Italy: The Stability of Prime Minister Meloni's Government Reinforced by the Results of the European Elections

Yesterday, Prime Minister Giorgia Meloni's Brothers of Italy (FdI) won the European elections in Italy, cementing its leadership and reinforcing the stability of the incumbent right-wing government. FdI obtained 28.8% of the votes, followed by the centre-left Democratic Party (PD) with 24.1%, and with some difference the Five Star Movement (M5S) with 10.0%, Forza Italia - Noi Moderati (FI-NM) with 9.6%, and Lega with 9.0%. The performance of FdI in the European elections was stronger than in the Italian parliamentary elections in September 2022.

The incumbent government's popularity was revalidated with 47.4% of the votes compared to the 43.8% in the Italian general elections in September 2022. The balance of power between the coalition partners, in particular between minority partners Lega and Forza Italia, has not changed significantly despite Lega’s underperformance compared to the previous European elections. We cannot rule out a potential cabinet reshuffle affecting specific ministries, however, we do not anticipate this eventuality to materially affect the stability of the government.

Key Highlights
• The stability of the government was reinforced by the elections.
• We do not expect the government to significantly deviate from its current pragmatic approach in its fiscal and economic strategy.
• Progress in fiscal rebalancing and the implementation of its recovery plan will continue to be key.

“The government led by Prime Minister Meloni emerged from the European elections reinforced and with a window of stability to implement its political agenda. However, we do not expect the government to deviate significantly from its current pragmatic approach on its fiscal and economic strategy. This will continue to largely be conditioned by the implementation of its revised National Recovery and Resilience Plan and the reformed European fiscal rules,” said Javier Rouillet, Senior Vice President, Morningstar DBRS, Global Sovereign Ratings.