What the commentators said

“Brussels is watching Italy with horror,” said Katya Adler on BBC News online. It faces “the very real prospect of having a Moscow-sympathising, passionately Eurosceptic government in the heart of the EU, hell-bent on flouting the bloc’s budgetary, eurozone and migration regulations”. And even if the League and M5S have for now backed away from previous pledges to hold a referendum on quitting the eurozone altogether, the threat remains as long as they’re in power. Even inside the euro, a spendthrift Italy will prove a serious menace, said Larry Elliott in The Guardian. The coalition talks of reversing the 2011 reforms that raised the pension age, of introducing a guaranteed monthly income of s780 for poor families and of new flat taxes. Estimated cost? s60bn a year. That’s quite enough to “drive a coach and horses” through the eurozone’s rules on budget deficits, to scare the markets and to enrage other EU governments.

We’ve been here before, said Jeremy Warner in The Daily Telegraph. A few years ago, Greece’s left-wing Syriza government was making similar hostile noises over the euro. But unlike Greece, Italy can’t be swatted away: it’s the EU’S fourth largest economy. “If Italy blows, the whole thing will blow.” To the EU high command, Brexit is just a minor irritant compared to what’s going on here. Weirdly, financial markets seem unbothered, said Ben Chu in The Independent. Interest rates on Italian government bonds remain low. Maybe they can’t take seriously a party (M5S) founded by a comedian (Beppe Grillo). Maybe they think Italy’s strong presidency will ensure things don’t get out of hand. But maybe they’re wrong, said Martin Wolf in the FT. The brute fact is that many Italians are “contemptuous of their establishment”: that’s what underpins this bizarre coalition of left- and right-wing populists. And “the spiral of populism is: unhappy voters; irresponsible promises, bad outcomes; even unhappier voters; still more irresponsible promises; and worse outcomes”. So Italy’s “story is not over. It may have just begun.”