New coalition in Italy: Challenge for Ukraine and Europe

Author : Georgiy Kuhaleyshvili

Source : 112 Ukraine

After long negotiations in the Italian Parliament, an alliance of populist "Five Star Movement" party of Luigi Di Maio and the far-right "Northern League" party Matteo Salvini is emerging
09:20, 21 May 2018

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Luigi Di Maio and Matteo Salvini

After a month and a half of fruitless coalition negotiations in the Italian Parliament, an alliance of populist "Five Star Movement" party of Luigi Di Maio and the far-right "Northern League" party Matteo Salvini is emerging. The negotiation process has not been completed yet, however, both politicians have come to a mutual understanding on key state issues. The Italian newspaper Corriere della Sera has got some draft version of the coalition agreement, which spelled out a vision of the future of relations with the EU, NATO, the United States, Russia, the debt settlement and migration issues. Salvini and Di Maio alternately held talks with Italian President Sergio Matarella on the future coalition.

They have to agree on the candidacy of the Prime Minister and the composition of the new government. Salvini and Di Maio refused to claim a premiership and decided to find a compromise candidate, who would suit all parties. Election winners might apply for portfolios of the Minister of Foreign Affairs or Internal Affairs. Earlier, Matarella allowed the possibility of holding early elections, as none of the political parties could occupy the majority of seats in the parliament after the March elections. If the "Five Star Movement" and the "Northern League" form a coalition, they will be able to control most seats in the Chamber of Deputies and the Senate. A similar situation in the Italian parliament might lead to ambiguous consequences for the European Union and Ukraine.

Related: Elections in Italy: Political puzzle for Ukraine and the European Union

Eurosceptics and populists in power are a danger to the EU

Prior to the parliamentary elections, the "Northern League" and the "Five Star Movement" party have created an image of Eurosceptics. "Northern League" did allow the possibility of secession of the northern regions from Italy and the creation of a new state of Padania. Since the whole of Italy does not consist of their electorate only, the parties have had to make their political programs more pragmatic, oriented to broad sections of the population, focused on resolving social and economic problems. The issues on holding a referendum on withdrawal from the eurozone, withdrawal from NATO no longer stand on the agenda of the winners of the parliamentary elections. But Salvini and Di Maio intend to concentrate on the revision of relations with the EU and no longer comply with the rules of the game of Brussels. The draft version of the coalition agreement revises the fundamental EU Treaty with regard to the single monetary policy, the EU budget, a joint emergency response, control over tax policies of the Member States, and the possibility of sanctions.

Member of the “Northern League” Claudio Borghi is convinced that the European Union, whose budget receives billions of euros go annually, should realize that the interests of the Italians are a priority for the government. Di Maio said that it was necessary to review all the controversial points of the European budget. The new government can reduce allocations to the EU budget. The share of Italy's contributions to the European budget is 12.5%. The country takes the fourth place in terms of allocations to the European Union, and Rome is concerned with this fact.

Related: Berlusconi can run in elections 2019 in Italy

“Northern League” and "Five Star Movement" plan to introduce a single 15% tax for citizens of medium income and 20% for those Italians who earn more than 80 thousand euros per year, reduce retirement age. "Five Star Movement" was going to allocate 17 billion euros for new benefits for the poor. Such approaches of Salvini and Di Maio in socio-economic policy cause concern of the European Union. Vice-President for the Euro and Social Dialogue Valdis Dombrovskis warned Italian politicians that they should continue to gradually reduce the national debt and budget deficit. According to European standards, public debt should not exceed 60% of GDP. Last year, Italy's national debt grew from 131.5% to 131.8% of GDP. The Italian economy is growing quite slowly. According to the European Commission, this year Italy's GDP growth is projected at the same level as in 2017 (1.5%), and in 2019 it is possible to slow down to 1.2%. The foreign plans of the "Five Star Movement" and the "League of the North" do not fit into the expected austerity policy of the EU. Due to new tax rates, it is projected to reduce government revenues from fees from the population. Reducing the retirement age will not save 15 billion euros in the country's budget.

