History

The Renzi and Gentiloni governments

Renzi immediately embarked on a bold reform program in an attempt to revitalize Italy’s stagnant labor market and to stimulate economic growth. While the IMF applauded the move, Renzi faced opposition from Italy’s labor unions as well as from members of his own party. Italy’s economy emerged from recession in 2015, but it still lagged behind the rest of the euro area, and unemployment remained stubbornly high. Meanwhile, Europe’s migrant crisis continued to loom as a pressing foreign and domestic issue for Renzi’s administration. Thousands of refugees died attempting the hazardous Mediterranean crossing in barely seaworthy craft, and Italy’s Operation Mare Nostrum, which had rescued more than 150,000 migrants in 2014, had been terminated in October of that year because of a lack of support from other EU members. After an estimated 800 people were killed in a single shipwreck in April 2015, the EU voted to dramatically expand its multinational Triton sea rescue operation.

The refugee crisis sparked a political showdown for Renzi, as opposition politicians characterized it as “an invasion” and suggested housing the migrants on abandoned oil rigs off the Libyan coast. Renzi’s popularity declined as populist parties such as the Northern League and Beppe Grillo’s Five Star Movement capitalized on anti-immigrant sentiment and the slow pace of economic recovery. Renzi staked his political future on a constitutional referendum that he claimed would enhance the stability of Italy’s central government, which had changed hands 63 times since World War II. Passage of the referendum would see the power of the Senate, the legislature’s upper house, significantly reduced, and Renzi claimed that the changes would make the legislative process more efficient. Critics countered that disproportionate power would accrue to the prime minister’s office, and Renzi vowed to resign if the measure did not pass. On December 4, 2016, voters overwhelmingly rejected the proposal. Renzi announced his resignation, and Grillo, who was the most visible face in the “no” campaign, called for snap elections to be held.

Forgoing fresh elections, Foreign Minister Paolo Gentiloni attempted to form a new government. On December 13, 2016, Gentiloni handily won a vote of confidence in the lower house, and his government was confirmed by the Senate, albeit by a narrower margin, the following day. Gentiloni’s term was marked by political stability and modest economic growth, but the governing PD could boast relatively little public support to show for it. Strong anti-immigrant feeling boosted the fortunes of far-right and populist parties, but a new election law passed in October 2017 changed the allocation of parliamentary seats in a way that favored mainstream parties and those that could build effective coalitions. The Five Star Movement, which had consistently ruled out a governing alliance with other parties, claimed that the law had been passed by the political establishment in an attempt to keep them out of power. In December 2017, with the PD having completed its five-year term, Gentiloni dissolved parliament ahead of general elections that were scheduled to be held in March 2018.

The victory of populist parties

On March 4, 2018, Italians went to the polls and delivered a sharp rebuke to traditional parties. The Five Star Movement was the clear winner, claiming nearly one-third of the vote, but it lacked an obvious path to forming a coalition government. Support for both the ruling PD and Berlusconi’s Forza Italia plummeted; although the PD secured just enough votes to theoretically forge a coalition with Five Star, representatives from both parties adamantly ruled out such a possibility. The League, the Euroskeptic anti-immigration successor to the secessionist Northern League, captured a stunning 18 percent of the vote. This result was especially remarkable because support for the League was largely confined to a relatively narrow band north of the Po River. Also gaining representation was the Brothers of Italy, a descendant of the neofascist National Alliance.

Coalition talks dragged on for two inconclusive months, and on May 7 Italian Pres. Sergio Mattarella delivered a televised address urging parties to appoint a nonpartisan caretaker government under the threat of fresh elections. Five Star vowed that it would not take part in a unity technocratic government, and League leader Matteo Salvini called for a new election that would double as a de facto referendum on Italy’s membership in the European Union (EU). In an effort to resolve the impasse, Berlusconi—as head of the right-wing bloc that included the League, Forza Italia, and the Brothers of Italy—gave his blessing to Salvini to pursue negotiations with Five Star. Days later the ban on Berlusconi holding political office was lifted by a Milan appellate court. As talks between Salvini and Five Star leader Luigi Di Maio proceeded, there emerged the possibility of a Euroskeptic, left and right populist coalition that EU officials dubbed the “nightmare scenario.”

The two parties agreed on an administration to be led by Giuseppe Conte, a law professor and political neophyte. On May 27 Mattarella vetoed Conte’s government, however, on the grounds that proposed finance minister Paolo Savona was a Euroskeptic who would seek to “provoke Italy’s exit from the euro.” The move triggered howls of protest from Five Star, with Di Maio calling for Mattarella’s impeachment, and Italian bond yields soared at the prospect of continued political instability. On May 29 Mattarella sought to calm markets by nominating former IMF executive Carlo Cottarelli to serve at the head of a technocratic caretaker government ahead of early elections. Cottarelli was known as “Mr. Scissors” for his reputation as an opponent of public spending, but his appointment failed to assuage investors. In the end, Cottarelli surrendered his mandate after just 48 hours when Five Star and the League again proposed Conte as prime minister at the head of a reshuffled cabinet. Mattarella approved the government on May 31, and Conte was inaugurated the following day. Salvini was named interior minister, and he immediately began working to fulfill his promise to expel migrants from Italy. Di Maio became labor and economic development minister, a post that allowed him to pursue his campaign pledge of enacting a universal basic income scheme in Italy.

With unemployment at 10.5 percent as of January 2019 (the third highest rate in the EU), Italy introduced the “citizens’ income” program early in the new year. During this time the country was suffering from ongoing economic stagnation, characterized by slow growth and high government debt, and slipped into recession late in 2018. Early in 2020 Italy received a severe shock when it became the first European country to experience the COVID-19 pandemic. During the early phase of the pandemic, Italy was the worst-hit country in Europe, with its health care system put under intense strain. Its GDP contracted by 9 percent in 2020, but the economy began to recover from its pandemic-induced shock in 2021, showing growth of 6.5 percent. A dispute over the response to COVID led to Conte’s resignation, and former European Central Bank president Mario Draghi became prime minister, serving in that position until October 2022.

National politics initially took a sharp right turn in that same month when Giorgia Meloni of the Brothers of Italy became prime minister. Meloni’s rhetoric was initially populist, stressing conservative social values and skepticism toward the EU. As prime minister, however, her policies turned out to be more flexible than many had expected, and she adopted a more positive tone toward the EU upon taking office. In her economic policy, she favored modest tax cuts, promoting family benefits and health spending while making cuts in education, research, and culture. The constraints imposed by Italy’s fiscal condition meant that she was unable to implement many of her proposals fully. Despite this, Meloni’s government in 2026 became the second longest in the history of the Italian Republic.