The populist Five Star Movement (M5S) and the right-wing and anti-immigration League have agreed the terms of a coalition government which – pending a vote of confidence by the Italian parliament – could rule Italy for the next five years. Open Europe’s newly published briefing,
“Marriage Italian style: The Five Star Movement – League coalition agreement and its implications for Europe”, considers what implications the new government could have for Italy’s role in Europe.
To read the full briefing, click
hereOpen Europe’s Research Analyst, Enea Desideri, said,“The level of disruption that the new Italian government could cause in Europe is substantial. The League is an openly Eurosceptic party – it has in the past regularly clashed with EU institutions, and has recently confirmed its hostility towards them. Meanwhile, the European stance of the Five Star Movement is much more difficult to describe as simply Eurosceptic. But, the party has been very ambiguous in its approach to integration, and an alliance with the League increases chances that its ‘Eurocriticism’ could turn into outright ‘Euroscepticism’.”
“Italy’s demand to review key European policies, from immigration to the governance of the Eurozone, is going to become even more vocal, while its support for further integration in other key areas will certainly turn more lukewarm or reverse altogether. For instance, Italy’s traditional preference for greater integration in the field of defence is likely to end.”
“While they make the need for a reform of the Eurozone more apparent, the radical economic proposals put forward by the two parties could have also made it less likely. Plans for completing the Banking Union had already been questioned by the lukewarm German response to French President Macron’s reform proposals. The odds of seeing these reforms go through do not look any better with Italy now asking to review bail-in rules, and to use money from the European Social Fund to finance the cost that the introduction of a universal citizenship income would incur.”
Key conclusionsThere are important differences between the two coalition parties, and much will depend on which of the two succeeds in imposing its political line on EU matters. The League is openly Eurosceptic, whereas the M5S are more difficult to categorise – decidedly ambivalent on European integration, but more conciliatory in their approach to EU reforms. Both parties are relatively untested in power. It is likely the coalition will be a strong voice for change, but what kind of change, and will they be able to influence Brussels?
The final coalition agreement is less radical than some in Brussels had feared, given the historic positions taken by the two parties. This emphasises that the immediate impact of the new government may be more limited than some expect. However, this should not obscure the long-term potential of a M5S-League coalition to significantly shift the position of Italy within the EU.
The impact of a new populist government on the prospects for policy change at EU level is twofold. On the one hand, the election of a government strongly critical of EU policy in a number of areas makes the need for reforms more difficult to ignore. At the same time, however, the new government’s radical approach, particularly when it comes to its economic policies, is likely to increase the gap between competing visions in Europe, making a breakthrough more difficult to achieve.
Expect the new government to diverge from previous positions taken by Italy at EU level. Demands to review key European policies, from overcoming the Dublin Regulation, which requires migrants to request asylum in the country of their first arrival in the EU, to the relaxation of fiscal rules governing the Eurozone, will become even more vocal. At the same time, support for further integration in other key areas including an integrated European defence, may turn more lukewarm or reverse altogether. In foreign policy, Italy will push for closer ties with Russia.
The future of the Italian economy, particularly in the light of the suggested economic and fiscal reforms, will be crucial. Radical proposals such as the introduction of a flat tax and of a universal citizenship income rest at odds with European fiscal parameters. Should the Italian economy take a turn for the worse, expect the new government to blame the EU – in which case tensions with Brussels would markedly increase.
Whatever happens, a M5S-League government continues the redrawing of Europe’s geopolitical map. Following Brexit and the election of Macron in France, the Italian elections have produced the third major change in power dynamics within the EU in a very short space of time.
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