Europe between France, Germany, … and Italy

The United Kingdom’s exit from the European Union (EU) creates new opportunities for Europeans to unite around a common vision. The British played an important role in Europe both as a common market and as a political union. The challenge for the remaining member states will be to adapt to Great Britain’s absence. Last autumn, French President Emmanuel Macron launched an ambitious raft of proposals for reenergizing the European project. More recently, German Chancellor Angela Merkel forged a grand-coalition government with a different pro-European agenda. Macron’s vision is more centralist and involves more institutionalized solidarity; Merkel’s vision is more intergovernmental and places more emphasis on political responsibility at the national level. The success of either approach will depend upon how other European member states respond to the call for unity. The next Italian government will play a critical role.

The global context makes some kind of European unity imperative. Donald Trump’s administration in the United States has begun to articulate its ‘America First’ agenda through a mix of diplomatic strong-arming over European defense spending and unilateral actions on trade and exchange rates. Vladimir Putin’s administration in Russia remains involved in the Ukrainian conflict, it has become more assertive in the Middle East, and it has become more openly meddlesome in the democratic politics of other countries. Xi Jing Ping has consolidated his hold over China and become more assertive both in the completion of his Belt and Road initiative and in securing the South China Sea. Meanwhile, conflict continues to roil the Middle East; Africa continues to wrestle with the challenges of development, democratization, and demographic change; and Latin America remains relatively isolated from the rest of the world. By implication, if Europeans do not promote their own vital interests, no one else in the world is likely to do so.

Unfortunately, for the rest of Europe, however, the Italian situation is ambivalent. On the one hand, Italy is better positioned now than ever before to assume a leadership role in Europe. On the other hand, many Italians remain disconnected from the European project and some would rather see the Italian government focus its attention at home. Hence, while there is a chance that Italy could help to strengthen a vision of Europe that includes elements from both French and German proposals, there is also the threat that Italy will withdraw its support from the European endeavor at a crucial point in its renewal.

Italy’s leadership potential stems from a confluence of two factors. The first and more important is that Italy no longer requires a European ‘external constraint’ or ‘vincolo esterno’. There was a time in the 1980s and 1990s when it was useful for Italian politicians to cast ‘Europe’ as some kind of objective to achieve necessary reforms at home. That time started with the struggle to bring down Italian inflation and culminated with the consolidation of Italian public finances and the first major reform of the Italian welfare state. After Italy joined the euro, however, the Italian government’s success or failure in the reform and maintenance of its domestic institutions was more obviously a matter of domestic politics than any external constraint — and Italy became more of a normal member state in that sense. Since 2011, moreover, successive Italian governments have demonstrated that Italy can be reformed. The key to success, these governments argued, is not found in conditions set abroad but in political ‘ownership’ at home. European leaders both in key institutions and in other national governments have learned to respect Italy’s achievements in this respect.

Italian self-confidence in Europe is the major factor; the relative weakness of France and Germany and the political hole left by Britain’s absence also play a role. President Macron may have a decisive majority in the French National Assembly, but he cannot push the European agenda through force of will. Previous French Presidents have tried that route in a much smaller European Community and failed. Normally the threat of a British outcry would deter such French hubris. Now the opposition is more subtle. Nevertheless, recent efforts by Dutch Prime Minister Mark Rutte to organize the smaller member states in opposition to Macron’s reform agenda show the limits of the French President’s influence. More important, Macron also faces a complicated domestic agenda. So does Chancellor Merkel. In the German context, however, Merkel lacks Macron’s hold over parliament. She also faces deep divisions within her own coalition. That explains why the pre-coalition agreement seemed much more favorable to Macron’s European agenda than the current German government actually is. Merkel was willing to make concessions to the pro-European faction in the German Social Democratic Party (SPD) to win their assent to the agreement and yet she is not willing to alienate those voices arguing for greater national responsibility within her own Christian Democratic Union as an act of government policy. Merkel is fortunate that her new SPD Finance Minister, Olaf Scholz, has a similar perspective — even if Macron is sure to be disappointed.

Despite the opportunities for Italian leadership in Europe, however, many Italians feel increasingly disconnected. Eurobarometer public opinion polling done last autumn shows that large numbers of Italians lack support for the European project; large numbers of polling respondents also express their skepticism in the euro as a single currency. These poll findings do not suggest that Italians are ready to leave the EU or to abandon the euro. Such poll findings do not even reveal the extent to which Italians view ‘Europe’ as an important issue relative to other more domestic considerations. On the contrary, national polling done during the run-up to the March 2018 elections shows that most Italians see pensions, unemployment, and immigration as more important than anything overtly ‘European’. And therein lies the rub. To the extent to which Italian politicians can blame European institutions for unwanted pension reforms, excess unemployment, or uncontrolled immigration, they can succeed in making ‘Europe’ more important in a very negative sense. Indeed, a number of politicians working across the Italian political spectrum — particularly, but not exclusively, in the Lega — are trying hard to make that connection. If they succeed, they will not only make ‘Europe’ more salient in the eyes of the Italian electorate but they will also diminish Italy’s potential to play a constructive leadership role in Europe.

For their part, other European leaders are finding it difficult to be supportive. Some of this is a legacy of Italy’s past relationship with Europe. Although a number of policymakers in Germany and other Northern European countries are impressed with recent Italian reform efforts, they are also quick to revert to a memory of Italy as needing some kind of external constraint. The European institutions share such memories as well. Moreover, the uncertain Italian political situation only reinforces the tendency of well-meaning Europeans who are interested in supporting Italy to adopt a patronizing tone. Some of this mistrust is also a result of the promises made during the Italian electoral campaign. Italian politicians are hardly unique in committing to undo unpopular reforms or to spend funds for which no revenues are available. The problem is that Italian public finances are more fragile than in other countries and so the margins for error (and hence also for confidence) are more restricted. If Italian politicians do not want to face the condescension of their counterparts in European institutions or other member states, they will have to put forward more realistic policies and they will have to show how they can get the rest of the Italian electorate behind them.

Alas, it is far easier for all sides to revert to type. Other Europeans can look down on Italy and Italian politicians can try to draw support from the collective sense of isolation. If they choose this route, however, Italy’s new ruling class will have to realize that they are not only sacrificing Italian popular support for European integration and the prospects for Italian leadership in Europe alongside France and Germany. They may also be weakening the European Union at a time when it has never been more necessary for the promotion of Italian as well as European interests.

This piece was originally published as ‘The Union’s Third Leg’ in the May/June issue of Eastwest. For the edited version, go here.  The image is borrowed from the Eastwest website.