Italy’s Populists Come to Terms with Reality

Italian prime minister Giuseppe Conte attends a meeting with Five Star Movement leader Luigi Di Maio, August 15
Italian prime minister Giuseppe Conte attends a meeting with Five Star Movement leader Luigi Di Maio, August 15 (Governo Italiano)

Italy’s ruling Five Star Movement and League have shelved proposals for a universal basic income and flat tax, La Stampa reports.

Implementing either policy, let alone both, would have blown a hole in Italy’s public finances and broken the EU’s 3-percent deficit ceiling. Read more

Far-Right League Gains Most from Governing in Italy

Matteo Salvini, the leader of Italy's Northern League, gives a speech in the European Parliament in Strasbourg, April 29, 2015
Matteo Salvini, the leader of Italy’s Northern League, gives a speech in the European Parliament in Strasbourg, April 29, 2015 (European Parliament)

Italy’s far-right League is benefiting the most from the government deal it struck with the populist Five Star Movement earlier this month.

  • In municipal elections on Sunday, the League captured the former left-wing strongholds of Massa, Pisa and Siena in the region of Tuscany.
  • Nationally, the League is tied with the Five Star Movement in the polls. Both get 27-29 percent support. In the last election, the Five Stars got 33 percent support against 17 percent for the League. Read more

Five Star, League Reach Deal to Form Government in Italy After All

Luigi Di Maio, the leader of Italy's Five Star Movement, answers questions from reporters in Rome, April 12
Luigi Di Maio, the leader of Italy’s Five Star Movement, answers questions from reporters in Rome, April 12 (Presidenza della Repubblica)

The leaders of Italy’s Five Star Movement and League have reached a deal to stave off early elections.

Luigi Di Maio and Matteo Salvini still want Giuseppe Conte, an academic, as prime minister. But they are willing to relent on the selection of finance minister.

Paolo Savona, whose nomination sparked a constitutional crisis, would still join the cabinet, but as European affairs — not finance — minister. That post would go to Giovanni Tria, an economics lecturer. Read more

Italy Government Deal: What’s In It and What’s Next

The facade of the Palazzo Montecitorio, the seat of the Italian parliament, in Rome, October 23, 2010
The facade of the Palazzo Montecitorio, the seat of the Italian parliament, in Rome, October 23, 2010 (Stefano Maffei)

Italy’s populist Five Star Movement and (formerly Northern) League have finalized a coalition agreement.

Among their policies are:

  • Reducing personal and business taxes to two rates: 15 and 20 percent.
  • A €780 monthly basic income for poor families.
  • Repealing 2011 pension reforms that raised the retirement age and made the system financially sustainable.
  • Withdrawal of EU sanctions on Moscow.
  • Speeding up the deportation of around 500,000 immigrants.

The final version of the text does not call for a pathway for countries to leave the euro, nor does it call on the European Central Bank to cancel €250 billion in Italian debt. These proposals had been in leaked drafts.

However, the planned fiscal measures will almost certainly cause Italy to break the EU’s 3-percent deficit ceiling. Read more

Time to Start Worrying: Populists May Form Government in Italy

Luigi Di Maio, the leader of Italy's Five Star Movement, answers questions from reporters in Rome, April 12
Luigi Di Maio, the leader of Italy’s Five Star Movement, answers questions from reporters in Rome, April 12 (Presidenza della Repubblica)

Italy’s Five Star Movement and (formerly Northern) League may form a government after all.

President Sergio Mattarella has given the two parties until Sunday to hash out a deal.

Time to start worrying. Read more

Nobody Is Happy in Germany, League Calls for Italian Euro Exit

German chancellor Angela Merkel delivers a news conference in Berlin, March 24, 2015
German chancellor Angela Merkel delivers a news conference in Berlin, March 24, 2015 (Bundesregierung)

Nobody in Germany is happy with the deal Angela Merkel struck with the Social Democrats this week.

Politico reports that conservatives are upset she gave the Finance Ministry to the left. The party’s youth wing is openly calling for Merkel’s replacement.

The Financial Times reports that Martin Schulz is testing his Social Democratic Party’s (SPD) unity by joining the new government as foreign minister.

Tilman Pradt argued here the other day that Schulz has wasted away his credibility by reneging on his promise never to serve under Merkel. “Given the fate of its sister parties in Europe,” Pradt wrote, “the SPD should have been aware of the dangers of putting personal ambitions over party politics.” Read more

Italy’s Salvini Commits to Right-Wing Pact, Asks Same of Berlusconi

Matteo Salvini, the leader of Italy's Northern League, gives a speech in the European Parliament in Strasbourg, March 15
Matteo Salvini, the leader of Italy’s Northern League, gives a speech in the European Parliament in Strasbourg, March 15 (European Parliament)

Matteo Salvini, the leader of Italy’s anti-immigrant Northern League, has ruled out reneging on a right-wing pact and asked Silvio Berlusconi, the leader of the mainstream conservatives, to do the same.

Both parties get around 15 percent support in recent surveys. In combination with smaller right-wing parties, they might just reach the 40 percent needed to form a government.

If they fall short, Salvini could theoretically team up with the anti-establishment Five Star Movement, which is polling at 26-28 percent.

Salvini and the Five Stars share views on Europe and political reform, but they come at it from opposite ends of the political spectrum.

Both have ruled out an alliance. Read more