President: Jacques DELORS
ITALY, EUROPE AND THE EUROPEAN PRESIDENCY OF 2003
Roberto DI QUIRICO
Research and European Issues N°27
July 2003
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Roberto Di Quirico
Born in 1964, Roberto Di Quirico is holder of a History degree from the University of Pisa
and of a PhD in History from the European University Institute (Florence). He is also a Jean
Monet scholar at the Robert Schuman Centre of the European University Institute. He is
currently a researcher in the Department of History of the University of Pisa and has taught
Italian economic history at the University of Pisa and the history of monetary integration at
the University of Florence.
Author of numerous studies in Italian and English and of a book on the history of banks and
other Italian financial organisations under the fascist regime, he is currently working on the
influence of European integration on local administrations and on the consequences of
monetary integration on the construction of the European Union.
Notre Europe
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FOREWORD
I am especially grateful to Roberto Di Quirico for having accepted to analyse for us the
perspectives of the Italian Presidency of the European Union and their determining factors as
it is a particularly difficult task. As far as politics is concerned, whether national or European,
the Italian response is never easy to predict, and indeed this is one of its many charms. This is
also true of the subject we wish to treat here, the political orientations of its Presidency. It
becomes even more difficult given the attitude of the Italian authorities which combines an
unusual discretion over their intentions, an often puzzling style of international relations and a
cooler and more hesitant European commitment than in the past, on the surface at least.
Roberto Di Quirico explains that this new positioning and the difficulty in explaining it
derives from a tense internal situation where divisions are exacerbated, the political system
which followed the ‘First Republic’ is unstable and there is a fear of an economic, social and
moral ‘decline’ in the country. The European theme, which has always been at the centre of
the Italian debate, finds itself eclipsed by internal concerns and used in response to these
concerns. Even if experience has taught us that Italy generally copes with this type of
situation, without the anticipated dramatic consequences, the current scenario appears more
serious than usual. This explains why our author has found himself compelled to depart from
the usual academic neutrality and has provided us with a study which is more ‘committed’
than the others in this series have tended to be.
The legacy which each Presidency leaves for the history of European integration relates less
to its intentions and more to the constraints of its agenda. The second semester of 2003,
between enlargement, deepening and the planning of budgetary resources and policies, will be
particularly demanding for the Italian Presidency. This will be in some senses a hazardous
period, as the Union will have to resolve questions which are vital for its future, while it is
currently more divided than ever. In such a context, the role of the Presidency will be less that
of proposing initiatives than that of forging consensus. Among other advantages it possesses
which should aid in this task, Italy also holds the functions of the Presidency of the European
Council, the Presidency of the Commission and the Vice-Presidency of the Convention,
which is not too bad for a country supposedly on the verge of decline. It is up to Italy to add
up these potential strengths rather than using them as a further instrument of division. They
will be necessary to meet the strict deadlines that the calendar has laid down.
Jacques Delors
CONTENTS
INTRODUCTION 1
I - THE HISTORICAL DEVELOPMENT OF RELATIONS BETWEEN ITALY
AND THE EUROPEAN INSTITUTIONS 5
1. Italy as founder member, 1950-1973 6
2. Birth and consolidation of the post-war patronage system in Italy 9
3. Italy on the margins: 1973-1992 11
4. Resisting marginalisation : Italy and the adoption of the euro 15
II - THE INTERNAL DEBATE ON EUROPE 18
1. The position of government parties 19
2. the position of the opposition parties 23
3. Minor parties, movements and pressure groups 26
III – THE INTERNAL DETERMINING FACTORS FOR ITALY’S EUROPEAN
POLICY 28
1. The governement and the restrictions deriving from EU rules 28
2. Internal problems and Atlanticism 29
3. The stirrings of Italian federalism and the European Constitution 31
4. The problem of the economic and social decline of Italy and the consequences
for the country’s attitudes to Europe 33
IV – THE FUTURE OF ITALIAN PRESIDENCY 35
1. The Greco-Italian programme and crucial events during Italian Presidency 35
2. The aims of the Italian Presidency 38
3. Italian action during the Presidency : some hypotheses 39
V – CONCLUSIONS 42
BIBLIOGRAPHY 44
WEB SITES CONSULTED 47
STATISTICAL APPENDIX 48
1
INTRODUCTION
On July 1st
2003, Italy will assume the Presidency of the European Union, following
Greece. During its Presidency, Greece had to cope with a number of serious incidents
linked to the war in Iraq, which seriously damaged the cohesion of the Union. Member
States were split between those which supported and those which opposed the military
intervention in Iraq. Moreover, many of the accession countries clearly demonstrated
their pro-NATO and therefore pro-intervention stance, which placed them in opposition
with some of the current Member States which opposed the intervention.
