As European household energy bills surged at the onset of a blistering hot summer, Italy’s prime minister Mario Draghi framed the sacrifices he was asking Italians to make on behalf of Ukraine as a stark choice. “Do you want peace,” he asked in April, “or do you want air conditioning?”
Now, after the premature collapse of Draghi’s cross-party coalition in July, Italians are poised to vote for a new government whose willingness to put them through further economic disruption and sacrifices is in doubt.
If polls are correct, Italy will emerge from its general election on Sunday with a new far-right government led by arch-conservative Giorgia Meloni, president of the Brothers of Italy. She and her populist ally Matteo Salvini, leader of the League, together appear poised for a decisive victory over a deeply divided centre-left.
It would mark Italy’s first experiment with far-right rule since fascist dictator Benito Mussolini, after a total of 69 ideologically diverse governments since the second world war. Many Italians fear that personal freedoms will be curbed and space for democracy shrunk. Others fret that the comparatively inexperienced Brothers of Italy, which is forecast to lead the coalition, lacks the technical competence to navigate Italy through its current economic challenges.
Decision makers in Brussels and in Washington, as well as in Moscow, will also be watching closely to see whether the rightwing coalition — with its strong nationalist leanings and historic hostility to the EU — will have the fortitude to maintain Italy’s strong support for Ukraine, or whether its ascent will bring new friction to Rome’s relationship with Europe.
“Ukrainians are doing fine holding the line on the battlefield, so the fundamental question in transatlantic relations is: ‘Will Western nations hold the line politically and economically, especially with the coming winter?’,” says Stefano Stefanini, Italy’s former ambassador to Nato. “Italy could really create problems for the EU.”
Both Meloni, a conservative firebrand whose political career began as a teenage activist in the youth wing of the neo-fascist Italian Social Movement, and Salvini, who was an ardent admirer of Russian president Vladimir Putin, are Eurosceptics.
They have fiercely criticised the EU — Meloni has called Brussels bureaucrats agents of “nihilistic global elites driven by international finance” — and both flirted with leaving the euro, though they have lately muted their hostile rhetoric.
While Meloni has pledged to continue Draghi’s policies of military support for Ukraine and tough line on sanctions on Russia, Salvini on the campaign trail has publicly complained of the toll sanctions are taking on Italy’s economy.
“Europe chose to impose sanctions after the war. That’s fine — but the price of sanctions cannot be paid by Italian families and businesses,” Salvini told supporters at Lake Como this month. “The measures that Europe has imposed are not bringing those who unleashed the war — Putin, the ministers, the oligarchs, the generals — to their knees. Who is paying for the sanctions? You are.”
For all Meloni’s reassuring promises of continuity and Salvini’s agitated rhetoric, analysts say the real test for the new government will lie in the months ahead as the EU tries to work out a co-ordinated response to changing battlefield conditions, and the G7 hammers out specific details on such complicated policies as the oil price cap.
“Italy’s new government will be judged on facts, not on statements and declarations during the campaign,” Stefanini says. “It is not as simple as just holding the line on existing sanctions. It will be what is the new government’s line on new developments, where there will be new decisions to be made.”
But, Stefanini warns, “not to hold the line would cost Italy both its relationship with the EU and the US, and that is a price Italy cannot afford. Italy cannot afford the price of discontinuity on foreign policy.”
Italy is dependent on a continuing €200bn EU package to help reboot its chronically underperforming economy, and faces questions about the sustainability of its almost $3tn in sovereign debt. Together, Italian analysts expect these will keep the new government onside with key European powers, such as France and Germany, and check its confrontational impulses.
Italy is particularly vulnerable as the European Central Bank tightens monetary policy. To benefit from a new ECB government bond-buying scheme intended to keep its borrowing costs from spiralling further, Rome will have to comply with its EU commitments, including structural reforms promised as part of the Covid recovery programme.
“In the depths of her heart, Meloni is a Eurosceptic,” says Nathalie Tocci, director of the Italian Institute of International Affairs. “But the context doesn’t really allow for much messing around, unless you want to bring the country to bankruptcy. We are in the middle of a crisis and the markets have their eyes on Italy. They are going to be watching her every step.”
Brothers in arms
How the new government handles its vexed policy challenges will be determined partly by the balance of power within the coalition.
The two key leaders are united in fierce opposition to migration, and support for conservative “family values”. But while Meloni is a staunch Atlanticist who advocates muscular national security policies, Salvini’s support base includes companies that had close business relations with Russia until the invasion.
Tensions between the two — who have sometimes struggled to conceal their intense personal rivalry as they campaign together in a joint quest for power — have already emerged.
In recent weeks, Salvini has clamoured for Draghi’s caretaker government to draw additional borrowings of about €30bn — the equivalent of 2 per cent of gross domestic product — for relief measures for stricken businesses, seemingly heedless of fears about Italy’s already record levels of debt.
Meloni, by contrast, has vowed to respect fiscal rules and has been urging prudence and caution as she seeks to show herself as a responsible steward for the economy and avoid stoking market fears of a populist spending spree.
“They want to be perceived as a party that you can do business with and can govern the country,” Lorenzo Codogno, a former director-general of the Italian Treasury, says of the Brothers of Italy.
Meloni is predicted to be the coalition’s dominant decision maker. Before the two-week, pre-election ban on publishing public opinion data took effect on September 10, polls indicated that Brothers of Italy was on course to secure more votes than the League and a third coalition partner, Silvio Berlusconi’s Forza Italia, combined.
