Italian Politics: Did They Live Happily Ever After?

Against all odds, the unlikely coalition of the 5 Star Movement and League, which came out of Italy's March general election, were able to pull back from the brink of political collapse by accepting the conditions of Italian President Sergio Mattarella and striking a new deal to form a government, which Mattarella swiftly accepted. Mattarella had previously vetoed the coalition's candidate for Finance Minister Paolo Savona (see previous article) and started to form a technocratic government that would lead until new elections in the fall. However, after a 4- hour meeting on Thursday, May 31, between the two parties’ leaders Luigi Di Maio and Matteo Salvini, a new agreement on the ministers was reached. On the same day, designated Prime Minister Giuseppe Conti met Mattarella, formally accepted the appointment, and submitted the new cabinet list, which was officially approved by the Italian President.

The new government is composed of eighteen ministers. Among them, five are women, nine are representatives of the 5-Star-Movement, six are members of the League, and three do not belong to any party or coalition. Both the 5-Star-Movement’s Luigi Di Maio and the League’s Matteo Salvini will serve as Vice Prime Ministers.

Source: The Cabinet of Ministers of the new Italian Government with President Sergio Mattarella Il Governo

Interestingly, economist Paolo Savona, who had been overtly rejected by Mattarella as Finance Minister due to his Euroscepticism, was appointed Minister for European Affairs, a lower-profile position but one in which he will still be able to work to implement promises to drastically change EU rules. He was replaced as Finance Minister by Giovanni Tria, Professor of Economics at the University of Tor Vergata in Rome, who is not affiliated with any party. Like Savona, Tria has a critical stance towards the EU monetary union, considering the German surplus a symptom of its failure to achieve economic convergence among EU Member States. In spite of this, he is still pro-European and, in contrast to Savona, he never considered the option of Italy leaving the Eurozone as a concrete solution to overcome Italy’s economic crisis. He rather calls for “necessary reforms for the survival of the Euro” and underlines how "the main risk is not exit from the Eurozone, but rather its implosion".

5-Star-Movement leader Di Maio is Minister for Labor and Industry. He will therefore have the task, among others, of implementing one of the main promises of the 5-Star-Movement’s platform, i.e. the “citizenship income” , a basic income of up to 780 euro per month that would be guaranteed to Italian citizens under certain conditions.

The League’s leader Salvini is Interior Minister and thus in charge of Italy’s migration policy. In his first official visit to Sicily two days ago he claimed that the island “is becoming the refugee camp of Europe” and pledged to work to discourage "thousands of desperate people who have the illusion that in Catania, and in Sicily, and in Italy there is housing and work for everyone [...]. There is not enough housing and work for Italians, let alone half the continent of Africa."

The front pages of many international newspapers welcomed news of the successful formation of an Italian government with some concern for the future of the EU. In particular, referring to ‘Italy’s new populist government’, American broadcast NBC predicted that "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 time for Europe to be divided and directionless".

Similarly, The Wall Street Journal stated that "Europe’s fate may well be decided in Rome. Imagine, in American terms, a coalition between Bernie Sanders and the tea party: an orgy of government spending on one side, tax cuts and small government on the other. Can’t be done? In Italy, non fa niente—it doesn’t matter. We can eat our pizza and have it too. While 5 Star seeks a guaranteed income of €780 (around $900) a month, the League will pursue its suggested flat tax of 15%. Now do the arithmetic. Italy’s public debt has already surpassed 130% of gross domestic product, and European hedge-fund manager Joseph Oughourlian predicts that the new government’s goodies could swell the annual deficit by more than €150 billion."

Many European media commented in particular on Salvini’s anti-immigration statement. The New York Times underlines how Salvini, "is expected to speed up expulsions, break up Roma camps and seal Italy’s borders. On Friday he said, 'The migrants who camp out here for lunch and dinner are evidently too many'."

In the same way, British broadcaster BBC points out how "The government's critics say its plan to repatriate migrants is unworkable and risks fomenting racism and politicising a humanitarian issue.".

In an interview with German weekly newspaper Frankfurter Allgemeine Sonntagszeitung German chancellor Angela Merkel admitted Italians had “felt abandoned” by the EU during the migration crisis and underlined the need for a “common asylum system and comparable standards to establish who can and who cannot stay”. However, she also specified hat cooperation will not translate into relieving the debts Italy holds toward the EU.