On the morning of Monday, the 28th of May, Italian President Mattarella vetoed the proposal from the anti-establishment populists Five Star Movement and the League to instate Paolo Savona as Finance Minister. By doing so, Mattarella has essentially triggered a new election that will take place in the autumn, as well as a constitutional crisis and cries for his impeachment.
Salvini and the League
Savona’s rejection acts as a political catalyst for certain Italian politicians. Mattarella has provided Salvini, the leader of the League, the opportunity to portray himself as a hero of the Italian people, and a victim of the bureaucratic hegemony of the EU. Mattarella’s rejection of a populist finance minister could lead to a far-right/right coalition in the autumn elections if Salvini and Berlusconi decide to unite their members of parliament, as they did in this election.
On the other hand, it is tough not to sympathise with the President. Paolo Savona has expressed extremist ideologies regarding the euro, including the possibility of a parallel currency. Mattarella tried to save Italy from a potential sell-off of Italian bonds, which could have led to an early disaster for the struggling Italian economy, albeit most economists argue that the uncertainty created from this veto could lead to even greater political and economic risks.
Italian Autumn Elections: A Referendum?
“The upcoming elections will not be political, but instead a real and true referendum… between who wants Italy to be a free country and who wants it to be servile and enslaved”
Matteo Salvini, League leader
Unlike the UK, a potential Italian exit from the EU represents an actual existential threat for the entire European Union, and as the Euro’s third-largest economy, Italy represents a far bigger threat to the single currency than Greece. Albeit shadowed in the past years by the Greek tragedy, Italy is close to a colossal economic crisis with Italian debt at 132% of GDP. A rate hike or mini-recession could trigger an enormous budget deficit in Italy.
In hindsight, Mattarella’s decision is understandable, but many Italians are going to feel that the President sold out the country to Brussels. The sentiment regarding this decision, similarly to events regarding then-Prime Minister Mario Monti in 2011, is that it is an EU-engineered plot. There are going to be protests and drama in Italy, with Italians having concerns about their savings as financial institutions put the country’s stock market and bonds under pressure, and the government’s borrowing costs increase.
A Berlin-dominated Europe?
To put it simply, Italians feel Brussels has too much power over their nation’s decision making. Perhaps it is Angela Merkel that should pay closer attention. Greek anti-German sentiment could have been ignored, but add Italy to the mix and there is an obvious pattern beginning to develop. What can the ‘Italian resistance’ learn from Greece? Most would argue that it is pointless to put up a fight when you may have already lost the war, others could argue that unlike Greece, Italy’s fall could genuinely create a crisis within the European Central Bank.
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