Steve Bannon came to Italy and was greeted with a full-page interview this Sunday (3 June) in the center-left daily newspaper, La Repubblica. The journalist, Antonello Guerrera, seemed determined to find Bannon’s influence behind the unlikely union of Matteo Salvini’s Lega and Luigi Di Maio’s Five Star Movement (M5S). Bannon would have none of it. Although he admitted to having spoken with both gentlemen and having had prior contact with the M5S, he insisted that the two groups came together because sharing the government between them was ‘the logical conclusion’. The two parties’ leaders were ‘heroes’ for having ‘overcome the concepts of left and right’. That was the only way to meet the demands of an electorate, the majority of which voted ‘against the establishment’. ‘Italians should be proud.’ Now Rome is ‘the center of world politics’. The question now is whether the lessons from Italy’s experience are at all in line with what Bannon expects.
Yesterday I had the opportunity to have an exchange of emails with one of Italy’s leading financial journalists. This is part of a longer conversation we have been having over the past few years about the state of European financial markets and the role of Italy within them. The difference this time is that he published the exchange in gli Stati Generali, which is a project created to allow journalists to share stories or rely on formats that might not otherwise find their way into traditional media outlets. Knowing the journalist, the Italian version of our exchange is much more articulate than the English-language original I am reproducing here. The questions are in bold; my responses are in regular text.
Donald Trump is torn between two ambitions. One is to challenge the conventions that have underpinned U.S. foreign policy by replacing a commitment to global leadership with a determination to put America first. The other is to undo the legacy of Barack Obama. Neither ambition is easy to accomplish; taken together, the two ambitions constitute an enormous task. Sometimes they overlap. Sometimes they point in different directions. And sometimes they interact in a dizzying manner. Trump’s policy toward Asia is of the dizzying sort. Where Barack Obama pivoted to Asia from the Middle in a manner that both confirmed and defied U.S. foreign policy convention, Trump seems to twirl around Asia in an accelerating pirouette.
The voting in Catalonia was a trap for Spain’s political leadership in Madrid. They were going to be criticized if they ignored the vote and also if they tried to stop it. Moreover, shunting responsibility for dealing with the crisis on the courts and the police as institutions was no way out. Ultimately, institutions are about people and not just words on a piece of paper. The voters in Catalonia know that. Now the Spanish government will be held to account. Political leaders everywhere should pay attention.
On 21 August, I was invited to talk about the importance of ‘walls’ in a European context at an annual socio-cultural-political event called ‘The Meeting’ in Rimini. I sketched these notes as an aide for the interpreters who were supposed to render my unique version of the English language into fluent Italian. My host, Paolo Magri, insisted that I speak in Italian instead. What followed was probably more authentic as a set of off-the-cuff remarks using my one hundred and fifty mangled Italian vocabulary words, but it may not have delivered the full message. My central argument is that we should be wary of identity-based political mobilization. Any politician who wants to mobilize ‘us’ against ‘them’ is not your friend. That is as true in the United States as it is in Europe. Alas, Europe’s history with that kind of politics is a tragic one. Let’s hope we don’t have to experience it again.
To understand what impact the Trump Administration will have on European economic performance you have to start by re-examining the lessons of the past. Almost 50 years ago, Richard Cooper published a ground-breaking book in the United States called: The Economics of Interdependence. He conceived this book during the early 1960s while he was working as an economic policymaker in the Kennedy and Johnson Administrations, and he developed the argument as part of a high-level study group within the Council on Foreign Relations. These details are important because the message Cooper had to communicate was controversial, particularly coming from a member of the foreign policy establishment. No country, he argued, not even the United States, can ignore how other countries react to their economic policies. The problem is not good diplomacy (or good manners). It is structural. If policymakers ignore how other countries react to what they do, then they will never achieve their objectives – because the reactions of others can do much to offset any benefits a discrete policy action may deliver. Indeed, a country will be worse off going it alone than working with others. Compromise and cooperation are always better than having countries set their economic policies at cross-purposes.
As candidate, Donald Trump made a number of comments about the utility of the North Atlantic Alliance and about the virtues of European integration that left many in the establishment scratching their heads. When he was elected President of the United States, Trump did very little to soften his tone. On the contrary, the Trump White House floated the names of potential ambassadorial appointments who talked about the transatlantic relationship and the European Union in even more disparaging tones. Of course, this could all be marked down as campaign bluster and the hiccups that come with any transition into office. Other more seasoned politicians and diplomats have challenged Europe to do more for NATO and many have expressed exasperation with the transatlantic partnership. Former Defense Secretary Robert Gates and Assistant Secretary of State for European Affairs Victoria Nuland are two obvious examples, but the list is a long one. Nevertheless, the positions taken by Trump with respect to Europe both as candidate and as President are unusual enough to warrant putting them into context.
The upsurge of populism in the United States and Europe has us asking the wrong questions. The issue that should concern us is not what populists have in common. The similarities between Donald Trump and Marine Le Pen or Nigel Farage are unimportant. We also should stop wondering why voters on both sides of the Atlantic are so easily beguiled by political messages that combine rejection of the ‘establishment’ with some kind of appeal to identity politics. There has never been a shortage of voices calling for the overthrow of the elite or disgruntled voters willing to follow them and any slogan that promises that a history of victimhood can be replaced wth a future of privilege is always going to be attractive. Such mobilization against ‘the system’ is a hardy perennial of democratic politics.
The inauguration of Donald Trump as 45th President of the United States represents the triumph of populism over the world’s greatest democracy. It also sets the stage for populists to make further gains across Europe. Trump’s affection for Nigel Farage is plain to see. His affinity for (and his attraction to) populists of other shades is easy to find as well. The challenge is to sort out what this means for the European project. Populists tend to stake out Euroskeptical positions, and Donald Trump has made no secret of his indifference for the European Union, but it is hard to say just how populists can have a lasting impact unless they somehow manage to seize control over government.
The political landscape of Europe is changing rapidly and in ways that are hard to interpret. The recent Italian referendum is a good illustration. Matteo Renzi inherited an agenda to reform the Italian constitution when he became prime minister. He negotiated an agreement with the centre-right on the precise details of the package. He shepherded the agreement through two majority votes in each of Italy’s two chambers of parliament. He then brought the agreement to a popular vote as per constitutional requirement and with an electorate broadly disenchanted with politics and therefore favourable to reform. Nevertheless, virtually every party outside the government opposed the reform package and Renzi lost the referendum vote by a spread of twenty percentage points. Now Renzi is out of office. Italy is without a viable electoral system because of changes made in anticipation of the (failed) constitutional reforms. And it is unclear whether the new government headed by Paolo Gentiloni has sufficient support in the Senate to pass a new electoral law. Most Italians did not want Renzi’s constitutional reforms and yet they are not happy with the status quo either. Disillusionment with politics has grown as a result.