There are three parameters that are guiding the markets in these hours and that are fueling their fears about the Italian case: government stability, respect for the budgetary commitments undertaken with Europe and loyalty to the policy of rigor and reforms. This is why – as indicated by the upward race of the spread and yields in the BTP auction this morning and as seen yesterday by the bearish reactions of the Stock Exchange after Pier Luigi Bersani's first post-election press conference – the markets see as smoke in the eyes the prospect, overshadowed by the secretary of the Democratic Party, of a Bersani minority government forced to ask, time after time - as Nichi Vendola suggests -, the vote in Parliament of Beppe Grillo, which would end up becoming the real needle in the balance and the true arbiter of Italian politics.
There are those who do not see the dangers of instability that a political solution of this kind would cause, but there are other fears that keep the markets anxious: the weakening of the policy of rigor and reforms from the Monti government and the removal by Europe and by the commitments in defense of the euro (primarily the Fiscal Compact) undertaken previously by Italy to recover credibility and calm the markets. Grillo proved to be a good pragmatist yesterday too, but his hostility to Europe and to austerity is known.
This is why the markets look with confidence and hope to Giorgio Napolitano, the president who already performed the miracle of replacing Berlusconi when Italy was on the verge of bankruptcy and of inventing the Monti government which avoided default. Now the Head of State could pull another rabbit out of his hat a few months after his departure from the Quirinal. What are the markets from Colle waiting for? That a path be taken that gives greater stability to the government and that does not split the country and Parliament in two. Translated: that you don't hand over the center-right to the opposition a priori.
Naturally, the idea of a highly governed Pd-Pdl seems impracticable for now and Bersani has already clearly ruled it out. But the alternatives are not lacking. In the last few hours, the hypothesis of a government of the President, which would not have a predefined majority and which would also be forced to find consensus in Parliament from time to time, seems to be gaining ground, but with a substantial difference compared to the Bersani-Grillo solution : that the votes would be asked of everyone, from Grillo to Berlusconi, making the space for action of the new Executive wider.
Would Bersani feel up to taking such a path after his first post-vote declarations? It seems difficult, but it is also unlikely that Napolitano will resign himself to a Bersani government at the feet of Grillo, with the risk that the pro-European policy of rigor – rather than being correct, as it should be – will be completely abandoned, triggering the reactions of markets.
This is why, if Bersani were stubborn about the minority government open to Grillo, he could put forward the alternative hypothesis of a government of the President open to right and left and entrusted to an institutional personality, appreciated by the Pd but also by the Pdl, such as that of Giuliano Amato, who already in '92 pulled Italy out of the storm. But the word belongs first of all to Giorgio Napolitano.
