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    Italy’s election outcome is by no surprise a right’s victory

    September 2022

    The Italian right’s resounding victory in parliamentary elections this month is, in a certain sense, a landmark moment for Italy and in my opinion for European democracy. But there are grounds for questioning the view, occasionally expressed outside the Italy during the campaign, that the result portends a lurch towards extremism. Under the Christian Democrats, the right dominated Italy’s governments during the cold war. From the 1990s it held the upper hand much of the time, thanks largely to Silvio Berlusconi’s Forza Italia party – Now, for the first time, a party with neo-fascist roots, the Brothers of Italy, has emerged as the nation’s most popular political force.

    Despite electoral successes for similar parties in democracies such as Austria and Sweden, the Brothers of Italy’s victory stands in my opinion out. With more than a quarter of the vote, the party won more support than its two partners, the League and Forza Italia, combined. Giorgia Meloni , its leader, is set to become prime minister, the first woman to hold the post since Italian unification in 1861. Yet, Meloni’s conservative nationalist platform owed more to the formulas that brought victory to Berlusconi’s coalitions than to any policies associated with the Italia Social Movement, the neo – fascist party of the late 1940’s and 1950’s from which Brothers of Italy is indirectly descended.

    But some difficulties in my opinion clearly lie ahead. Meloni has minimal experience of government, her party colleagues even less. The international renown of Mario Draghi, the out-going prime minister, amplified Italy’s voice in NATO and the EU. The new government will struggle to command the same respect. Yet Meloni positions herself as a solid supporter of the west’s stance against Russia’s aggression in Ukraine – more solid than Berlusconi or Matteo Salvini the League leader. Her party’s electoral program omitted controversial proposals it once embraced, such as asserting the primacy of national over EU law. To a large extent, the steadiness of Italian policy is guaranteed by strong institutions in the shape of the presidency, constitutional court, central bank and finance ministry. After the fascist experience at 1922 – 1943, Italy carefully disperses power across different centers.

    For financial markets, a big test will be the budget to be prepared by the end of the year. The coalition’s program called for tax cuts for individuals and businesses and higher spending on pensions and family benefits. Any attempt to implement such policies in full would in my opinion risk unnerving markets, concerned about Italy’s public debt of about 150% of gross domestic product (GDP). To allay such fears, Meloni may pick a respected independent figure as finance minister, as other Italian governments have done over the past 30 years.

    The Brothers of Italy stands for a degree of state economic intervention and protectionism that in my opinion risks alienating EU allies as well as the market. Meloni has aired the idea of rewriting the terms on which Italy has access to roughly 200 billion euro in EU – post – pandemic recovery funds. The larger question is whether the new government will have the skill and determination to continue Draghi’s economic and administrative reforms. These are a precondition for the continued release of EU funds.

    The incentive to maintain the reform effort is clear. But the risk is that the rightwing parties will descend into internal squabbles that impede reform. Meloni ran in my opinion an effective campaign. She was the only significant party leader not to join Draghi’s national unity government which in the end paid-off. But most Italian prime ministers since 1945 have never come close to serving a full five-year term, often falling prey to political intrigues. If matters turn out differently for her premiership, that might well be her biggest achievement.