Italy to go to the polls, finally - ING

Next Sunday’s elections could lead to a hung parliament, opening a prolonged phase of negotiations to form a new majority, according to Paolo Pizzoli, Senior Economist at ING.

Key Quotes

“As the outgoing Gentiloni government will act as a caretaker, market reaction could be limited to a temporary widening of spreads in a more volatile environment.”

“On 4 March Italy will hold its much-awaited political elections.”

“A newly introduced mixed electoral system, combining a purely equal part with a first-past-the-post part, the latter allowing for the formation of coalitions, will be used for both branches of Parliament.”

“In more detail, the proportional part will allot around two-thirds of seats (386 out of 630 at the House of Representatives, 193 out of 315 at the Senate) and the first-past-the-post part around two-thirds (193 out of 630 at the House of Representatives and 116 out of 315 at the Senate). The remaining seats (12 at the House of Representatives, six at the Senate), reserved to Italian residents abroad, will be awarded a different system. The new electoral rules include both houses - a somewhat complicated system of entry thresholds.”

“Polls will be open from 7:00am till 11:00pm CET, and the official results should be out the following morning.”

“Competing coalitions

• The new electoral law has created an incentive to form coalitions to better compete in the first-past-the-post part, and many parties took the opportunity.
• The electoral test will see three main political aggregates competing: a centre-right coalition, a centre-left coalition and the Five Star Movement (M5S), which will run in isolation. Liberi e Uguali, a party putting together a group of MPs who split from the PD party early in 2017 and other small parties of the left will also run in isolation. The centre-right puts together Forza Italia, Lega Nord, Fratelli d'Italia and Noi con l'Italia. The centre-left coalition, built around Partito Democratico, includes +Europa, Insieme and Civica Popolare.”