An already difficult situation was further aggravated by the failure of key countries, such
as France and Germany, to stick to some parameters of the Stability Pact which binds the
euro-zone countries. This development, while apparently less dramatic than tensions over
the Middle Eastern conflict, is nonetheless likely to have dangerous repercussions on
stability within the European Union. This first breach of financial discipline risks
undermining the willingness of other countries to maintain their commitments, and to
encourage the adoption of less stringent budgetary policies by countries which have so far
succeeded in respecting the Stability Pact by adopting one-off measures which are
inadequate to the task of providing structural solutions to the internal economic problems.
Another aspect of concern is the process of drafting the European "Constitution", which
is a crucial step if the existing institutions of the Union are to be adapted to the new
circumstances arising from the forthcoming accession of new Member States from among
the former Communist countries. At present the Convention on the Future of Europe
responsible for drafting this Constitution is in danger of getting bogged down in
declarations of principle which are more appropriate for describing an ideal Europe than
for proposing an institutional structure capable of meeting the challenges of enlargement
and redefining the philosophy behind the European integration process. The hypothesis of
an international confederation, which would allow national states to seize back some of
the powers previous delegated to the European institutions, poses the question of the role
which the different Member States would adopt in the new European Union, and the kind
of relationships which would develop with the Franco-German axis which is now central,
and perhaps dominant vis-à-vis the other Members. Problems of this kind have already
arisen over the Iraq issue, and the Member States find themselves facing a growing
divergence between Franco-German foreign policy and an "Atlantic" or NATO policy.
The Greek Presidency found itself in an awkward position with regards to Italy, the
country which was to succeed it as the next President of the Union, with whom a joint
programme for 2003 had already been agreed. The Italian government was one of the
2
sponsors of the famous letter to the US President in which some Member States and
various applicant countries declared their support for the American policy on Iraq, to the
vexation of Member States opposing the policy, and particularly Greece, the current
holder of the Presidency, which saw itself pushed aside and marginalized from an
initiative in which it should have played a leading role. Italy has thus been very exposed
recently, assuming sometimes extreme positions which are inappropriate for a country
due to take up such an important role in the European Union as the Presidency. This has
certainly encouraged speculation as to the part which the forthcoming Italian Presidency
will play in areas as crucial as relations with the United States, internal cohesion and the
institutional reorganisation of the Union. Simultaneously, fears are starting to be
expressed in Italy that the six months' Italian Presidency could be a failure, fears which
are stoked by the obvious isolation of Prime Minister Berlusconi on some occasions, and
the clear limits which have emerged as to his ability to act internationally.
The Italian position and its recent European policy choices may perhaps be explained by
the historical development of relations between Italy and the European Union, and some
particular features of the existing government coalition in Italy. Italy was one of the
founder members of the original European institutions, but over time it has appeared
increasingly unable to keep pace with other Member States and the country has been
increasingly marginalized. This was dramatically demonstrated during the period from
1992 to 1998, when the ability of Italy to take part from the start in the final stages of
monetary union was in doubt, both in Italy and in the other Member States. The
remarkable effort by the Italian government during those years, supported – albeit in a
lukewarm fashion – by the opposition parties, enabled Italy to enter monetary union from
the outset, but it also played its part in strengthening the opposing political groups which
see the relationship with Europe differently. For one side of the divide, European
integration offered a way of forcing Italy to accept a modernisation process which would
have been difficult to impose solely on the basis of internal reasons; for the other, it
created highly restrictive constraints on national policy which hindered the reintroduction
of the system of patronage traditionally underlying the relationship between political
parties and the electorate. It is thus clear that the Italian attitude to Europe cannot be
divorced from the nature of the ruling coalition government, and the way in which the
parties in government regard the effect of the country's European commitments on their
margin for manoeuvre in national politics.
