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The European Parliament elections were hardly a triumph for the populist parties. But in Italy, the far-right nationalists were on a roll.
The League won 34.3% of the vote, doubling its share in last year’s general election. The 5 Star Movement collapsed to just 17.1%, but Brothers of Italy, a smaller far-right party, took 6.5%. Two in five voters chose to back Italy-first parties opposed to immigration and EU’s economic, fiscal rules.
This result puts the nation on a clear collision course with Brussels and the rest of the union. Matteo Salvini, the League leader, thinks he has a mandate to overhaul the bloc’s immigration and economic policy. But in Europe, he will have few allies.
The next European Parliament will likely be led by a coalition of pro-European forces, including tahe Social Democrats, the People’s Party, the Liberals and perhaps the Green. The Europe of Nations and Freedom has gained seats from 2014, but is likely to remain in opposition. The League’s success is highly relevant for Italy, but much less so in the EU.
For the past decade, Italy has diverged from the rest of the bloc economically. In 2008, the country’s GDP per capita was nearly 6% more than the EU average, according to Eurostat. It is now 6% less. This discrepancy has now spilled into politics. The League’s demands will almost certainly be rebuffed by the next
European Commission.
The League would have had a difficult time to convince its fellow nationalists, many of whom are fiscal conservatives – especially when it comes to other country’s public finances. This becomes even harder when your political opponents are in charge of the EU’s institutions.
This contrast between the League’s national dominance and European irrelevance spells trouble for the EU. Since the sovereign debt crisis in 2011-12, the dominant narrative in Italian politics has been that the EU – and the euro zone in particular – has treated the country unfairly.
The EU now faces a dilemma. It could try to appease the nationalists, as it did – to some extent – in the 2019 budget. The Italian government, including the League and the 5 Star Movement, is already demanding greater flexibility for its fiscal plans for next year. In theory, Rome should increase VAT by more than 20 billion euros, but the political parties are already talking of new giveaways, including a steep reduction in income tax. The Commission may have no choice but to take a hard line, but this will further incense Italy’s nationalists.
The biggest test, however, is for Salvini himself. So far, the 46-year-old has played his hand masterfully. First, he took a dying League from political irrelevance to become the largest party in the center-right. Then he agreed to an alliance with the 5 Star Movement, even though the League was nominally the junior partner.
The League is now the dominant force in Italian politics and can choose to continue governing with 5 Star or force a new election in the hope of forming a right-wing government.
But what does Salvini plan to do with all these votes? This fundamental question has never been addressed.
The party has an openly euroskeptic faction and a more realist one, which wants fewer immigrants, lower taxes – but no messing around with the single currency. These contradictions will need to be resolved, and that moment is fast approaching.
—Bloomberg
Ferdinando Giugliano writes columns and editorials on European economics for Bloomberg Opinion. He is also an economics columnist for La Repubblica and was a member of the editorial board of the Financial Time