During 2011 Italy reached the verge of a financial default because of its huge public debt. Neither the centre-right nor the centre-left governments that alternated in power in the 2000s were able to introduce the reforms necessary for reducing the debt and promoting growth. The impotence of the government became incompatible with the requirements of the country's continued presence in the eurozone. In November 2011, under the pressure of financial markets and eurozone institutions and leaders, the incumbent centre-right government was obliged to resign, and was substituted by a government composed of technocrats and experts, the Monti government. This lasted until December 2012 and was supported in parliament by a cross-partisan coalition; it was able to introduce some of the structural reforms required, because of the threat of default but also because it did not need to seek the electoral support of powerful constituencies. This article advances an interpretation of the Italian crisis of November 2011, identifying the political and institutional structures and the specific political conditions that fostered a policy stalemate in the country in the 2000s and whose persistence makes the continuation of reforms after the February 2013 elections uncertain.

Public funding of political parties in Italy has developed along quite clear-cut lines: increasingly generous reimbursements; non-selective criteria for the allocation of funds; and an increase in the number of beneficiaries. The current reimbursement system costs the State more than 250 million euros a year. The payment of such reimbursements in annual instalments means that in many cases they continue to receive funds even though they are no longer politically active. However, the most problematic issue concerns party fragmentation. Reimbursements are paid out at different levels of electoral competition (European, general and regional), effectively providing parties with different channels of funding. This is a big opportunity, above all for small parties that often find it difficult to reach the thresholds for representation and funding in some spheres of the electoral competition. This is even more evident if one considers that public funding is the main source of revenue for the Italian political parties.