Italy held a general election on 4 March. After weeks of deliberation, a government was formed, between the hard-right Lega Party and the populist Five Star Movement. But governing has been fraught. The ideological divisions are the coalition make forming a coherent policy platform challenging. Many of the policies, such as harsh restrictions on immigration, increasing spending on pensions, or lowering taxes, are unrealistic. Most absurd is the coalition’s position towards the EU, which is very much a have your cake and eat it approach. They love the free trade and subsidies of the EU. But they resent having to pay for it all. They demand wealthier European nations subsidise them to a greater extent than they already do. Such parochialism is quite rightly condemned by other EU nations, even if they cannot explicitly say so for fear of incurring the wrath of the Italian people.
In Britain, there are two standard responses to the new Italian government, and both are wrong. The first is the liberal-left response, which proclaims that the rise of Italian populism is due to EU-imposed neoliberalism and austerity. This is wrong for two reasons. The first is that Italian government spending is high, pensions are generous, infrastructure is good, and the debt to GDP ratio is 130%. With a rapidly ageing population and a policy averse to immigration, Italy has no choice but to tighten its belt. Secondly, the Lega Party won the most votes in the North, the wealthier part of the country. Were austerity to blame for anti-immigration sentiment, Lega would have done better in the South.
The other response to Italian politics comes from the Eurosceptic Right, which portrays the election results as a grave threat to the EU’s existence. Italy shows the EU is dysfunctional and riddled by divisions, vindicating Brexit and dooming European integration. This view is also wrong. Italian politics has long played to a populist tune. Politicians of both the left and right have promised the impossible. They praise the benefits of EU membership- mainly access to the world’s biggest market and somewhat generous subsidies. But they insist Italy is exempt from the more liberal aspects of the EU, such as an aversion to state monopolies shutting out foreign competition, or a generous policy towards refugees. On the Euro, Italy’s establishment is even more contradictory. They praise the benefits of belonging to a strong, stable currency with low inflation, low interest rates and the ability to use it in other Euro countries. But they pretend the need to maintain fiscal discipline as a Euro member doesn’t exist. None of this is new. The EU is no more threatened now than it ever has been. Ultimately, the problem is not the EU, which simply seeks to create the level playing field the Eurosceptic Right claims to believe in. The problem is with Italy’s internal politics: it’s dysfunctionality, corruption, and unrealistic expectations. Berlusconi, the leader of the centre-right Forza Italia, is just as much a populist and an anti-immigration fear mongerer as Salvini or anyone in Lega.
The solution to Italy’s political woes is not to indulge in sensationalist talk about the end of the EU. There should be a robust response to the opportunistic critiques of both the left and right. The EU cannot solve Italy’s problems. Rather, what is needed is honesty. Italy’s politicians should be frank about both the benefits and drawbacks of Euro membership. If the Italian people wish to leave the Euro, then everyone should respect that. But the Euro isn’t the main culprit of Italian discontent. The corrupt and sleazy nature of Italian politics, demographic decline, and an unsustainable social insurance system are all far more significant. Only an Italian willing to tell their people the hard truths and make the hard choices can save their country.