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OP-ED: Italy’s General Elections Should International Investors and Partners be Worried?

By Fernando Napolitano


Forty-seven million Italians are eligible to cast their vote on September 25. Should

international investors and partners be worried about a possible center-right coalition? A

fact-based perspective on Italian politics says they should not.



Forty-seven million Italians are eligible to cast their vote on September 25. Should international investors and partners be worried about a possible center-right coalition? A fact-based perspective on Italian politics says they should not.


Italy’s politics is haunted by its historical legacies, fascism and communism. Because it is not frankly addressed, these internalized and metabolized opposites impede the development of a modern national identity and the imagining of a new and better future.


Italy was fascist for 20 years from 1922 to 1942. In contrast, for 41 years, from1948 through the fall of the Berlin wall in 1989, the Italian Communist Party was the strongest in the West. Directly backed by the Soviet Union, it achieved 34% of the votes in 1976.


PCI Poster from 1948


For over a century this contrast has been one of the central tensions in world politics. Italians, by and large, have yet to come to terms with these facts, yet they are expressed at the polling station. At every electoral turn, the opponent is reprimanded with this uncomfortable past and the implications of this denial are manifold. Italy’s political human capital is either unwilling or incapable of breaking that vice-like grip, or sees it as an opportunity. Political parties are stalled in this self-inflicted backward-looking limbo and have not developed credible alternative political visions to move on.


Because of this deficit, people are incrementally deserting elections. Polls estimate a rate of 35% of abstention on September 25. It was 27% in 2018 and 13% in 1994. The 5-star movement, whose ideologue leader is a stand-up comedian, built on this social disappointment and visionless future. Mr. Beppe Grillo leveraged the inability of traditional parties to be competent intermediators between the forces of globalized capital and the general well-being of the population, and their failure to lead toward an appealing future. In 2018, his movement conquered 30% of the vote, becoming the largest political force in parliament and the only western democracy with a populist party in power. By any measure, this was a ruinous experience. Today, the pollster YouTrend attributes 10% of the vote to this movement.


Beppe Grillo


Mario Draghi, former head of the European Central Bank (ECB), took office as Prime Minister on February 13, 2021 backed by all political parties but one, the right to the center Fratelli d’Italia led by Ms. Giorgia Meloni. The Italian constitution allows a non-elected Italian citizen to be appointed Prime Minister by the President of the Republic. This provision, since 1948, enabled a number of civil society’s competent personalities to lead the country in difficult times.


Mr. Draghi is unquestionably the most famous of all. In July 2012, as President of the ECB, he indicated that the bank would do "everything necessary" to save the euro from any speculation. His “Whatever it takes” is now iconic. Mr. Draghi's premiership was necessary to lead the country out of the pandemic and to ensure the allocation to Italy of its share of the €750 billion European Next Generation EU (NGEU) fund that provides financial support to recover from COVID-19. Italy has the largest share of any EU country, at €235 billion. To put this amount into perspective, the US Marshall plan distributed US$ 160 billion (in 2022 dollars) to sixteen countries between 1948 and 1951. Those NGEU funds are conditional and will be allocated only if Italy implements key structural economic and social reforms up to 2027. Mr. Draghi, not without some errors and missteps, has delivered.


Mario Draghi


The Russian invasion of Ukraine presents sudden and potentially severe energy challenges and a possible economic recession. That made Draghi’s leadership reassuring, both for the public and for the country’s creditors. Italy’s public debt is 159% of GDP, the 6th largest in the world and the 3rd largest among liberal democracies after Japan and Greece.


According to the Italian Central Bank, since 2021, some 28% of Italian debt is owned by foreign institutions, making its servicing particularly challenging in times of crisis. This level of debt, naturally, makes Italy attractive to speculators in a time of transition such as now. For that and other reasons, the departure of Mr. Draghi is unfortunate. In any case, the natural end of the current legislature in March 2023, is the longest he could have remained in power. So, Italy and its creditors were destined to face a post-Draghi environment, since Mr. Draghi never declared political ambitions.



