Sunday

27th May 2018

Opinion

The populists may have won, but Italy won't leave the euro

  • Five Star Movement leader Luigi Di Maio. The nine-year old anti-establishment party now is the establishment, having topped the polls in the Italian election. (Photo: RevolWeb/Flickr)

The outcome of the Italian elections is a test for the EU, but one it will likely survive.

In Sunday's vote, populist parties saw significant gains, while the Democratic Party held firm only in its traditional Tuscan strongholds.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

  • Greece's Alexis Tsipras offers a model of a radical tamed in government (Photo: Greek PM office)

Eurosceptic tabloids across Europe will herald the result as evidence of the single currency's imminent demise.

Indeed, a government including the anti-establishment Five Star Movement or far-right Lega would not do the euro any favours.

But it is unlikely to cause the type of rupture that the likes of the British europhobic Daily Mail will this week gleefully prophesy. There are several factors that militate against this.

1. The Five Star Movement may choose not to govern

Part of the fear associated with the Five Star Movement is to do with its novelty and unpredictability.

In policy terms, it aims to appeal to a broad spectrum of voters, on the left and on the right. Its followers are roughly an equal split.

The movement's political programme demonstrates no coherence or direction. It is attractive as it represents change.

However, to govern it must form a coalition with the left or the right. This will necessitate a stark choice: Either, swing to the centre-right, and do a deal with Forza Italia and the Lega; or pursue an alliance with the centre-left.

In both cases, these coalitions would be uncomfortable. More importantly, whichever direction it would shift, the Five Star Movement is bound to alienate around half of its electorate.

The option to remain in opposition may yet prove an attractive one, as government heralds an uncertain future and would require a politically damaging transformation, for which the party is poorly designed.

2. Populists in power change tack

Even if they were to assume power, few projections of what the Five Star Movement would do can yet be made.

However, and while not directly comparable, other regional examples may provide clues.

Greece's far-left Syriza party was elected on a mandate of shaking up the eurozone by an increasingly eurosceptic electorate, suffocating under the weight of crippling austerity.

Like the Five Star Movement, Syriza was a broad church. Disgruntled social democrats rubbed shoulders with anarchists and communist dissidents.

Its leader, Alexis Tsipras, emerged on the party's hard-left – a young firebrand with an axe to grind. During the early years of the crisis, he openly challenged Greece's euro membership.

Yet, as he crept closer to power, the anti-euro rhetoric was replaced by euro-reformism and promises to renegotiate the deal between Greece and her creditors.

As prime minister, Tsipras has since overseen the transformation of Syriza into Greece's new centre-left, encapsulated by his eulogy of Greece's social democratic giant, Andreas Papandreou in a recent op-ed. While Syriza's metamorphosis occurred under considerable external pressure, the shift is real.

Of course, Italy is not Greece. Syriza too, as a leftist party, is not the Five Star Movement. But the example is illustrative of what can become of the populist when thrust into power. Government changed Syriza; and it will do the same to the Italian populists.

3. No appetite for 'Italexit'

While Italy's urban and educated elites remain staunchly pro-European, larger sections of society have fallen out of love with the EU.

The EU's own eurobarometer scale confirms this. In the last decade, Italy has jumped from being among the most fervent supporters of the EU to statistically the most eurosceptic of all eurozone members.

It is presumptuous, however, to assume that this dissatisfaction will translate into a vote to leave the euro. In fact, polls show continued support for Italy's euro membership.

A major policy shift undertaken towards the end of 2017 by the Five Star Movement is illustrative of this trend. For several years, the party had advocated a referendum on leaving the euro.

Yet, in a seeming volte-face, it removed any reference to the promise from its electoral manifesto.

The populist leader of the Lega, Matteo Salvini, while demonstrating at times visceral opposition to the EU, has performed a similar policy U-turn. Given the fragility of the Italian banking system and the uncertainty of the day after, there is little popular appetite for Italexit.

4. Immigration the burning issue, not the euro

In power, Di Maio or Salvini would clearly rock the European Council boat. But there is a feeling that the euro debate has been supplanted by the more urgent topic of immigration – in particular, the very real refugee crisis in the Mediterranean.

As such, any clash with Europe is more likely revolve around this topic.

This may play out in surprising ways. In substance, the policies that will be pursued will differ to the those made by the Visegrad Four.

Given Italy's geography and the extent of its refugee problem, the populists will likely demand greater solidarity from the European partners.

In this sense, the they may discover an unlikely ally: the European Commission. The commission has long made the case for an equitable distribution of refugees according to a quota system, but has found opposition in the former communist member states and others like Denmark and Austria.

Germany too fears its own far right, while France sits on the fence. Paradoxically, Italy's populist moment might well re-invigorate the movement for a 'European' solution to the refugee crisis.

So, what does this all mean for the EU?

Clearly, Italy will continue to pose a problem to Europe. Its financial stability remains uncertain and the reforms, both structural and constitutional, which the country desperately needs for its renewed competitiveness are no clearer to promulgation.

For now, any projections of the next Italian government's composition are hard to make. However, whatever the outcome, it seems unlikely that Italy will be leaving the euro soon.

