Tuesday

18th Jun 2019

Unknown academic to lead Italy into EU clash

  • Guiseppe Conte will have to defend Italy's policies at the next EU summit (Photo: quirinale.it)

Italian populists have picked an unknown academic to lead them into conflict on EU finance and asylum rules.

The Five Star Movement (M5S) and the League put forward Giuseppe Conte, a 53-year old law professor, to be Italy's next prime minister on Wednesday (23 May).

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  • Conte claimed to have studied at New York university, which it denies, among other accolades (Photo: quirinale.it)

The president approved their man after the two populist parties came out on top in elections in March and pledged radical steps in their coalition deal.

They plan to pile on €100bn of extra debt by boosting welfare and cutting taxes, crashing through EU limits, which they want to renegotiate.

They plan to deport 500,000 asylum seekers despite EU laws which say Italy is responsible for their care.

They also plan to end EU sanctions on Russia, destroying a four-year old European consensus.

Conte, the law professor from Florence and Rome, will have to defend all that when he represents Italy at the next EU summit in June.

The fact that he has been caught embellishing his academic CV with bogus accolades will do little to augment his authority.

"Outside of this palace there's a country that rightfully awaits a new government and answers. What is about to be born is the government of change," he said on Wednesday.

He would be the "defender of all Italians on the international and European stage", he said.

Conte and his party masters will now hand out ministerial posts before the Italian parliament completes formalities on the new government.

The procedure ends 11 weeks of uncertainty after the election, but starts a countdown toward a conflict with EU powers.

"Italians must understand that the future of Italy is in Europe and nowhere else, but there are rules to respect," French finance minister Bruno Le Maire told French radio this week.

"The entire financial stability of the eurozone would be threatened," if Italy violated EU debt and deficit ceilings, he added.

Jean-Claude Juncker, the European Commission president, issued another warning moments before news of Conte's nomination on Wednesday.

"We must have a repatriation that is carried out in line with all international rules, and, of course, with human rights, of those Africans who will not be granted asylum in Europe," he told press in Brussels after meeting with African Union president Moussa Faki.

"We'll make sure we defend human rights, including those of Africans now in Italy," Juncker said.

Italy's new vector could lead to commission infringement proceedings or so-called Article 7 sanctions on rule of law in the asylum case.

But even if the EU gives Conte a soft ride, the sovereign bond markets are likely to punish Rome and its banks for overspending.

That could provoke a financial crisis in the eurozone's third largest economy.

It could also provoke a political crisis in a country where the top parties, M5S and The League, had, until recently, questioned Italy's eurozone membership.

"Even if they have retreated on leaving the euro, what they're proposing in terms of the social program and minimum guaranteed salary will blow a hole through all the eurozone rules," Andrew Gardner, a former US ambassador to the EU and investment banker, told The New York Times newspaper.

"Investors are underestimating the risk," he said.

"Every leader has to take account of the bond markets. Even Berlusconi had to," he added, referring to Silvio Berlusconi, a former Italian leader and rule-breaker.

New wave?

The new wave of populism in Italy comes after a far-right party joined the Austrian government, amid Brexit, and amid EU clashes on rule of law with Hungary and Poland.

But it also comes after populists lost elections in France, Germany, and the Netherlands last year.

A new EU survey published on Wednesday painted Italy as an outlier rather than as part of a growing problem in terms of political trends.

Just 44 percent of Italians said EU membership had benefited their country, the lowest score in the "eurobarometer", but even this was up from 39 percent in October.

At the same time, 67 percent of EU citizens overall gave membership the thumbs up - the highest level since 1983 and up from 52 percent at the worst of the financial crisis in 2011.

The overall approval included British citizens, who were taking part in one of their last EU surveys before Brexit next year, and 53 percent of whom also backed EU membership.

Call for 'neutral' government fails to end Italy's deadlock

The leaders of the two main political parties want elections in July, despite fears of low turnout and prolonging the uncertainty. EU officials are worried that a prolonged political uncertainty would further weaken the Italian economy.

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