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Matteo Salvini and Berlusconi

Salvini and Di Maio do not share Brussels's approaches to migration policy and advocate a change in the Dublin regulations, which requires refugees to be granted political asylum in the first EU member state to which they arrived. Last year, 126.5 thousand people. applied for political asylum. Refugees from Asia and Africa continue to arrive in Italy. For the first quarter of 2018, 6.3 thousand refugees arrived in Italy by sea. European Commissioner Dimitris Avramopoulos expressed hope that the new government will adhere to the current course of migration policy. However, this is unlikely. Realizing that the European Commission's plan to resettle refugees from Italian territory to other European countries does not fully work, the new government will look for other options for solving the migration crisis. They might deport refugees to their native countries. Salvini promised to deport 100 thousand illegal migrants from Italy throughout the year.  

Related: Italy ignores Ukraine's prosecutor's office appeal on cooperation in Markiv case

Officials from Brussels have no sense to put pressure on Salvini or Di Maio, forcing them to follow the pan-European course. They are not ready to take unpopular measures this year, as they need to maintain the highest level of support among the population (before the forthcoming municipal elections in June). At first, Salvini and Di Maio might try to confront with the EU and demand to reform the bloc, the abolition of bureaucratic political structures, and changes in migration policy. A similar situation was in Greece, where the populist left-wing coalition SYRIZA of Alexis Tsipras won the parliamentary elections in 2015. And having failed to get the forgiveness of debts of their predecessors from the European Union and foreign creditors, the Greek left began to follow the austerity course. Meticulous Brussels will indefinitely bend its line and seek from the rebellious Rome not to depart from the existing rules of the game in the euro area.

Berlusconi’s pro-Russian intrigues

It might look strange why the "Five Star Movement" and the "Northern League" have unexpectedly agreed on the alliance. In early May, Salvini and Di Maio discussed the possibility of holding early elections on the first Sunday of July. They believe that early elections would allow their electorate to be consolidated. "Five Star Movement" failed to agree on a coalition with the Democratic Party and with the right-wing parties Brothers of Italy of Giorgia Meloni, former minister for youth affairs (Berlusconi’s government), Us with Italy of Maurizio Lupi and Forward, Italy of Silvio Berlusconi, who is associated with corruption scandals, political crisis, and numerous debt problems. However, Berlusconi does not object that Salvini might independently negotiate on a coalition with Di Maio, who opposes the participation of "Forward, Italy" party in the government. Berlusconi said that "Forward, Italy" and "Northern League" would remain partners as they control the local level of six Italian regions.

Related: UK, Italy among Europe's slowest-growing nations - forecast

In addition to the intra-Italian rhetoric, Berlusconi thus made a political gift to Russia and his old friend, President Putin. Few foreign politicians visited annexed Crimea to support Russia's position in its conflict with Ukraine. Berlusconi has visited the Crimea in 2015. Russian authorities needed that at least one party oriented toward rapprochement with the Russian Federation should come to power in Italy. Russia needs an influential lobbyist to abolish anti-Russian sanctions in the European Union. Italy is one of the most influential countries in Europe; this is the fourth European economy. Italy can unilaterally abolish anti-Russian sanctions and recognize Crimea as a Russian territory, creating a precedent for other European countries. Some politicians from the Czech Republic and Austria also criticize the sanctions.

Berlusconi and Salvini, who support the abolition of anti-Russian sanctions and justify the annexation of Crimea, might take the role of Kremlin's agent of the influence in the Italian parliament. "Five Star Movement" is less reactionary than the "Northern League". They confined themselves to stating the fact that anti-Russian sanctions are detrimental to the Italian economy. MP from the "Five Star Movement" Paola Karinelli is convinced that during the anti-Russian sanctions Italy has lost 7 billion euros, and the number of the lost workplaces can reach up to 200 thousand. Italian center-rightists and populists are opponents of the European Union.

