Italian Elections Rekindle Eurozone Crisis
Video Transcript:
Video Transcript:
General elections in Italy put the country on the brink of ungovernability. The center-left Democratic Party, led by Pier Luigi Bersani, gained control of the Chamber of Deputies but did not get a majority in the Senate. As both chambers have equal powers, it will be highly difficult to form a stable government.
Despite the victory of the Democratic Party, the key actor of the elections was the Five Star Movement, led by comedian Beppe Grillo. The party, which was created just over three years ago, received more than eight million votes for the Chamber of Deputies and became the largest party at the national level. Grillo's performance is explained by the complex social and political situation in Italy. The country is experiencing its worst recession in 20 years, and unemployment is above 11 percent. Moreover, many cases of corruption involving politicians from the mainstream parties tarnished the final stretch of the campaign. In this context, Grillo became the face and the voice of protest against traditional politicians.
In this regard, the performance of the Five Star Movement resembles the strong performance of Syriza in the Greek elections last year. Both parties won votes thanks to a strong criticism of the austerity measures proposed by Brussels and implemented by the mainstream parties. The electoral growth of these parties will probably inspire similar movements in other parts of Europe. As a result, the Italian elections also had international repercussions. Brussels and Berlin expressed their hope that the new Italian government respects the economic objectives set by the European Union. There is a fear at the EU level that popular rejection of austerity measures in Italy could lead Rome to move away from the policies that were designed by Brussels.
The situation in Italy is also a cause of concern particularly in Spain. Italy and Spain were at the center of the European financial crisis last year and only managed to stay afloat thanks to the political and financial support of the European Union. Madrid now fears that instability in Rome could open a new phase of uncertainty in international markets and a possible contagion to the rest of the eurozone.
With the future composition of the Italian parliament, the formation of a government will be extremely complex. Options include a minority government without control of the Senate, or an alliance between the center-left and the center-right. Either option would be highly unstable. A transitional government, in charge of modifying the electoral law, is also likely. In this context, the possibility of new elections is not ruled out. The elections in Italy have revealed a country that is not only going through an economic crisis but fundamentally a political crisis. Far from mitigating this crisis, the elections have only made it deeper.
