Renzi shakes up Italy's creaking governance

When Matteo Renzi, came to power, many questioned whether Italy's youthful prime minister could deliver on his promise to shake up the country's creaking political system and revive its economy. Fifteen months on, the former mayor of Florence is silencing his critics.

Mr Renzi has just implemented a long-awaited reform of Italy's Byzantine labour laws that should make it easier for businesses to hire employees on permanent contracts. Now he has pushed through a shake-up of the country's electoral system that could radically change the way Italy is run.

The prime minister has always acknowledged that Italy needs to overhaul not just its labour markets but its bureaucracy and judiciary if the country is to boost its feeble growth rate. He also argues that such reforms will not happen unless Italy first streamlines its political arrangements. Since the second world war, an obsessive system of checks and balances has regularly produced unstable coalition governments, many of which have been more pre-occupied with survival than with ruling effectively or driving through change.

Mr Renzi's new electoral law aims to sweep this away by guaranteeing that the next government, to be elected by 2018 at the latest, will have a working majority in the Italian lower house, the chamber of deputies. Italy will still vote for the chamber under a system dominated by proportional representation. But whichever party secures 40 per cent of the national vote, or whichever comes first in a subsequent two-round ballot, will receive 340 seats out of the 630 in the chamber.

On the face of it, this could be a good idea. In the past 20 years alone, Italy has had 13 governments and only six national elections. The new system could boost the power of the country's notoriously weak executive. It might help future administrations to confront vested interests, in the form of trade unions and judges, that have often stymied ministers in the past.

The law could also assist Mr Renzi in stepping up the pace of economic reform. Until now, the prime minister has enjoyed little leverage over his heterogeneous grand coalition of centre-left and centre-right parties. When coalition allies have resisted change it has been hard for him to threaten an early election because the result would almost certainly be another hung parliament. Given that Mr Renzi's Democratic party is in first place in the opinion polls, the new electoral system gives him greater bargaining power.

This does not mean that the law is without concerns. One worry is that it may place too much power in the hands of the executive, not only giving victorious party leaders a built-in majority but also allowing them to pack the benches with loyalists. At the other end of the scale, it admits parties to parliament with a very small share of the vote, which could lead to a fragmented and weak opposition.

The biggest worry, however, is the manner in which Mr Renzi is pushing through the change. Set alongside planned reforms to the upper house, the reforms would defang it as a legislature and leave the chamber of deputies supreme. The prime minister, it should not be forgotten, did not come to power on the back of a general election. He does not therefore enjoy a direct mandate for such sweeping change.

Mr Renzi's diagnosis may be correct: Italy would benefit from more stable government, especially at times of economic uncertainty. But before pressing ahead with further reform of the country's institutions, he needs to ensure that he has widespread public support - and does not allow his critics to paint the changes as a constitutional coup.

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