Insight
The EU should seize the chance to stop Italy’s eurosceptic drift by Luigi Scazzieri 5 September 2019
Italy’s new coalition government between the Five Star Movement and the Democratic Party is good news for Europe. But a resurgence of the League is likely unless Europe helps Italy in a visible manner. The latest twist in Italy’s turbulent politics has delivered an unlikely coalition government between the centre-left, pro-European Democratic Party and the populist Five Star Movement. Giuseppe Conte, one of Italy’s most popular politicians, will stay on as prime minister. The birth of the new government marks the end of the political crisis that began when Matteo Salvini, leader of the far-right League and former deputy prime minister, pulled the plug on his party’s coalition with the Five Star Movement in early August in the hope of triggering elections in which he could win a majority. The move backfired when the Five Star Movement and the Democratic Party agreed to form a new government rather than risk contesting elections in which both seemed certain to suffer heavy losses. Despite being able to agree on a coalition, the alliance between the Five Star Movement and the Democratic Party is likely to be awkward and uncomfortable, at least initially, as there will be many issues on which the parties disagree. The coalition agreement is made up of a list of promises lacking in detail. It states the government will try to raise economic growth, but “without compromising the equilibrium of public finances.” The parties also pledged to cut the number of politicians, improve labour conditions, fight all forms of inequality, launch a ‘Green new deal’, and combat tax evasion. Nevertheless, the new government is good news for Europe, as the alternative – a League-dominated government – would have been much worse. If the parties had not been able to form a coalition there would have been a new election, and polls leave little doubt that it would have led to a government led by the League, in coalition with the far-right Brothers of Italy. The League had promised a package of tax cuts and greater public spending worth a combined €50 billion. Even though Salvini would probably have softened his plans once in power to avoid a confrontation with the EU, the fiscal splurge, combined with his party’s ambiguous stance on the euro and flirtation with the idea of a parallel currency, would have rattled investors. That would have made it CER INSIGHT: The EU should seize the chance to stop Italy’s eurosceptic drift 5 September 2019
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