Too many factors work in opposition: It is not certain that the populists will lead the government.

If they do, their policies would likely shift towards realism. The Italian people, while increasingly eurosceptic, fear the impact of a euro exit on the fragile Italian banking system, while the populist, and popular, attention has shifted towards the refugee crisis.

Italexit? Not yet.

Michael Cottakis is president of the 1989 Generation Initiative at the European Institute of the London School of Economics

EU: 'Keep Calm', as Italy struggles to form government

Both the leaders of the populist Five Star Movement and far-right League party claim the position of Italian prime minister, amid renewed eurosceptics remarks while Europe is waiting for a stable government.

Italy votes to become more eurosceptic

A hung parliament is expected, as preliminary results show a good outcome for the anti-establishment Five Star Movement and the anti-immigrant Northern League.

Corruption report: Hungary gets worse, Italy makes progress

Italians, Czechs and Latvians perceive less corruption than a few years ago in Transparency International's annual ranking. The Berlin-based NGO said Finland was a 'worrying case', whilst Bulgaria - which holds the EU presidency - is EU's most corrupt.

The dangers of resurgent nationalism in Greece

Virulent nationalism in Greece has been stirred up in the context of austerity and renewed negotiations with Macedonia. Recent attempts by the government to address the inequalities suffered by LGBT persons have also been met with a reactionary backlash.

Integration of Syrian refugees in Europe needs scrutiny

Most refugee-related services are outsourced to the private sector and NGOs, which are not adequately monitored and evaluated. When governments and EU institutions provide funding for refugee projects, they should scrutinise the NGOs and private players they work with.

News in Brief

  1. Italy set to pick eurosceptic finance minister
  2. UK foreign minister fooled by Russian pranksters
  3. Rajoy ally gets 33 years in jail for corruption
  4. Close race as polls open in Irish abortion referendum
  5. Gazprom accepts EU conditions on gas supplies
  6. Facebook tells MEPs: non-users are not profiled
  7. Commission proposes ending France deficit procedure
  8. UK households hit with Brexit income loss

Stakeholders' Highlights

  1. Counter BalanceEuropean Ombudsman requests more lending transparency from European Investment Bank
  2. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  3. Centre Maurits Coppieters“Peace and reconciliation is a process that takes decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  4. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up
  5. Macedonian Human Rights MovementOld White Men are Destroying Macedonia by Romanticizing Greece
  6. Counter BalanceControversial EIB-Backed Project Under Fire at European Parliament
  7. Nordic Council of MinistersIncome Inequality Increasing in Nordic Countries
  8. European Jewish CongressEU Leaders to Cease Contact with Mahmoud Abbas Until He Apologizes for Antisemitic Comments
  9. International Partnership for Human RightsAnnual Report celebrates organization’s tenth anniversary
  10. Nordic Council of MinistersNordic Cooperation Needed on Green Exports and Funding
  11. Mission of China to the EUPremier Li Confirms China Will Continue to Open Up
  12. European Jewish CongressCalls on Brussels University to Revoke Decision to Honour Ken Loach

Stakeholders' Highlights

  1. Sustainable Energy Week 2018"Lead the Clean Energy Transition"- Register and Join Us in Brussels from 5 to 7 May
  2. EU Green Week 2018Green Cities for a Greener Future. Join the Debate in Brussels from 22 to 24 May
  3. Nordic Council of Ministers12 Recommendations for Nordic Leadership on Climate and Environment
  4. Macedonian Human Rights MovementOxford Professor Calls for an End to the Anti-Macedonian Name Negotiations
  5. ACCAPeople Who Speak-Up Should Feel Safe to Do So
  6. Mission of China to the EUProgress on China-EU Cooperation
  7. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  8. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  9. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  10. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  11. UNICEFCalls for the Protection of Children in the Gaza Strip
  12. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations

Stakeholders' Highlights

  1. Nordic Council of MinistersImmigration and Integration in the Nordic Region - Getting the Facts Straight
  2. Macedonian Human Rights MovementMacedonians in Bulgaria Demand to End the Anti-Macedonian Name Negotiations
  3. Counter BalanceThe EIB Needs to Lead by Example on Tax Justice
  4. ILGA EuropeTrans People in Sweden to be Paid Compensation for Forced Sterilisation
  5. International Partnership for Human RightsThe Danger of Standing Up for Justice and Rights in Central Asia
  6. Mission of China to the EUChina and EU Must Work Together to Promote Global Steel Sector
  7. Swedish EnterprisesEU Tax Proposal on Digital Services Causes Concern for Small Exporting Economies
  8. European Jewish CongressCondemns the Horrific Murder of Holocaust Survivor Mireille Knoll in Paris
  9. Mission of China to the EUAn Open China Will Foster a World-Class Business Environment
  10. ECR GroupAn Opportunity to Help Shape a Better Future for Europe
  11. Counter BalanceControversial Turkish Azerbaijani Gas Pipeline Gets Major EU Loan
  12. World VisionSyria’s Children ‘At Risk of Never Fully Recovering', New Study Finds