But Brussels shouldn’t expect an easy ride. Meloni has also talked repeatedly of the need to revise the EU’s €200bn recovery plan to account for the oil price shock stemming from the Ukraine conflict, despite warnings from the commission that the plan cannot undergo significant changes. That, in turn, has raised concerns that the reform and investment programme — with funds released in tranches based on the meeting of key reform criteria — could stall.
Such gloom and uncertainty over Italy’s prospects marks a dramatic turn from the optimism of earlier this year, when Draghi pledged to execute the ambitious EU-funded reform and investment programme aimed at raising Italy’s long-term growth trajectory. The former ECB president faced few questions about meeting commitments to Europe’s institutions.
But the invasion of Ukraine unleashed severe political strains in a country that had long seen itself as a bridge between Russia and the EU. Breaking from Rome’s traditional sympathy for Moscow, Draghi vigorously denounced Russia’s aggression and led the drafting of some of the toughest EU sanctions. That discomfited some members of his coalition — including Salvini and the populist Five Star Movement — who had cultivated strong ties with Putin.
Italy’s economy is also feeling the strain. Inflation jumped to 9 per cent in August, a 37-year high, and growth has slowed as energy prices have soared, while industry groups are warning of large-scale business closures and lay-offs without further government intervention. Investors, meanwhile, are keeping a hawk eye on any evidence of deviation from strict fiscal discipline, which would send Italy’s already elevated borrowing costs skyrocketing.
Guido Crosetto, one of Brothers of Italy’s three co-founders and a top adviser to Meloni, warns that the new Italian government will face intense internal pressure as its citizens reel from the impact of the Ukraine conflict, and will probably need more support from Europe in the months ahead.
“The problem of the west [when it comes to support for Ukraine] is not nations and governments — it is western public opinion,” Crosetto says. “The people do not understand why they have to suffer. There will be a moment when people start blaming the governments. And that will be the hardest moment for all of Europe and the west.”
Many fear that a rightwing Italian government will also be a drag on deeper European integration at a critical juncture. Major European powers are reconsidering closer co-operation on defence and revising fiscal rules to give member states more room for long-term growth-enhancing investments.
In her approach to Europe, Meloni has more in common with Hungarian leader Viktor Orbán than the big forces of the EU, Germany and France, and appears ready to side with other nationalist conservative leaders in their disputes with Brussels over rule of law and democratic standards.
Last week, both Brothers of Italy and the League voted against a European Parliament resolution condemning democratic backsliding in Hungary, while Meloni openly defended Orbán’s record. “Orbán has won the elections, several times even by a wide margin, with all the rest of the constitutional arc lined up against him,” she said. “It is a democratic system.”
Meloni has also said that countries’ national laws should take precedence over EU laws, a view likely to alarm Brussels. “How our national system merges with the European system is an issue,” she told Italy’s state-run broadcaster Rai recently. “It is not an issue of enmity towards Europe, but of better organising how the defence of the national interest works in a European dynamic.”
Crosetto says Brothers of Italy has issues with Europe’s “excessive bureaucracy” and “doesn’t understand the Europe that decides how big the peas must be or how long the fish we eat must be”. However, he says, the rightwing party is absolutely committed to “the spirit of Europe: getting together when there are troubles, fighting against injustice.”
The three leaders
Giorgia Meloni, 45
Fratelli d’Italia (Brothers of Italy)
Meloni started in politics as a 15-year-old activist for the youth wing of the Italian Social Movement, which was founded after the second world war by loyalists of fascist dictator Benito Mussolini.
Matteo Salvini, 49
Lega (the League)
Salvini was a leader of the separatist Northern League — which proposed the creation of an independent state of Padania out of wealthier northern Italy — but remade the party, dropping the “Northern” as a rightwing nationalist entity campaigning for “Italy First”.
Silvio Berlusconi, 85
Berlusconi, a billionaire media tycoon and four-time former prime minister, made his TikTok debut during the current campaign to try to boost his appeal among a new generation of Italian voters.
Rivals warn that Meloni’s nationalist, Eurosceptic outlook will see Italy lose the clout it has wielded in Brussels under Draghi, whose towering personal reputation and staunch commitment to the transatlantic relationship gave him a leading role in EU decision-making through the crisis of the past year.
“Italy will exit from the core of Europe,” warns Enrico Letta, the Democratic party leader who tried but failed to stitch together a broad centre-left coalition to compete more effectively against the rightwing coalition.
“The European future will be less strong and less secure with Meloni,” he says. “Her approach is not a pro-European approach, it is exactly the opposite. We want to stay in the first division — at the heart of Brussels — with Germany, France and Spain. With her we’ll be relegated to the second division, with Hungary and Poland.”
For all Meloni’s efforts to portray herself as a mainstream conservative, Catherine Fieschi, author of Populocracy: the Tyranny of Authenticity and the Rise of Populism, describes the Brothers of Italy leader as “deeply ideological” and says she has used the “ideas of the traditional Christian conservative right” to tap into a potent strain of the population.
“She has understood perfectly that Italians are sick of bombast but don’t want technocracy either,” Fieschi says. “She really is a nationalist conservative. What we are going to see is ‘Italy First’.”
Additional reporting by Ben Hall in London and Giuliana Ricozzi in Rome. Data reporting and analysis by Federica Cocco in London
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Source: Financial Times