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Populism in Europe: the Italian exception

15 November 2018

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As populism in its variegated constellations is marking a world-wide retrenchment from globalisation, it has become a new form of polity contestation in Europe. Indeed, from the Alternative fur Deutschland in Germany, to the Freedom Party for Austria and the Sweden Democrats, the most recent rounds of elections have seen Eurosceptic parties gaining ground by adopting an increasingly tough rhetoric towards Brussels.  However, as EU member states have all been destabilised by a populist-eurosceptic rapture, these parties traditionally are confined as governing junior-partners or remain mostly in opposition. As, for instance, it is the case with the National Front (FN) currently in opposition to Macron in France or with the Freedom Party (FPO) as a junior-coalition partner in Austria.

Italy is therefore the only country at the EU’s core that is testing the capacity of ‘populist movements’- the League and the Five Stars (see text box) - to establish their own agenda in government. In fact, while the recently formed Austrian Government is led by Chancellor Sebastian Kurtz – who is the leader of the traditional Christian democrat Austrian People’s Party (OVP) -, neither of the two Italian centre-right and centre-left mainstream parties succeeded in staying in power. In other words, apart from Italy, no other government in a core EU member state is governed by an alliance of two outsider, Eurosceptic parties.

That is why the Italian political context, which has also attracted much attention from Steve Bannon, exhibits a certain degree of novelty whose understanding is conditional on pursuing new and enriched venues of analysis about the politics of the EU.

Italy has long been one of the most Europhile countries across Europe. It is crucial to emphasise that the Peninsula was one of the six founding member-states of the Union, holding a key strategic role within the Cold War geopolitical order, and a country that benefitted at once – largely due to European integration – from low interest rates (cheap state’s borrowing) and a competitive trade advantage in its export-markets. Nonetheless, owing to EU governments’ reaction to the 2007/08 global financial crisis - namely the enforcement of southern member states to drastically tighten their fiscal policies in the midst of the recession - the country has been severely exposed to sovereign debt contagion. On top of that, while northern countries’ growth-rates accelerated while catching up with the global expansionary phase, Italy has instead been muddling for long into a sluggish economic recovery, generally not perceived well among its voters. Furthermore, as the country’s poor economic performance in the midst of the austerity years exacerbated the populist / nativist rhetoric which pits Italians and foreigners against each other - both for the accession to social benefits and the downward dumping effect in low-skills job market sectors – this has also resulted in a disturbing and worrying upsurge of anti-immigration feelings. Therefore, the combination of socio-economic marginalisation, predominantly in the Mezzogiorno (southern regions), and the spreading fear of the invasion of refugees and migrants, especially in the North, created an explosive context prone to be exploited by extreme political forces. Hence, as the Italians went to the polls on 4 March this year, its two most eurosceptic parties – the right-wing League and the anti-establishment Five Stars Movement – stood as the undisputable winners of the general election. While the League, with its 17%, i.e. about 5,7 million votes, emerged as the strongest political force within the centre-right coalition, the Five Stars Movement topped the polls with an astonishing 32,2%. Accordingly, the two traditional parties on the centre-right and the centre-left, Silvio Berlusconi’s Forza Italia (14%) and Matteo Renzi’s Partito Democratico (18%), suffered considerable electoral losses. Followed by the country’s longest political deadlock, this historical reconfiguration of the political landscape eventually resulted – with much surprise for many observers - in the formation of a joint parliamentary majority between the two anti-establishment parties.

Taking office in June, the first four months in government have so far been much more about party-positioning, with – as recent polls show - the League leader and Interior Minister Matteo Salvini quickly taking over the Five Stars as a result of his tough stance on migration and national sovereignty vis-à-vis the EU authorities, rather than about real and substantial policy-changes. However, in order to fulfil their costly electoral pledges to revive the country’s lukewarm economic growth by boosting additional public spending and slushing business taxes at once, on 27 September, the Government drafted a first version of the budgetary bill which estimated a deficit of about 2,4% for three consecutive years . Seen by many as a hazardous bid from Luigi Di Maio – Vice Prime Minister and leader of the Five Stars – to mobilise its own southern-based constituencies prioritising a national/citizen income scheme, the bill also contains more palatable policies for the League supporters, such as slushing taxes for business and a tax amnesty. Eventually, the two parties both agree on overhauling the current pensions rulebook, cutting the retirement age from 67 to 62.  Therefore, in clear-breach with the EU’s Stability and Growth Pact rules, especially when it comes to reducing the country’s general debt-GDP ratio towards 60% - that still stands at around 130% -, on 5 October, the EU Commission issued its first official letter, warning Rome about serious concerns over the sustainability of its budgetary plans. Accordingly, while on 8 October, Italy’s borrowing costs spiked hitting four-years highs, the stand-off between Rome and Brussels was seen by many as potentially jeopardising the overall governance of the Euro. In effect, already under pressure from the much-debated institutional split between ‘risk-reducing’ and ‘risk-sharing’ approaches, with northern fiscal-conservative countries demanding ‘no-political assessments’ from an independent authority like the European Stability Mechanism (ESM), the EU Commission’s key political role in monitoring and policing member-states’ economic policies will be critically tested by the showdown with the populist government. Whether sanctioning Italy for breaching the SGP rules would much likely backfire seven months ahead of the European Parliament elections, going soft would instead certainly shatter the political reputation of the Commission the members of which will be replaced next year.

