ASSESSMENTS

Why the Coming Elections Won’t Cure Italy's Problems

Mar 2, 2018 | 12:34 GMT

Italy votes in a crowded general election on March 4.

Election posters line a sidewalk in Rome on Feb. 16, 2018. Italy heads to the polls to vote in crowded general elections on March 4. The shadow of ex-leader Silvio Berlusconi looms large, as do populist gains across Europe.

(ALBERTO PIZZOLI/AFP/Getty Images)

Highlights

If the elections produce a hung Parliament, it will likely reduce the chances of a new government introducing disruptive measures that could worry markets, but it will also delay the introduction of much-needed reforms to boost economic growth.
Rome will pressure the European Union to give Italy more room to cut taxes and increase spending, but moderate parties are more likely than their anti-establishment rivals to seek a compromise with Brussels.
The next Italian government will have to deal with high debt levels, slow economic growth, widespread social discontent with the political system and declining influence on EU affairs.

Italians are heading to the ballot box this weekend, but it's anyone's guess as to who will ultimately emerge as the victor. What is clear, however, is that the results on March 4 will be felt well beyond Italy's borders. A likely push by the next Italian government to cut taxes and to increase public spending could put the country on a collision course with EU institutions and could generate concerns in international markets about Italy's efforts to maintain a balanced budget and to reduce its staggering debt levels. No matter who is in charge -- and the prospect of drawn-out coalition negotiations suggests a new administration won't be in charge anytime soon -- any Italian government will have to deal with a weak economy and a heavy debt burden, as well as an electorate that is unhappy with politicians in Rome and Brussels....

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