’s not all bad; Letta, who is seen as a moderate within the Democratic Party (his uncle is apparently Berlusconi’s chief-of-staff), may provide the stability that Italy needs. But the unedifying spectacle of the last two months will linger in the memory for a long time.



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Peter Fray
Peter Fray
Editor-in-chief of Crikey