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27 Sep 2022

A Changing EU

Luigi Scazzieri examines the result of the Italian general election and sets out what the victory of Giorgia Meloni and the right-wing Brothers of Italy party means for Italy and for Europe.

Italy’s election on Sunday had one clear winner: Giorgia Meloni, the leader of the right-wing Brothers of Italy. Meloni won 26% of votes, with Brothers of Italy becoming the country’s largest political force. Meloni is now set to become Italy’s first female prime minister, leading a coalition government together with Matteo Salvini’s League and former prime minister Silvio Berlusconi’s Forza Italia.

The right-wing coalition won because Brothers of Italy, the League and Forza Italia managed to forge a common platform, while their opponents ran divided. As a result, the right-wing coalition won the overwhelming majority of the 1/3 of parliamentary seats that are distributed on a first past the post basis. Within the right-wing coalition, Meloni’s success is due to her nationalist rhetoric, conservative agenda and her own charisma, which allowed her to appeal to many citizens.  Brothers of Italy also benefitted from having been in opposition for the past decade, unlike all other major parties, and therefore has not had to make unpopular choices.

Italy’s European and international partners are concerned about what a Meloni-led government might mean for Italy’s economy, for the sustainability of its debt (which stands at over 150 per cent of GDP) and for Italy’s relations with its EU partners. Salvini and Meloni’s admiration for Putin also makes observers fret that a right-wing government might go soft on Russia. And, given Salvini’s populism and Meloni’s background in the neo-fascist Italian Social Movement, there are concerns that Italy could become a disruptive EU member like Poland or Hungary.

But Meloni is likely to govern more moderately than many observers fear. In economic policy, her room for manoeuvre will be limited. The right-wing coalition promised tax cuts and more social spending, like higher pensions and benefits for families. But Italy cannot afford to implement these promises, as a loose fiscal policy would lead to higher borrowing costs and could spark a financial crisis. The government will have to scale back most of its spending promises. If it looked like it might implement them, borrowing costs would shoot up amid market fears that the ECB could stop buying Italian government bonds – and this would almost certainly prompt the government to step back from the brink.

A right-wing government will also not want to lose access to the €192 billion from the EU recovery fund that Italy is entitled to. It will face a strong incentive to continue with reforms begun by former prime minster Mario Draghi, as disbursements from the fund are conditional on reforms being fully implemented. Even so, there could be substantial disagreements between the Italian government and the European Commission over whether reforms have been fully implemented.

The election result in Italy will strengthen the right-wing bloc in the EU. But that bloc remains divided on many issues from migration to policy towards Russia. And Italy may not be a full-time member of it either. A Meloni government would want to look more assertive in its dealings with the EU, and there will be turbulence in relations. But Italy is unlikely to seek confrontation for its own sake. The right-wing coalition’s programme even calls for a stronger Europe on the global stage and does not mention policies that would quickly lead to a clash with the EU, and that some right-wing parties had adopted in the past, like asserting the supremacy of Italian law over EU law.

Still, when it comes to the rule of law and EU institutional reforms, a right-wing government in Italy will have an impact on EU debates. It will mean that there is yet another government in the EU that is unwilling to push Poland and Hungary hard. And a right-wing government in Rome will not be enthusiastic about institutional reforms of the EU that appear to dilute national sovereignty, such as the extension of qualified majority voting in more policy areas, as proposed by Macron and German Chancellor Olaf Scholz. The idea of treaty change will probably be shelved.

When it comes to foreign policy, fears that Italy will tilt away from the West are misplaced. It is true that Meloni, Salvini and Berlusconi have all openly admired Putin. Since Putin’s invasion, Salvini has criticised EU sanctions on Russia, saying that arms prolong the conflict and that sanctions hurt Europe more than Russia. And the League has had unexplained dealings with Russia, including close associates of Salvini discussing potential financing with Russian officials. But none of these things mean that Italy will be willing to do Russia any favours.

Meloni backed Draghi’s support for Ukraine, including military assistance, even though she was in opposition. As for Salvini, his opposition to sanctions on Russia and arms deliveries to Ukraine are best seen as opportunistic moves to gain support from voters concerned that the conflict will damage Italy’s economy. And Salvini also opposed sanctions on Russia when the League was in government between 2018 and 2019, but Italy did not veto the renewal of EU sanctions. With the stakes even higher now, it is even less likely that Italy would break with the Western consensus, as vetoing sanctions would destroy relations with Italy’s partners. Still, while a right-wing government would be unlikely to radically alter Italy’s stance towards Russia, it would join the ranks of those member-states that argue for caution in imposing additional sanctions.

Italy’s next government will lead to more turbulence in relations with the EU, particularly if the government stridently tries to show it is asserting Italy’s national interests. But Italy will be less disruptive than many fear. Rome would need to adopt a constructive tone and frame realistic policies if it wants its EU partners to take it seriously. And a right-wing government may not hold power for very long. It will have to govern Italy during a difficult winter and make difficult political choices. Infighting within the coalition is almost inevitable and it could easily collapse.

By Luigi Scazzieri, Senior Research Fellow at the Centre for European Reform.

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