It's Luigi Di Maio of the Five Star Movement, Not the League's Matteo Salvini, Who is the Real Power

Well, the technocratic government of Carlo Cottarelli, the one president Sergio Mattarella blessed after tomahawking the M5S-League combine, is being hastily and quietly dismissed. The negative reaction of the divine market quickly made it apparent to Mattarella that he had blundered enormously. Cottarelli would not survive a confidence vote, and it would be back to the campaign hustings as early as July. Matteo Salvini of the League and Luigi Di Maio of the Five Star Movement (M5S) would pad their parliamentary majority.

So Salvini and Di Maio are back to negotiating with Mattarella. The deal, depending on where you read about it, involves getting rid of Paolo Savona as minister of the economy. The Guardian reports that

The leader of the Italian far-right party the League, Matteo Salvini, has cancelled political rallies to return to Rome, in what was seen as a sign that a political impasse that has left the country without a fully functioning government for months may soon be coming to an end.

Salvini was heading back to the capital to meet his coalition partner, Luigi Di Maio, the head of the anti-establishment Five Star Movement, after the Italian president, Sergio Mattarella, gave the pair more time to form a government.

Italian press reports indicated that any agreement to form a new populist government involving the League, formerly known as the Northern League, and M5S would include the nomination – again – of Giuseppe Conte, a formerly obscure law professor, to serve as prime minister.

But Di Maio and Salvini are expected to back down on their earlier insistence that Paolo Savona, a Eurosceptic who has called Italy’s adoption of the euro a “historic mistake”, should serve as finance minister.

The odious Jason Horowitz, writing for The New York Times, sees another element to the bargain. Not only is Savona out, but so too is Conte:

But simultaneous negotiations with the Five Star Movement seemed to center on a top official in his party, Giancarlo Giorgetti, taking the position of prime minister. Some analysts speculated that Mr. Salvini coveted the position himself, and that he had the leverage of Mr. Savona, and his own popularity, to force the Five Star leadership to accept.

The Five Star Movement, reluctant to give up its primacy in the alliance, after winning nearly a third of the Italian vote, is resisting, according to reports in the Italian press. And Mr. Mattarella, who is very much an audience of one for all of the political performances, would also have to sign off.

It appears that Di Maio has the upper hand here. While Salvini has been strutting and preening, Di Maio has been trying to salvage the nascent M5S-League government. His reasonableness is conveyed by the Guardian quote,

Di Maio said that if a deal could not be reached, he favoured snap elections. “There are two paths ahead. Either we launch the Conte government with a reasonable solution or we vote right away,” he said.

For all the talk that Salvini is surging, I would not rule out M5S as the party on the rise. Di Maio has displayed his prowess.

"Italian Voters! Achtung! We're Doing You a Favor by Not Honoring the Results of This Election."

UPDATE: Succinct statement on Italy's political crisis lifted from the comments section of this morning's post, "Italy’s Political Crisis….How Ugly Might It Get?," by Yves Smith:

Please take the time, if you will, to ponder on article 1 of the Italian Constitution, and tell me how 25% unemployment, a majority without government, a government without majority, the fifth unelected prime minister in 5 years and street protests against the Head of State square with this:

Italy is a democratic Republic founded on labour. Sovereignty belongs to the people and is exercised by the people in the forms and within the limits of the Constitution.

****

I read the headline in the airport "Populist Parties in Italy Fail to Form Government," and I was confused. I had been away from newspapers and television news over the weekend. Last I heard the M5S-League government was on its way to a successful launch. Maybe there had been a last second dust-up between Salvini and Di Maio over the choice of Paolo Savona, an academic who has questioned the wisdom of the euro, as minister of the economy.

But that was not the case. Reading the story by the odious Jason Horowitz, it was apparent that the headline was one of the more misleading in a seemingly daily grab bag of misleading headlines. The populist parties did not fail to form a government. President Sergio Mattarella tomahawked the infant government as it was exiting the birth canal.

In this he did the bidding of the banks, the member states of the European Union, as well as the mainstream press. All had been calling for Mattarella to crush the M5S-League upstarts. They got their wish. Even better for the neoliberal center, Mattarella asked a former International Monetary Fund bureaucrat to form a new government.

As Jason Horowitz reports today in story with a much more accurate headline, "Italian President’s Loyalty to the Euro Creates Chaos":

On Monday morning, as markets rose and fell with the whiplashing events in Italy, Mr. Mattarella gave a new mandate to form a government to Carlo Cottarelli, a respected economist, former International Monetary Fund official and Italian government appointee, who told reporters that he would form a caretaker government only with the goal of passing a budget and guiding Italy to new elections.

If Parliament votes in support of his caretaker government, elections would take place in early 2019. If it does not, which seems much more likely, he would quit “immediately” and elections would take place sometime after August.

RT reports that there is zero chance that Cottarelli's technocratic government will be supported in parliament:

Italian journalist Marcello Foa told RT that Cottarelli’s chances of forming a new government are “non-existent,”noting that the anti-establishment Five Star Movement (M5S) and its rightist coalition ally Lega Nord are unlikely to support Cottarelli’s efforts because they would then “lose all credibility with the voters.” The two parties were the top performers in March’s parliamentary elections and have spent the last two months negotiating the formation of a coalition government.

Yanis Varoufakis appears on the mark with his dissection: "President Mattarella of Italy: From moral drift to tactical blunder":

Beyond his moral drift (as he condones Mr Salvini’s industrial-scale misanthropy while vetoing a legitimate concern about the eurozone’s capacity to let Italy breathe in its midst), President Mattarella has made a major tactical blunder.

In short, he fell right into Mr Salvini’s trap. The formation of another ‘technical’ government, under a former IMF apparatchik, is a fantastic gift to Mr Salvini.

Mr Salvini is secretly salivating at the thought of another election – one that he will fight not as the misanthropic, divisive populist that he is but as the defender of democracy against the Deep Establishment. Already last night he scaled the high moral with the stirring words: “Italy is not a colony, we are not slaves of the Germans, the French, the spread or finance.”

If Mr Mattarella takes solace from the fact that previous Italian Presidents managed to put in place technical governments that did the establishment’s job (so ‘successfully’ that the country’s political centre was destroyed), he is very badly mistaken. This time around he, unlike his predecessors, has no parliamentary majority to pass a budget or indeed to give his government a vote of confidence. Thus, he is forced to go into elections that, courtesy of his moral drift and tactical incompetence, will return an even stronger majority for 5S-Lega, possibly in alliance with the enfeebled Forza Italia of Silvio Berlusconi.

And then what Mr Mattarella? 

For a sample of how the mainstream is spinning Mattarella's radical move, take a look at "What Comes Next for Italy?" by Beppe Severgnini, editor in chief of Corriere della Sera’s magazine 7:

Right or wrong, the financial markets and the rest of Europe were convinced that the proposed government was a fundamental threat; now that it has been sidetracked, they will do what they can to prevent its return.

[snip]

It sounds naïve to say it, but the real winners here are Italy’s voters. Thanks to their coolheaded president, they have a chance to rethink their answers to a very important question. By voting for the League and Five Star, they set Italy on a collision course with the European Union. British voters made a similarly emotional decision to leave the union, and they don’t get a second chance. Italy should consider itself lucky: A solid Constitution is better than a rushed referendum.

This is how the radical neoliberal center paves the way for fascism -- "Voters! Achtung! We're doing you a favor by not honoring the results of this election."