Nor could Italy and its government ignore the long-term development trends in the Union
and the consequences which this would have for Italy. The emerging impression of a
Europe centred on a close Franco-German partnership, in which the needs of French
international policy and the German economy take precedence over those of countries on
the margins of this "heart of Europe", prompted Italy to strengthen its links with other
Member States such as Spain and the United Kingdom, and especially with its traditional
3
ally, the United States, to ensure that it could continue to play a part in international
affairs. The manifest weakness of the process of consolidating and strengthening the
European political institutions might be another factor in encouraging Italy to adopt a
policy more focused on foreseeable short-term internal problems, for which it could not
rely on Union support to solve. Italy has already complained of the scant support from its
European partners in stemming the flow of illegal immigrants arriving in the country. In a
possible future scenario characterised by disputes between the European Union and the
United States, and with no reliable European defence system, Italy could find itself alone
with the problem of defending the central and eastern Mediterranean, and thus forced to
cope with huge and currently unavailable military expenditure.
Finally, there have been clear signs of economic and cultural decline in Italian society, as
well as a prevailing political culture diverging from the typical model in other Member
States. This is not a new experience for Italy, which underwent something similar during
the final years of the European Monetary System. Its roots lie in the difficulty of adapting
the economic system and political representation in Italy to European models, and in the
conditions arising from the acceptance of the constraints imposed by participation in the
economic and political integration process. This has provoked unappeased ambitions to
by-pass some of these constraints, particularly those relating to the budget, to enable
national political forces to seize back their traditional room for manoeuvre in the
economic field and in their relationships with the electoral base. These ambitions will
certainly be encouraged by the recently opened cracks in the Stability Pact, and it may
reasonably be supposed that the current Italian government will try to formalise such
opportunities to deviate from the constraints of the Stability Pact, or to make them more
flexible. At the same time, it is essential for Italy to exploit to the maximum the possible
advantages of economic integration to improve conditions in its own economy and to
regain lost ground in sectors such as research, where the signs of decline are now all too
evident.
There is thus an obvious internal lobby which brings much influence to bear on the
attitude of various sections of society and the Italian political world vis-à-vis the
European Union. Similarly, we may suppose that these internal priorities will also
influence the way in which the country acts on the European stage during the period of its
Presidency, encouraging or at least supporting more wholeheartedly those initiatives
which correspond to the aspirations and needs not just of the country but also of the
ruling coalition.
To shed light on the origins and basis of the current Italian position, we shall look back at
the history of Italy's attitude to Europe and the relationship between the internal situation
and the Italian position in Europe. We will then analyse the different positions adopted
towards Europe by the main government and opposition parties, some minor parties and
4
movements, and the main pressure groups. We shall also closely examine the topics
which now appear as the most important for the forthcoming European Presidency,
illustrating the ways in which the internal Italian situation may influence the attitude of
the Italian Presidency in these areas. Finally, we shall examine the Greco-Italian
programme, in an attempt to identify the areas in which the Italian Presidency's actions
may be more incisive or more problematic.
Written during the period from the eve of the attack on Iraq to the end of May 2003, this
paper cannot but reflect the uncertainties and the bitter internal and international
controversy of the time. Inter alia, the events preceding the outbreak of war and during
the period immediately after the end of hostilities have contributed to rendering both the
programme for the Italian Presidency, and the aims it had put forward, obsolete. All this
makes it very difficult to hazard any forecasts for the immediate future, and thus for the
possible developments during the Italian Presidency, though the underlying reasons
which are likely to inform the Italian action remain valid. These reasons will be explored
exhaustively in this paper.
5
I - THE HISTORICAL DEVELOPMENT OF RELATIONS BETWEEN ITALY
AND THE EUROPEAN INSTITUTIONS
One of the most obvious features of the relations between Italy and the European
institutions is the gradual marginalisation of the country during the course of European
integration. Until this process was resolved in proposals and diplomatic moves directed at
policies for integration, Italy and its political leaders were able to play a leading and
constructive role. However, when the constraints involved in participation in the
initiatives for European integration and coordination became more stringent, shifting
from declarations of support to ongoing policies, the limits of Italy's European
commitment and its political and economic structure became very clear. From 1970s, in a
period of deep economic crisis and while the European partners' initiatives were focused
on the creation of defensive institutions in the economic field, such as the monetary snake
and later the European Monetary System (EMS), Italy appeared increasing less fit to
“stay in Europe”, unable to sustain the efforts demanded by coordinated economic
policies of this kind or even to adapt its own internal structure to a more "European"
model, in the sense of a system more able to withstand the adoption of policies
coordinated at the European level and the sustained presence of the country in the new
institutions created to tackle the crisis. In other words, the Italy of the 1970s showed itself
incapable of "becoming European" and became increasingly marginalised, because of its
obvious inability to respect precise undertakings like those of the EMS, and the
consequent damage to its reputation in the eyes of its European partners.
