FILE PHOTO: Italy's Former Prime Minister Matteo Renzi speaks during a news conference in Brussels, Belgium April 28, 2017. Reuters/Eric Vidal/File Photo(reuters_tickers)
By Steve Scherer
ROME (Reuters) - An agreement between Italy's four main political parties on a new electoral system has raised the likelihood of an early election, but does not necessarily mean one will happen.
Monday's deal to implement a German-style version of proportional representation with a 5 percent threshold for a party to get seats has raised expectation of a vote in the autumn, well ahead of the scheduled end of parliament's term in late March.
But Roberto D'Alimonte, a specialist in electoral systems at Rome's Luiss University, put the chances of that at no more than 50:50 as there are many uncertainties yet to play out.
A parliamentary committee is due to begin debating the electoral law on Monday and it is sure to be opposed by small parties that would lose out under the new system. The big parties may also voice demands the others will not accept.
And then there is the 2018 budget, which must be passed by the end of the year and could be held up by an early vote.
Passing this year's budget on time is arguably more important than usual as, without drastic cuts, sales tax will increase by 20 billion euros ($22 billion) from Jan. 1, a measure put in place to guarantee the country meets deficit reduction goals promised to the European Union.
Matteo Renzi, former prime minister and leader of the ruling Democratic Party (PD), played down the likelihood of an early vote.
"For me the (timing of the) election is not tied to the debate" on the electoral law, Renzi said in an internet broadcast on Wednesday.
"We will work together with (Prime Minister) Paolo Gentiloni and the government and decide together what budget to pass."
The far-right Northern League, the anti-establishment 5-Star Movement, Silvio Berlusconi's centre-right Forza Italia and Renzi's PD agreed to pass a PR law by the first week of July.
To get into parliament a party must win 5 percent of the national vote, which according to current polls means only those four parties would get in.
Polls also show no one party would win enough votes to govern alone, with the PD and 5-Star each appealing to about 30 percent of voters, and Forza Italia the League on less than 15 percent each.
"In this context, the natural ally for Renzi is Berlusconi," D'Alimonte said, while the 5-Star and League would be the other possible grouping. "Both would be very uncomfortable alliances."
On Monday a source close to President Sergio Mattarella, the only figure with the power to dissolve parliament, said the head of state was concerned about the budget's passage, which may mean he would hesitate to call a vote before it is passed.
(Additional reporting by Massimiliano Di Giorgio and Antonella Cinelli; Editing by Robin Pomeroy)