Anti-War Protesters


The Italian voting system, largely proportional, forces political parties to create alliances. Currently, center-right and center-left coalitions battle for the premiership. Within the center-right, polls indicate that Ms. Meloni leads with 24% of the votes. The North League follows with 13% and Berlusconi’s Forza Italia is at 8%. In such a scenario, Ms. Meloni has a robust chance of becoming the first woman Prime Minister. She was born in 1977 and served as Minister for Youth in Berlusconi’s government. Previously she served as deputy Chairperson of the lower house.


Giorgia Meloni


The opponent center-left leader is Mr. Enrico Letta (born 1966), a soft-spoken politician. He was formerly Italy’s and Europe’s member of parliament, Minister of Industrial Development and Prime Minister. He is known and respected within the transatlantic political and business circles. His center-left positioning implies a partnership with left-to-the-left parties collecting 29% of the votes, according to the polls.


In the center, there are two other young leaders, Mr. Matteo Renzi (born 1975) and Mr. Carlo Calenda (born 1973). The former has been Prime Minister and the latter the Minister of Industrial Development. Both were former members of Enrico Letta’s political party. Polls attribute north of 6% to this third coalition.


Enrico Lette


Giuliano Amato, who among other prestigious appointments was Prime Minister and is current President of Italy’s Supreme Court, declared two weeks ago: “In a post-modern technology world, the true has been replaced with the likely. Opinions are formed on shreds of truth … I cannot fail to note that, for the reasons that led to the end of the great aggregators replacing them with others based on ideologies and extremisms that divide rather than unite, politics is not equipped for the enormous task we have in front of us."


Giuliano Amato



For a country that is aging, having a group of relatively young leaders competing for the premiership is refreshing and potentially dynamic and forward looking. To now, the political leaders of the western democracies, and Italy is no exception, appear not to be equipped to tame the daunting challenges of modern times. Particularly in the face of these unique challenges, our politicians should be surrounded, supported and advised by the best human talent available. However, over the last thirty years, the private sector has attracted the bulk of the available pool of talent. From that, it has built unprecedented financial, economic and geo-political strength and understanding, leaving politics at the margins.


The danger is that the deficiency of that depth of deep skills needed to steer towards prosperity cedes reasoned equanimity to populism. Fortunately, while flamboyant promises, hyperbole, and revolutionary stances to subvert the status quo are part of the electoral campaign rhetoric, there are a number of safeguards that will ensure an orderly transition of power with limited leeway, if at all, for extravagant policies. As in the past, these safeguards, will prevent any doomsday scenario of an Italian bankruptcy or, worse, the end of its democracy.


Elections are won by a coalition and are not constitutionally engineered to elect a Prime Minister. People elect the members of the lower and upper houses. With a clear winning coalition, it is the President of the Republic that appoints one of its leaders to form the government. The President must then approve the list of cabinet Ministers proposed by the Prime Minister to-be. The last two Presidents, Giorgio Napolitano and Sergio Mattarella, have been resolute in utilizing this constitutional provision in refusing to approve the ascent to Minister of individuals, who they evaluated as unquestionably unqualified for the job. This is particularly true when it comes to the appointment of the Minister of Economy & Finances (MEF).



Mario Draghi & Sergio Mattarella


Importantly, once in charge, a Prime Minister cannot fire any of the Ministers. The MEF remains a solid institution in terms of human capital and capability, and is well aware of its prerogatives. Under any government, the MEF has firmly withstood political pressures for policies and expenses that had no financial coverage. The MEF is the zealous custodian of the quality of Italy’s debt and the sole interlocutor for creditors and lenders. Italy’s yearly debt renewal is on average 12% of the total or €350 billion. The average residual life of Italy’s debt is 7.8 years.


