Five things you should know about Italy’s new government

By Edoardo Lanfranchi

After 88 days of political uncertainty, the two main winners of Italy’s general elections have reached an agreement. Luigi Di Maio, leader of the anti-establishment Five Star Movement, and Matteo Salvini, secretary of the far-right League party, have jointly won over half of the popular vote last 4th of March, and have now agreed on a contract that lays down the program for a coalition government. The new Prime Minister is Giuseppe Conte, a previously unknown lawyer close to the Five Star Movement, who will have to practically share his leadership in the new government with the two populist leaders – who will enter his cabinet as Labour and Interior ministers respectively.

The final deal was closed after days of political turmoil generated by the country’s president – Sergio Mattarella’s – decision to veto the appointment of a eurosceptic economist as Finance Minister, proposed by the League. In Italy, the president has a largely ceremonial role, but he is responsible for nominating the ministers and can express his doubts on nominations that he believes would harm the national interest. In a televised speech on the 27th of May, Mattarella motivated his decision by pointing to the instability of the international financial markets, with the interest rates on Italian government bonds hiking as investors feared political uncertainty. After a few days of chaos, with new elections looming, a new deal was reached and Mattarella appointed Conte as PM after all, with a different name as the Finance minister.

Foreign investors welcomed the formation of a new political government with more optimism, the risk of Italy facing new elections in the next months is low and all eyes are now turned to the agenda of the first fully populist government leading a major European country. Italy’s political situation is interesting for various reasons. The country is the third-largest economy of the Eurozone and has the second to largest debt to GDP ratio. The surge of populist politics both in Europe and America has largely characterised the past five years, and Italy is now a useful case study to make speculations about Europe’s future. So here are five things you should know about its new government.

1: It is not very “anti-establishment” at all.

Both the League and the Five Star Movement have led campaigns based on a strong opposition to Italy’s last four governments, all dominated by the centre and centre-left. They have been strongly critical of the EU and of Italy’s political establishment, whom they hold responsible of passing a set of neoliberal policies – such as two very unpopular pension and labour reforms – that hurt the weakest of Italians while doing nothing to get Italy out of the crisis that hit it after 2008. It would be easy for both supporters and opponents of the new government, therefore, to portrait it as one composed of political outsiders attempting to radically change the status quo.

Yet this is far from reality. The League has been in government – in a coalition with Silvio Berlusconi’s centre-right – in the 1990s, and then again from 2005 to 2011. The former secretary of the League and minister in Berlusconi’s government – Roberto Maroni – contributed to the design of the EU’s immigration policies that many Italians now consider unfair. The new Finance minister is a former advisor of Berlusconi’s administration, the Public Administration minister is a lawyer who once defended Italy’s longest serving Prime Minister from Mafia charges, and the Foreign minister already served in two centrist cabinets. The Five Star movement’s representatives are also surprisingly close to Italy’s political elite. The defence minister, for example, is a well-known university professor and NATO advisor.

Overall, therefore, this looks more like an ordinary, right-of-centre Italian government, close to the interests of Italy’s industrial elite and in continuity with Italy’s political past.

2: It engages in a racist and homophobic rhetoric that should seriously alarm us.

The day after his nomination, the new Family minister, Lorenzo Fontana declared that “gay families do not exist” and that therefore he was not concerned with their rights. Fontana is a League politician who has campaigned against abortion rights, he believes that an LGBT lobby is trying to impose a gay ideology onto children and looks at Russia as a model of an “identitarian society”. Since Salvini became its leader in 2013, the League has moved to more extremist positions than those it held when it was in government – and the party’s rhetoric has become increasingly sexist, racist and homophobic. Senior League politicians, for example, have referred to a centre-right minister – a woman of colour – as an “ape”, or have publicly burnt down an inflatable doll representing Italy’s female president of the House of Representatives. Since he has become Interior Minister, Salvini has declared that “the good times are over” for migrants coming to Italy, and that he plans on opening hundreds of centres to expel them. Unsurprisingly, former Trump advisor and American alt-right activist Steve Bannon is a great fan of the new government and seems to be spending a lot of time in Rome at the moment. “Today”, he told an Italian newspaper, “Rome is the centre of global politics. It is here that the revolution will begin”. Whether such a revolution will actually happen or not, the rhetoric that underlies these first few days of Conte’s government can only be deemed scary.

3: It has a liberal, not a radical, economic agenda (and leaving the Euro has never been an option).

The initial contract between League and Five Star Movement included the introduction of a universal basic income for all Italians – one of the Five Star’s most popular proposals – as well as the League’s proposal of reforming the Italian tax system by introducing a flat tax on income. Only the second of these proposals is still clearly in the government’s plans. The new Finance minister, Giuseppe Tria, is a liberal conservative economist, and his plans seem to be more inspired by Thatcher and Reagan, than by Castro and Chavez. Salvini has recently declared that rich Italians should pay less tax, because they save and invest more.

Moreover, while both parties have in the past campaigned for an Italian exit from the Euro, they had both dropped any proposal like this well before the last general elections. There is nothing radical, therefore, about the new government’s economic plans: they will stay in the Euro, liberalise the Italian economy and reduce redistributive taxation. Those who voted for the Five Star Movement in the hope of seeing radical, leftist policies being passed through will be very disappointed.

4: It signals that there is a conflict between market interests and democracy, but only on economic policies.

President Mattarella’s veto to Conte’s initial proposal was explicitly motivated by reference to foreign investors and financial markets. European commissioner Günther Oettingen went even further, a few days ago, apparently suggesting that markets will “teach Italians how to vote” in the future. Populism itself is the expression of citizens’ opposition to the social and economic status quo. In Italy, voters turned to Di Maio and Salvini because they wanted radical change, and they felt that the political and financial establishment had imposed unjust policies on them. To an extent, they were not wrong: many economists agree that the austerity measures passed by Italy’s traditional parties hurt those who were most vulnerable and already poor, while they failed to solve Italy’s financial problems. These policies were prescribed by the EU and other international institutions and warmly welcomed by financial investors, with no clear democratic mandate by the Italian people – as happened in most European countries. Unsurprisingly, therefore, it is in the poorest areas of Italy that the populist parties made most gains. And even less surprisingly, those same institutions and markets were not happy when the populists attempted to form a government.

This was until Di Maio and Salvini dropped their radical economic proposals. As soon as the new government’s economic plans were put back in line with those of a liberal conservative government and with the rules of the Maastricht Treaty, Italy’s interest on bonds went down, Mattarella approved the new list of ministers and everyone seemed to sight in relief. The problem with populist parties, hence, seems to lie in their economic agenda. If they stick to traditional, neoliberal recipes, the fact that they are racist, homophobic and chauvinistic will not shock foreign investors, international financial institutions or the European industrial elite as much.

5: If you take a picture of Giuseppe Conte and cover his hair with your finger, you get a younger Silvio Berlusconi.

Surely that says something.

Photograph Marco Verch via Flickr

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