Opinion and Editorial

Italy will prosper within the EU, not outside it

Mariella Radaelli & Jon Van Housen
Filed on May 14, 2018 | Last updated on May 14, 2018 at 08.40 pm

The backdrop was the state of affairs in Italy, where two new parties are grappling to form a governing coalition two months after elections were held.

European Parliament President Antonio Tajani, an Italian, warned late last week that rising Italian nationalism could threaten the stability of the European Union (EU). The irony of the setting for his speech was not lost on many - it was in Rome at the Annual State of the European Union Conference. The backdrop was the state of affairs in Italy, where two new parties are grappling to form a governing coalition two months after elections were held.

Both anti-establishment parties Five Star Movement (M5S) and anti-immigration League voiced Eurosceptic rhetoric during their election campaigns.

"Italy is an integral part of the EU," said Tajani. "Leaving the EU doesn't make sense."

His speech echoed similar comments from European Commission President Jean-Claude Juncker and French President Emmanuel Macron as leaders and commentators across Europe and beyond warily watched developments in Italy. As a founding member of the EU and its third-largest economy, an Italian exit would shake the EU to its core.

Virman Cusenza, director of the daily newspaper Il Messaggero and a respected commentator on Italy's notoriously complex political scene, says despite widespread speculation "there's no risk of Italy's exit from the EU".

"The League is Eurosceptic but wants to change Europe from within," Cusenza says.

Another expert, Massimo Franco, political commentator for the Corriere della Sera newspaper, agrees and notes that an M5S spokesperson said clearly that they intend to stay in the EU.

"Di Maio (MS5 leader) is showing more moderation and maturity. The (EU) opposition phase is over," says Franco. "The M5S appears more mature. If they have gathered so many votes, it is because they have shown there are no longer Eurosceptic."

As the weekend drew to a close, it appeared the two parties had found a common ground to form a government, but not before intervention by President Sergio Mattarella, who under the constitution can use a range of levers to force conciliation.

And though both parties have dialled down their anti-EU positions, it will be far from smooth sailing. Their platforms are disruptive to the status quo in Italy and will likely be the same in the EU.

"The M5S and League have in common the fact of being transversal - they collected votes both on the right and on the left. Actually, they (try to) reconcile things that are irreconcilable," says Franco. "I am certainly very concerned about the situation, but they will try to do something together and will start doing minimal things this year."

Cusenza, too, knows it is uncharted waters. "I surely see turbulence on the horizon but I never show bias against the new," he says. "This can be a stimulus, in theory."

Italy had deep concerns about EU policies, most strongly on immigration. As wave after wave of immigrants landed on its shores, Italy felt abandoned by its partners who failed to live up to quotas and accept their share of new arrivals. As well it has chafed under EU-mandated fiscal policies. "There could be conflicts in economic parameters, the EU budget, subsidy cuts to the South and agriculture, and willingness to increase funds for immigration linked to the revision of the Dublin Regulation," says Cusenza.

And even if it doesn't oppose the EU outright, the new government advocates policies that many economists view as unrealistic, leaving them to wonder how viable a partner the new form will be. Appealing to long-held concerns about poverty in the South and high tax rates, the M5S and League say they have reached agreement on a flat tax rate and guaranteed income, which are seemingly opposing policies. Many wonder where the money will come from.

Financial markets have adopted a wait-and-see attitude, but they are not likely to be as patient as President Matarella, the 76-year-old "wise man" of current Italian politics. 

An analysis by investment bank JPMorgan Chase notes, "At face value the electoral programmes by the League and M5S imply the risk of large fiscal slippage, which could be consistent with much higher bond spreads between Italy and other euro-area countries."

In the end, that's what it's all about for Italy. Weary of the gridlock, perceived patronage and onerous tax rates, citizens from across the spectrum voted for political change of one kind or another. "Today we have Salvini (League leader) and Di Maio (of the M5S). We blame these two today," says Franco.

Perhaps it would be best to stop the political blame game altogether. Cohesion both within the country and in the EU would better serve the nation's interests.

After all, the breakthrough in the European experiment in common well-being was enshrined in its very name - union.

Mariella Radaelli and Jon Van Housen are editors at the Luminosity Italia news agency in Milan

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