EU Shivers as Italy Forms First Eurosceptic Alliance

[Image left-to-right: Lega leader Matteo Salvini and M5S leader Luigi di Maio]

By Stefan M. Kløvning

Italy, International Relations – A populist coalition is forming in the Italian government between the Five Star Movement (M5S), led by Luigi di Maio, and right-wing nationalist Lega, led by Matteo Salvini. The leaders have been ridiculed in the Italian newspaper Il Manifesto for not managing to agree who should be Prime Minister, and rather having chosen law professor Giuseppe Conte to lead the third largest economy in Europe, who has previously never held any political office though being closely connected to M5S. Though the alliance has been smeared by newspapers such as Der Spiegel, claiming them to be ‘the most unusual and inexperienced’ of the 67 government alliances the last 70 years in Italy, they admit the alliance could be threatening for the European Union.

The position of M5S to the European Union has been criticized as ambiguous, being rejected by both pro-EU European parliament groups Green/EFA and the ALDE in 2014, and afterward letting their activists choose, resulting in 78% voting to join the Eurosceptic EFDD led by Nigel Farage. M5S tried to change to ALDE in 2017, leading once again to rejection by leader Guy Verhofstadt in fear of an increase of heterogeneity in the group. The new leader of the M5S has also been ambiguous on his position. In December 2017 Luigi di Maio said he would support an Italian referendum to leave the EU, a position he left at the beginning of 2018, exclaiming in February that the ‘European Union is the Five Star Movement’s home.’ In Lega, the stance on EU is somewhat more clear, with Matteo Salvini proposing the abandonment of the Euro in Italy, but also here is a lack of agreement within the party. Mr. Salvini recently said in a speech that ‘Europe should take care of its own problems, we will take care of Italy…’

Despite their past ambiguity, they promised their voters to battle EU over financial and immigration policies. According to experts, opposition to EU in the Italian government could pose a large threat to the Union. Darren Lilleker, Professor of Political Communication at Bournemouth University, for instance, told Express that ‘Italy is symbolic as it’s one of the founding nations, and it follows the trend started in 2016 with Brexit, where the idea of taking back the country reigned the referendum campaign.’ With Britain, Hungary, and Poland already putting hard pressure on the European Union, if Italy participates in the same trend with this alliance, according to the New York Times, it could be fatal for the Union. Deutsche Bank also claims that Italy’s huge debt, their weak banking system, and their generally weak economy could ‘trigger the next financial crisis – and bring the euro down with it.’

The support for parties such as M5S and Lega in Italy also comes, according to Der Spiegel, from their large debt of 132% of their GDP, a ratio only exceeded by Greece; the country still suffering from the financial crisis; high unemployment; and struggling to deal with the thousands of migrants still streaming across the Meditteranean to Italy.

Their plans, however, have been criticized for potentially making the problems even worse. These included tax cuts, a minimum basic income, and retracting a recently passed pension reform. These will cost £109 billion annually, according to the calculations of Caro Cottarelli, a former director of the Fiscal Affairs Department. Another economist, Jörg Krämer, claimed that the country’s budget deficit could go from 2.3% to 7% of the GDP if their plans are actualized.

Clement Fuest of the Center of Economic Studies in Munich said that ‘the eurozone is threatened by a new crisis’ – the new crisis of Italy. The future of the European Union seems now to lie much in the hands of the Italian government. Even if they wouldn’t go too hard against EU, their domestic policies seem to lead to an increase in debt which could make Italy an even bigger burden on the EU than it already is, and could give them an incentive to dispose of Italy themselves rather than the other way around. This would all be a large game of risk, however, a risk inspired by Britain.