Furthermore, to change the Italian constitution, 75% of the MPs must agree, or the proposed changes are subject to the citizens’ approval via a referendum. Europe remains an attentive watchdog, since all member countries must commit to public finances that will lead to a debt to GDP ratio of 60% and a deficit below 3% of GDP. In that light, Italy’s public debt has de-facto diminished the possible amplitude of any financial maneuver unless approved by the European commission and blessed by the financial markets. All political and business leaders are aware of these safeguards. Margins are narrow.


A key role will be played by the business sector. This community also needs to emancipate itself from the rituals of the past. What will be under test will be its ability to assist by providing the government and policy makers with the know-how and perspectives to wisely address the challenges that Italy, Europe and the world must face this fall, and in the years to come. Where necessary, it should lend needed skill sets from its human capital, and should assist in ensuring that public opinion concurs.


In addition to the iconic industries of food, fashion, furniture and sport cars, Italy harbors a mighty industrial capability. It is the location of the headquarters, among others, of large energy multinationals. It has a solid banking system, transportation and pharmaceutical excellencies, top universities, aerospace and aeronautic world players, digital champions, and world-class construction companies. Its small to medium enterprises are world-leaders in various forms of manufacturing. The business community is the unquestionable protagonist of Italy’s well-being and prosperity. Italy’s exports represent 32% of GDP, €5,2 trillion is the financial wealth of the Italians, which is twice the size of the public debt. All stakeholders, central to which is the population and their savings and pensions, seek stability, predictability, and a productive relationship with Europe. The additional prize will be to secure the continuing stream of the €235 billion conditionally allocated to Italy from the European NGEU. The business community must adapt and act accordingly.




The concerns expressed by President Giuliano Amato are real and remain the Achilles’ heel of this political class. Political leaders are well aware that rank-and-file members informed by petrified historical memory are not qualified to lead the country in such turbulent times. All coalitions are attempting to increase credibility and become more authoritative, appealing to undecided voters (and international institutions) by enrolling distinguished leaders from civil society. It signals a willingness to acquire and deploy critical know-how to navigate uncharted waters. It also signals that political leaders do aim to re-establish the primacy of politics, and have realized that the quality of human capital is a necessary, non-negotiable condition. It is to be ardently hoped that the presence of these personalities and their skills in the future parliament, from all coalitions, will increase the overall quality and the standing of this institution and of its output.


On September 26, the winner will have to work proactively at European cohesiveness to assist in managing the consequences of a war on European soil, an assertive China, and a US leadership that is driven by the same factionalism that divides the country and anxiously focused on November mid-term elections. The Italian winner will be immediately immersed in the heavy seas of public finances, the challenges of the reforms that must be implemented to have access to the EU funds, rising inflation, the possible social unrest caused by skyrocketing energy prices, and a likely economic recession. Fortunately, they will also be leading an economically resilient country with solid domestic institutions, capable domestically and internationally of weathering yet another storm of its history. Whether welcome or a burden, the safeguards of the system will be of help to the winner in making the tough choices that will be unpopular but instrumental in ensuring economic growth.


PD Election Rally


To fear apocalyptic scenarios, to misinform foreign and domestic public opinion about non-existent threats of "isms" (fascism, communism, anarchism), to call-in possible foreign interference in favor of this or that coalition, means not serving one's country as it deserves.


Despite Italy’s industrial might, resilience and durability, Italy is far less extroverted than it rightfully should be. That there continues to be an insular, even parochial aspect to the Italian psyche can be seen in the fact that, unlike the English speaking, internationally broadcasting government television channels of the French, Germans, Poles et al, Italy does not speak English to the rest of the world. It allows the understanding of Italy to be mediated by others who, we trust in good faith, discuss and suggest what Italy is or should become.


We should take responsibility for that narrative ourselves, Italian and English, domestic and

international, and we should make it meaningful, make it equitable, and make it count. 


 This column and those that will follow aim to provide authentic and fact-based perspectives

on Italy...Join the conversation. The opinions expressed in this column are those of the author and do not purport to reflect the opinions or views of Newest Corp. or its affiliates.