Therefore, while many observers are expressing concerns about an upcoming eurosceptic revolution  in the next European Parliament – even if those concerns largely underestimate the persisting lines of division among the populists at the EU level, a topic that Euro Matters will cover on December - , what the case study on Italy ultimately suggests it is that the most insidious power-shift is de facto already sowing its seeds within the political asset of the Euro Governance,. In fact, a potentially alarming scenario is the one in which populist forces and fiscal-conservative governments could possibly (and unintentionally) ally in order to tighten further the intergovernmental grip over the EU institutional architecture at the expense of the Commission and its supranational powers. Here, again, recent EU summits on migration have shown the extent to which the political alliance between nationalist governments can impair the role of the Commission to implement coordinated policy-making initiatives.

Experts and market investors have so far ruled out the scenario where an Italian financial turmoil would trigger the recurrence of an EU-wide debt contagion. However, by perpetrating the politics of the crisis with the complacency of some parties within the European People’s Party group (EPP), Eurosceptics and populists might eventually succeed in ( nation-states back into the EU’s)core power. Indeed, setting the stage for a Europe of Nations would inevitably, and fatally, reverse the EU integration process.

Antonio Astolfi
Intern at the Centre for European Research

The Five Stars Movement

Founded in 2009 by the comedian Beppe Grillo, the party initially emerged as an online platform connecting local movements. Indeed, at that time, observers compared its style with the German Pirates Party.

However, as Italy went into financial troubles in the midst of the eurozone crisis – and as a result of the latter the Monti caretaker government took over the Berlusconi coalition in 2011 – the party rapidly gained the national stage. Therefore, thanks to the charismatic and demagogic leadership of Grillo, the party started portraying itself as the ‘representative of the people’ against the corrupted politicians. At the 2013 general elections, this strategy payed-off with the party coming close to the centre-left Democratic Party (PD) obtaining an outstanding 25%. Following five years of fierce opposition to the governing centre-left/centre-right coalition, during which it won the Mayoral elections in Rome and Turin, the Five Stars approached the 2018 general elections as the strongest opponent of the ruling Democratic Party. During the campaign, it pledged to pass a national/citizens income scheme for the poorest, to abolish the privileges of the ruling-classes (Casta) and to overturn the pensions rulebook.

Currently led by Luigi Di Maio, the party has always claimed to be beyond the traditional right/left cleavage as it also wishes to overcome representative democracy by establishing a new form of direct regime. Thus, while offering a clear classification of the party is extremely problematic, its adoption of the ‘people’ as an honest and coherent entity against the elite, alongside its dangerous  misconception of the separation of powers between the legislative, executive and judiciary, make it resemble much more closely with the Latin American populist regimes.

The League

Founded in 1991 by Umberto Bossi, the party was originally a federation of several regional parties of Northen Italy. It also took part as a junior partner within – some of - the centre-right Governments led by the TV mogul Silvio Berlusconi from 1994 to 2011. However, once elected as its leader in 2013 – with the party polling at around 3% confined at the margin of the italian political context -, Matteo Salvini revolutionised the party by successfully bringing it in line with the far-right, nationalistic and eurosceptic tradition epitomised at the EU level by the French Front National.

Therefore, by changing the party name from ‘The Northen League’ to ‘The League’ in the run-up of the last 2018 general elections, Salvini completed its transformation from a secessionist regional party (opposed to the central Government in Rome) into a national political force (opposed to Brussels).
Throughout the last electoral campaign, it pledged to halt immigration by deporting 500.000 illegal migrants, to take back control from Brussels in terms of economic policies and borders management and, finally, to overturn the pensions rulebook approved by the Monti caretaker government in 2011.
The League currently tops the most recent polls with a popular consensus of around 30%.



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