In the period between the second half of the 1980s and 1992, attempts at internal reform
made it clear that the link with Europe was an essential element, both in restoring
international credibility and, in particular, for imposing internally the reforms which had
been obstructed by the crisis, now irreversible (though this had not yet been recognised),
in the Christian Democrat power system. The relationship between internal reform and
the link with Europe, described as an "external constraint" inasmuch as there was an
attempt to impose internal reforms while presenting them as an obligation deriving from
European commitments, was taken up again energetically in the mid-1990s, concurrently
with the efforts to meet the conditions for entry into the third phase of monetary union
and, in consequence, for "entering the euro". This catch-up policy vis-à-vis Europe
seemed to have run its course, or at least to have weakened significantly, with the
completion of monetary union.1
It greatly resembles other typically Italian stop-go
policies, particularly in the economic field, which tend to alternate very dynamic periods
1
V. Dyson, Kenneth – Featherstone, Kevin, The Road to Maastricht. Negotiating Economic and Monetary
Union, Oxford, Oxford University Press, 1999, pp. 452-533.
6
with long pauses to recover from the effort expended to achieve aims which habitually
end by being challenged during the pause following their achievement.
1 – Italy as founder member, 1950-73
The first stage of Italy's participation in the European integration process and the part
played by the country and its political leaders in supporting and encouraging the process
must be considered and analysed in its historical context, the "rescue of the nation-state"2
and the economic and political reconstruction of post-war Europe. Italy, like several other
European countries, had a desperate need to integrate into the European framework in
order to take part in a process of rebuilding and consolidation, both political and
economic, which it could never have achieved as a single State. In that period,
involvement in European initiatives such as the European Payments Union or the
European Coal and Steel Community entailed compliance with rules and agreements, but
strengthened the economic situation in Italy, which in turn made such compliance
possible. Furthermore, the internal political system in the youthful republic, though
destined to deteriorate rapidly because of the flaws inherited from earlier times, the
structural limitations of the economy and the political culture established over centuries
of history, was still sufficiently flexible for the requirements of membership of the first
European institutions.
The historic victory of De Gasperi's Christian Democrats in the 1948 elections, structural
under-employment due to a combination of a large population and a level of
industrialisation which failed to match it, the repressive tradition inherited from the
preceding regimes - particularly from Fascism - and finally the military presence and
influence of the United States on internal politics, all allowed the Italian government to
pursue an active policy of European integration. Indeed, once the difficult immediate
post-war period was past, when the Communist Party's actual aims were unclear, and
particularly in view of the balance of power internally, De Gasperi's Christian
Democratic-dominated governments were able to consolidate their power, countering the
parties on the left by suppressing street demonstrations, leading to some deaths among
working-class demonstrators, or by relying on the business classes who viewed structural
unemployment as a valuable tool for containing wage demands and imposing work-place
2
V. Alan, S. Milward, The European Rescue of the Nation State, London, Routledge, 2000
7
discipline,3
as well as a means of applying pressure to obtain favours and help from the
government through the so-called "employment blackmail"4
.
The stabilisation of society and the consolidation of a manufacturing structure based on
low wages,5
enabled Italy to enter the first stages of European economic integration as the
supplier of some industrial products and foodstuffs and also of labour, which was
abundant in Italy but scarce in countries such as Belgium and Germany and in certain key
economic sectors such as mining. Furthermore, the particular situation of Italy and the
opportunity to impose deflationary policies unpopular with the labouring classes
precisely because they were excluded from government through the marginalisation of
the parties which represented them made it possible to implement a process of financial
stabilisation through a deflationary policy, in contrast to what was happening in other
European countries. Italy was thus in a position to increase its monetary reserves and to
regain margins of manoeuvre and international credibility, in part due to the stability of
the lira. The conditions were thus set for active Italian participation in the economic and
political European integration process; and in these difficult times Italy was able to play a
constructive part.
