Giorgia Meloni, who has moderated her speech about breaking with the European Union, nevertheless clarified that if she wins “she will defend national interests” against the directives from Brussels, just as “the others do.” “The party is over,” she launched at an act in Milan.
“I don’t know a sovereigntist who isn’t anti-European. So what they say today doesn’t matter,” assured the vice president of the European Commission (executive body of the EU)Frans Timmermans, in an interview with the newspaper La Repubblica.
Favorite to become Italy’s next prime minister, the leader of Fratelli d’Italia (Brothers of Italy) has defended for years the idea of a “confederal Europe”that respects “the sovereignty of the Member States” and lets them decide on the policy that directly affects their citizens.
Post-Covid recovery at stake
With this criterion, he wants to renegotiate the post covid recovery planfinanced with almost 200,000 million euros (almost the same figure in dollars) by the European Union, so as to take into account the high cost of energy after the war in Ukraine.
However, the disbursement of this gigantic fund depends on the fulfillment of a series of reforms in Italy, whose implementation was scrupulously respected by the outgoing government of mario draghi and that they seem committed to the eventual victory of the far-right coalition.
“We could find ourselves with a serious conflict of ideas in Italy, which is the country that has benefited most from the recovery plan and from the EU,” he fears. Nicholas Noble, from the firm Oxford Economics. “There are many risks. Everything will depend on which Meloni will lead the government, whether the one that attacks Europe or the moderate one, which could maintain the current budgetary policy,” he explained to AFP.
The concerns about slowdown in the implementation of reforms and for a lack of control of public debt after Sunday’s elections have led the rating agencies Standard & Poor’s Y Moody’s to lower the indices linked to the solvency of the country.
Italy is crumbling under a debt of more than 2.7 billion euros, around 150% of the Gross Domestic Product (GDP)the highest in the euro zone behind that of Greece. That is why the right-wing coalition calls for a “review of the rules of Stability Pact“, suspended due to the health crisis, which set a ceiling of 3% of GDP for the deficit and 60% for the debt.
Although it is legitimate to modify some criteria considered obsolete, “it would be politically suicidal to make fun of the existing rules,” he maintains. Peter Bofinger, professor of economics at the University of Würzburg. “In the event that Italy deviates from the European consensus” and does not respect a minimum of budgetary discipline, “not even the European Central Bank could help her“, he stressed to AFP.
Italy’s public accounts, in the crosshairs
The electoral promises of the far-right coalition formed by Giorgia Meloni’s Brothers of Italy, League of the xenophobe Matteo Salvini and the conservatives forza italy of Silvio Berlusconicould have a harmful effect on public accounts.
“His program is very undefined and does not explain how to finance the measures,” says Nobile. If they were applied the public deficit would exceed 6% of GDP over the next five years“bringing high public debt to unsustainable levels,” according to Oxford Economics.
The most emblematic measure, a single tax, of 15% for the League and 23% for Forza Italia, could cost between 20,000 and 58,000 million euros, according to the Italian Public Accounts Observatory.
Added to this are other tax cuts and “fiscal peace” measures (amnesties) as well as the increase in the minimum pension.
Investors fear that such a populist government will end up like that of Silvio Berlusconi, who had to resign in 2011, pressured by the markets and by the rise in the cost of debt.
Source: Ambito
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