Euroviews. Why it matters that anti-immigrant populists now control Italy | View

Image: M5S leader Di Maio calls for impachment of Mattarella, blames him fo
Five-Star Movement leader Luigi Di Maio, from left, cheers with supporters during a meeting in Naples, Italy, on May 20, 2018. Copyright Ciro Fusco
Copyright Ciro Fusco
By Jennifer Clark with NBC News Think
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The opinions expressed in this article are those of the author and do not represent in any way the editorial position of Euronews.

And at a time when the rules-based global order is under threat, now is an especially bad time for Europe to be divided and directionless.


Italy's resurgent populist parties have succeeded in coming to power in the government after Giuseppe Conte, a law professor and political novice, was sworn in as the country's new prime minister on June 1. This dramatic political shift will doubtless lead to a more divided and therefore weaker Europe and a possibility of financial contagion.

And at a time when the rules-based global order is under threat from the "America First" unilateralism of President Donald Trump, among others, now is an especially bad a time for Europe to be divided and directionless.

Italy is no stranger to political theater, but the crisis this time is real. Europe's fourth-largest economy has been left without an elected government since March 4, when none of the main parties won enough votes to rule on their own. About 50 percent of Italians picked the far-right, Marine Le Pen ally Matteo Salvini and the anti-establishment Five-Star Movement's 31-year-old Luigi Di Maio, who promised a universal basic income in a country with an 11 percent unemployment rate.

Now that the new government has been successfully created, the political and economic effects will be felt well beyond Italy's borders.

Having a populist government in Italy would further destabilize the European Union at a time when it is dealing with the challenge of Great Britain's exit from the 28-member bloc; a challenge to the rule of law in Poland and Hungary, and a no-confidence vote for the government in Spain.

The League and Five-Star Movement put together a government program that called for a change in the rules that govern the EU and its single currency. They want to exceed the single currency's 3 percent deficit limit in a combination of tax cuts and higher welfare spending, setting them on a collision course with Brussels.

Full implementation of the spending pledges in the populist government program could reach €108.2 billion to €125.2 billion — 6.3% to 7.3% of 2017 GDP, according to the Osservatorio Conti Pubblici, a research institute. Only about half that amount is funded by projected revenue, according to estimates by business daily Il Sole 24 Ore.

Then, there's immigration. The "government contract for change" hammered out by the Five-Star Movement and the League calls for a much tougher line on migrants seeking asylum, contradicting the EU agreement reached in 2015 at the height of the migrant crisis to distribute immigration arrivals across the continent.

Immigration is a hot button issue with voters in Italy, which has absorbed an estimated 600,000 illegal immigrants in the past four years. Salvini has campaigned on "send them all back" rhetoric and will now be interior minister, meaning he can presumably make good on his promises.

Apart from the headache of a showdown over budget rules and immigration, having populists in power in Italy also makes it harder for the EU and other world leaders, led by French President Emmanuel Macron, to push ahead with needed reforms. The best antidote for populism and nationalism in Europe is more integration, Macron has said.

Lastly, Italian populists advocate rolling back sanctions on Russia, which set would likely set it on a collision course with the U.S.

Elisabetta Villa
Italy\'s new prime minister Giuseppe Conte arrives at Palazzo Chigi to open his first cabinet meeting in Rome on June 1, 2018.Elisabetta Villa

While America remains a "privileged ally" of Italy, Salvini and Di Maio's "government contract" calls for an "opening to Russia" as a trade partner, starting with the lifting of economic sanctions.

Italy has seven NATO bases on its soil. The populist tilt towards Russia may put its traditional Atlantic sympathies in the back seat with respect to the advantages in trade and energy supply that could result from closer links with Moscow.

Italy's neighbors in Europe, meanwhile, are rightfully worried about the economic consequences of a populist government. The League and Five-Star Movement are sending mixed messages about their long-term commitment to the euro.

Italians themselves are a little bit better than lukewarm about the currency. A European Commission poll in November showed that 59 percent of Italians wanted to keep the euro, a bit lower than the EU average of 61 percent.

Both Salvini and Di Maio say they don't want to leave the euro. But those reassuring words were contradicted May 25 when they picked a euroskeptic economist, Paolo Savona, as their candidate for economy minister. Their choice was rejected by Italian President Sergio Mattarella, who wielded a little-used power to block cabinet picks.

Italy also holds the world's third-largest public debt and accounts for nearly one-fourth of the eurozone's public debt. Suggestions that it could attempt to pay back this debt mountain in some other currency spooks financial markets. A draft program prepared by League and the Five-Star Movement that leaked in May talked about asking the European Central Bank to "cancel" €250 billion worth of debt. That clause was immediately removed from the contract's final version. But it's exactly this sort of ambiguity that aggravates bond yields.

Italians themselves hold the majority of the national debt. So they would be the ones most harmed by the sort of savage devaluation that would be caused by any euro exit, an exit that would doubtlessly (and ironically) be made in the name of helping Italians. But the financial contagion that could result even from financial speculation alone is a concern for investors in Europe and the U.S.


Populists like to talk about national sovereignty, but we live in an interconnected world. The U.S. financial crisis proved this; hopefully Italians won't be forced to do so again.

Jennifer Clark is a freelance journalist based in Italy and author of "Fiat, Chrysler and the Power of a Dynasty." She has written for The Wall Street Journal, Reuters and Bloomberg.

The opinions expressed in View articles do not reflect those of Euronews.

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