What a right leaning Italy means for a united Europe
Full of swagger and bombast, Matteo Salvini does not fit the traditional mold of a major leader in modern Europe, even in appearance. Italy’s new duty prime minister sometimes wears common sweatshirts at public events, a sharp contrast to the well-tailored image expected in fashion-conscious Europe. His comments are equally unorthodox as he continues to make provocative Eurosceptic statements and advance his coalition government’s spending policies.
“I want a Europe that does few things, including border patrols, and does them well. Certain decisions have to be made by single states alone,” he recently said. “With this government in place, Italy can no longer be considered a sucker.” The outspoken approach has apparently found favour among Italians. According to a recent poll by research agency SWG, some 31 per cent of Italians now approve of his performance, a surge from the 17.4 per cent his Lega Nord party received in last March’s national vote.
As he and the new Italian government continue to make waves, Salvini is also helping further embolden the rightwing in Europe. True to his style, he has engaged in public verbal spats with French President Emmanuel Macron, European Commission President Jean-Claude Juncker and EU Economic Commissioner Pierre Moscovici. “The real enemies of Europe are the Junckers, the Moscovicis and all those who are barricaded in the Brussels bunker,” said Salvini in reference to the headquarters of the EU.
The statements might play well to the home crowd, but to others they are cause for alarm. The unforgiving investment market sees a continuing series of red flags and ominously worries about Italy’s ability to service additional debt. Part of Salvini’s pushback against the EU is a proposed budget that exceeds the bloc’s debt guidelines.
Francesco Verderami, a political analyst at Italy’s Corriere della Sera newspaper, says the government is “behaving like in the movie Rebel Without a Cause with James Dean, where the winner is he who brakes closer to the precipice.”
“It is an extremely dangerous game, even worse in this case,” says Verderami. “In the car there is not one person but an entire country Italy.”
He sees the biggest danger in defying the market. “Italy risks getting into trouble if the bond rating agencies reject it,” says Verderami. “The match is now between Italy and the markets, not between Italy and the European Union. I ask myself a question: ‘Is this government able to play hardball up to the end, jeopardising Italy’s stability?’”
Italy already has one of the highest debt-to-GDP levels in the world, following only Japan, which still has the monetary lever of controlling its own currency, which as a euro member, Italy does not. Rating agencies have placed Italy’s sovereign bonds just a couple of notches above junk status.
Rome can seek some consolation in the fact that Standard & Poor’s continues with a “stable” outlook on Italian bonds. The rating agency is scheduled to review the rating on October 26. Fitch downgraded its outlook to “negative” in September. “A downgrade by more than one notch could lead to negative self-fulfilling debt dynamics,” writes Silvia Ardagna, senior strategist at Goldman Sachs, triggering a possible inability to borrow more to fund its existing debt, new spending and payments to keep the country running.
“Italians expect concrete things from Salvini,” says Verderami. “But there is doubt whether he can do what has been promised in economic terms. This politicised budget does not convince. There is too much welfare and little economic investment.”
On the political front, Salvini’s Eurosceptic stance is also embraced outside of Italy as anti-establishment parties continue to rise. In September he met with US President Donald Trump’s former chief strategist Steve Bannon in Rome and joined an anti-establishment group called the Movement founded by Bannon, said Mischaël Modrikamen, a Belgian politician and member of the group. The meeting followed talks between Salvini and Hungarian Prime Minister Viktor Orbán, another Eurosceptic leader. The two released a statement saying they are “walking down the same path” in opposition to EU actions on immigration and other policies.
At a European labour congress on October 8, Salvini lauded Marine Le Pen, leader of France’s rightwing National Rally political party, saying he shares
Part of Salvini’s pushback against the EU is a proposed budget that exceeds the bloc’s debt guidelines.
her “values, principles, coherence and pride”. “We may well have a revolution in common sense,” he added.
Certainly disruptive to the liberal status-quo, which many applaud, the defiance could also be downright dangerous. Verderami says the new Italian government is the latest in a string of “a long list including previous politicians who continued to reraise as if sitting at a casino table without worrying about anything except clashing with each other.”
“This is a government of incompetents: some ministers in some passages have shown their inexperience,” he says of the governing coalition, many of them new to power. With various possibilities yet to play out, Salvini remains adamant. “The prescriptions imposed by Europe and previous governments have increased the public debt and made Italy poor and precarious,” he told an Italian radio programme on October 12. “We will do the exact opposite of that.” —