Catching Up with Italian Politics

The fast pace of change in Italian politics has left many observers outside the country struggling to catch up.  This collection offers a quick overview in bullet points with links to recent articles I have written in case you have interest in learning more.  I am going to list the material in reverse chronological order.  Most people want to know what is happening and then figure out why.  If you are one of those people who works the other way around, I advise you to follow the links from the bottom up.

The new Italian government has just been sworn in.  They have a pretty sizeable majority in both houses, which means they should be able to make some headway in passing legislation.  The problem they face is how to set priorities.  That problem will become particularly acute as they have to agree on a budget next autumn.  The post explains why the two parties that make up the government might fall apart.  You can find the original manuscript on my blog and the edited version on the Survival editors’ website here.

The most important figure at the moment is the leader of the right-wing Lega party, Matteo Salvini.  Salvini was the one who pulled the plug the first time the Lega and the Five Star Movement (M5S) tried to form a government toward the end of May.  Salvini is also the one whose agreement was critical for the successful government formation this time around.  I don’t want to overstate his importance.  He is the person of the moment.  That moment may not last.  I explain why in this piece that was published on the Foreign Affairs website.

Of course, it would be an easy thing for international observers to try and downplay or ignore the new coalition government as an aberration in European politics.  The problem is that Italy is such an important member of the European Union.  Moreover, I don’t mean member as in ‘object’, like a disaster in Italy would be a disaster for Europe.  I mean member as in ‘participant’.  Italy will play an important role in the negotiation of a number of European policies and the new Italian government has strong views about how Europe is put together.

Critically, those views do not emerge from the ether.  If you look at the evolution of Italian attitudes toward European macroeconomic governance, for example, you will find a lot more continuity than change in the Italian position.  The new government may be more extreme and less diplomatic, but it is touching on issues that previous Italian governments have also found important.  This book chapter for the Swedish Institute for European Policy Studies explains what I mean.  I am very grateful to the editor, Jonas Eriksson, for letting me revise the chapter right up until the last minute.  You will find excellent chapters on Germany, France, and the Netherlands in that volume as well.

When Salvini pulled the plug the first time the M5S and the Lega tried to form a government, his plan was to go to new elections.  His party’s numbers were rising in the polls and it seemed like a good opportunity to strengthen his presence in parliament.  The markets were less certain.  Moreover, it is likely that Salvini underestimated their impact.  When the President of the Republic, Sergio Mattarella, tried to appoint an interim technocratic government, the markets reacted strongly.  This piece for Politico explains why that was always going to be a problem and what it means for Italy’s future.

This odd thing about the market reaction to the initial failure of the M5S-Lega coalition is that the interim government Mattarella seemed to prefer was much less radical than the governing agreement negotiated between the M5S and Lega in the first place.  That agreement is hard to reconcile on a number of different levels, both national and European.  This piece for the Foreign Affairs website gives an overview of the government program and the many points of tension it creates.  Although I try to tell the story from an Italian perspective, my real concern is what this means for the European Union.

The problem for the European Union is that it cannot ignore Italy and save the euro at the same time.  There is a fundamental need for all parts of the EU to cooperate if the euro area is to remain stable.  This is a point I have been making for a while.  I have been stressing it more urgently after the Italian elections last March.  This piece for Eastwest magazine is a good illustration.  The original manuscript is available from my personal blog; the edited piece can be found here.

The urgency of dealing seriously with Italy has a lot to do with what we learned as a result of the March elections.  Like many Italy-observers, I tried to sort out what those elections meant repeatedly after the results were made known.  There are no hard answers but there is good speculation and interpretation.  Here I would welcome any comments.  These elections will be studied for a long time to come and we can only learn more through dialog.  I have two posts that may be useful to start a conversation.  One was a question-and-answer exchange (translated in Italian) with a leading Italian financial journalist that he published on the website for gli Stati Generali and also allowed me to reproduce in English on my blog.  The other is a piece I did for the ‘Official Monetary and Financial Institutions Forum’ which you can find on their blog and also on mine.

Even before Italy’s elections, there were reasons to be concerned about how the situation in Europe is developing.  This is true partly because of the nature of the debate about European macroeconomic governance and partly because of the more general phenomenon of ‘populism’.  I don’t want to pull the spotlight too far away from the Italian case here.  I just want to highlight that this is all part of a wider conversation.

That conversation is still ongoing.  I hope this collection provides both some useful background and sheds some light on the Italian case as an important illustration of the forces at work.