What a right lean­ing Italy means for a united Europe

Khaleej Times - - NATION - JON VAN HOUSEN & MARIELLA RADAELLI Jon Van Housen and Mariella Radaelli are ed­i­tors at the Lu­mi­nos­ity Italia news agency in Mi­lan

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.” —

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