How dangerous is the new government to be for the economy and, possibly, the survival of the Eurozone, as both the Northern League and the Five Stars movement have threatened, at different moments, Eurexit? After the election, Italy looks indeed pretty much like "France without Macron": right-wing and left-wing "populists" (not a word I like: it muddles things instead of clarifying them) have scored, all together, something like 59% of the votes; "Moderates", either from the left or the right side, didn't do very well at all.
The new Parliament will be sliced in roughly three parts: the Five Stars movement (the true winner of the election, with over 32% of the vote), the center-right coalition, and the Democrats on the left. In spite of the fact the electoral competition between the Five Stars and the Democrats has been very harsh, some observers consider it possible that they would form a partnership for government. In many ways, the Five Stars' roots lie in the traditional left. They wave the flags of "sustainability", "social justice", and "industrial policy". The Democrats are an establishment party, and they strike different chords. Some of them have a genuine belief in the market economy. But many of them still long for the left-wing utopias of their youth, that are now best epitomized by the Five Stars.
It could well be that instead the Democrats hold on, and so we stall for quite a bit, without a government. That shouldn't be so bad. Just recently, Spain, the Netherlands, and Germany had quite a few months without a strong executive and the consequences weren't tragic at all.
Could the Five Stars form a government with the Northern League? Mr Salvini, the party leader, has little to gain by helping the Five Stars. His coalition partner, Mr Berlusconi, is old, and Salvini has the chance of inheriting the baton of the right-wing orchestra. This is a scenario I deem to be dangerous. A country like Italy ought to have a moderate, responsible, free enterprise-oriented right. But it is indeed an "ought": not, in our case, an "is" and a truly felt tradition in this country.
How dangerous is the new government to be for the economy and, possibly, the survival of the Eurozone, as both the Northern League and the Five Stars movement have threatened, at different moments, Eurexit?
It is hard to say. As I said, the Five Stars (or the right, too) would need support from the moderate left to form an effective government. What would they bargain on? We don't know and it is hard to speculate.
Brexit tells us that it is tremendously difficult to quit the EU even if you don't share a currency (in which case, it would require an unanimous vote from other Eurozone member). Can a government of newcomers really envision such a dramatic transition?
I don't want to sound optimistic. But I guess the electoral campaign is over, and the "populists" will have to face reality: not only slogans and electoral promises.
Their electoral triumph, to me, suggests less an historical change of tides than the more prosaic fact that the Italian establishment parties have terribly mismanaged both their policy choices and their communication strategy. Will they be able to rethink themselves, revisiting their mistake and updating their proposals? It's hard to say. On that, I'm definitely not optimistic.