The chances of "Northern League" in the early elections are ambiguous. Salvini has a more consolidated electorate among the inhabitants of the northern regions of Italy. However, as the March elections showed, the most Italians (32.6%) support the "Five Star Movement".  

Related: Pro-Kremlin journalists from Italy, Czech Republic and Russia denied entering Ukraine

Some provisions of the draft version of the coalition agreement between "Northern League" and "Five Star Movement" indicate that it is necessary to stop perceiving Russia as a threat, immediately cancel sanctions, and become a strategic partner in resolving crises in Syria, Libya, and Yemen. In fact, Salvini and Di Maio offer to lift sanctions from Russia and support its position in the Middle East. The winners of the Italian elections are acting in favor of Russian and Italian business. Over the past year, Italy's exports to Russia increased by 18.1%. This scenario is unfavorable for Ukraine. If Italy, under the power of populists, starts lobbying for the abolition of anti-Russian sanctions, this will negatively affect bilateral relations between our countries. Italy remains one of the largest markets for Ukrainian labor migrants: 400-800 thousand Ukrainians live or work there.

American Factor in Italian Elections

There is an opinion that the victory of "Five Star Movement" and the "Northern League" is similar to Trump’s victory in the US. The American president is an eccentric politician who adheres to protectionism in the economy, implements a strict migration policy and puts the US interests at the first place, not the obligations to international organizations. Mass media began to publish materials in which Berlusconi's or Salvini's approaches are compared with Trump's program "Make America Great Again". Even the pro-Russian rhetoric of Salvini is somewhat similar to Trump's statements during the pre-election program. In the working version of the coalition agreement, Salvini and Di Maio identified relations with the US and NATO as important foreign policy priorities.

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Matteo Salvini 

Related: Ukraine's ambassador in Italy condemns Lega Nord's intentions to lift sanctions off Russia

Steve Bannon, former chief strategist and senior adviser to Trump, observed the elections in Italy. He said that the victory of the populists is a signal for Rome and Brussels that people want change. Bannon compared the parliamentary elections in Italy with the presidential elections in the US. US Ambassador to Italy Lewis Eisenberg believes that the outcome of the Italian elections did not become a surprise for Trump and is a manifestation of the political processes, usual for modern Europe and America. The ambassador stresses that American business in Italy is interested in liberalizing the tax policy. Despite the fact that a significant number of Italians, especially youth, have some anti-American sentiments and criticism of NATO membership, the United States has traditionally been one of the priorities of Italy's foreign policy. Its role is played by the presence in America of a large and influential Italian diaspora. Since the Cold War, the United States has been treating Italy as the southern flank of NATO and guarantees its security. Italy has an American airbase in Aviano (since 1954). In 2017, the US took the third place ($ 45.8 billion) among Italy's partners in terms of exports. The state accounts for 10% of Italian exports of prepared food.

At the same time, the US is alarmed by the intention of Salvini and Di Maio to achieve the abolition of anti-Russian sanctions, which does not fit the political course of American Republicans that have increased pressure on Russia and imposed new restrictive measures against Russian officials, oligarchs, and enterprises. According to the U.S. Special Representative for Ukraine Kurt Volker, the unilateral abolition of restrictive measures by the Italian authorities will entail serious consequences.


Related: Unblighted prospects of Russia under Putin

The positive thing is that the US and the leading European countries are interested in keeping Italy in the orbit of its influence, and the country's foreign policy turn towards Russia is also not profitable for them, as well as for Ukraine. The US and the EU have economic levers of pressure on Italy. Germany, France, and the United States are among the three major trade and economic partners of the country. If the US and the EU temporarily prevent access to their markets, the existing negative consequences from anti-Russian sanctions and Russian counter-attacks will seem a tip of the iceberg. It is likely that Salvini and Di Maio are aware of the likelihood of such consequences. Therefore, their policy course can be more restrained and constructive than the current plans.

This column does not necessarily reflect the opinion of the editorial board or 112.International and its owners.

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