At the same time, the need for economic reconstruction made European integration
something of a forced choice. In reality, the choice - suggested by some - between
opening up the economy to export trade, or maintain a strongly protected internal market
on which to focus for economic recovery simply did not exist. Only a collective solution,
at the European level, could satisfy the Italian economy's crucial needs, such as the
guaranteed access to moderately priced industrial scrap on which the Italian steel
production was based, or the mass emigration of labourers unable to find work at home
and whose presence constituted a potential source of internal political instability. Many of
the available opportunities for growth in national industry also consisted of entering
industrial sectors, such as light engineering, with internal European trade based on the
mutual exchange of manufactured goods. Finally, Italian agriculture could find
opportunities to expand the markets for its own produce mainly in internal European
trade. Just as some industrial products were welcomed in the rest of western Europe,
agricultural produce could be marketed because, particularly after the creation of the
3
On the repression of demonstrations, the deaths and arrests of workers and trade unionists, and the
dismissal policy adopted after 1948 see Camillo Daneo, La politica economica della ricostruzione 1945-
1949, Torino, Einaudi, 1975, pp. 282-92.
4
"Employment blackmail" had been a widespread practice in Italy since before WWI , and consisted of
threatening to close down plants and dismiss large numbers of workers unless entrepreneurs received
various kinds of State aid. This system allowed uncompetitive businesses to survive for long periods, and
was abandoned only on the introduction of European regulations on state aid.
5
For the "low-consumption equilibrium" and the importance of this strategy in Italian development, see
Franco Bonelli, “Il capitalismo italiano. Linee generali d’interpretazione”, in Storia d’Italia, Annali, vol. 1,
Dal feudalesimo al capitalismo, Torino, Einaudi, 1978, pp. 1195-1255.
8
European Payments Union, it was unnecessary to pay for such goods in dollars, as would
have been the case if industrial and agricultural products were imported outside
continental Europe.
On the other hand. other politically important reasons existed alongside the economic
motives. As one of the countries defeated in WWII, Italy had every reason to support a
policy of European integration which would lead to its own re-integration into the
European context. Furthermore, Italian foreign policy at that time was closely monitored
by the Americans, who were the main promoters of the first phase of European
integration, at least until the failure of the European Defence Community (EDC). So the
enthusiasm for Europe shown by Italy's political leaders in the years before the late 1960s
should come as no surprise; and nor should the important role of Italian diplomacy in the
negotiations which led to the Treaty of Rome and the creation of the European Economic
Community. Against this historical background, there was no conflict between Atlantic
loyalties and European commitments, nor were these commitments such as to prejudice
the consolidation in Italy of Christian Democrat power and an economic model under
strong State control and patronage which would become problematic at later stages in the
European integration process.
With the creation of the Common Market, and the failure of the federalist political
integration process, followed in the 1960s by the confrontation between De Gaulle's
France and the United States, the European integration process appeared to have come to
a halt, except in some very specific sectors such as agriculture, where the launch of the
Common Agricultural Policy (CAP) confirmed the protectionist approach already present
in outline in the creation of the European Common Market. Such developments were a
foreseeable result when the reasons which had induced the major European countries to
go along with US pressure for European integration ceased to apply. Now the nation
states were safe, growing internal prosperity had appeased the revolutionary threat of the
immediate post-war period, and the return to convertible currencies under the Bretton
Woods agreement guaranteed relatively stable conditions in the internal economic
system. At such a time there did not seem to be any need for "more Europe"; what there
was, was enough, and there were no reasons to surrender any more national sovereignty.
In Italy, the early 1960s saw an economic boom which ended around 1963-4, leading to a
crisis which required the injection of foreign capital. At the same time, Italy was
committed to pursuing a coordinated policy in foreign relations, including monetary
policy, where it seemed clear that the US position and the status of the dollar as the key
currency in the entire international payments system were weakening.6
In this area too,
Italian activism concealed the country's strong interest in maintaining a situation of
6
V. Charles A. Coombs, The Arena of International Finance, New York, John Wiley & Sons, 1967
9
relative stability, which was of great value to a country dependent on international
collaboration for the resources to create the internal stability which would otherwise have
been unachievable, as became evident when the 1970s crisis erupted, bringing
catastrophic repercussions in Italy.
2 – Birth and consolidation of the post-war patronage system in Italy.
During the years between the founding of the Republic of Italy and the crisis of the
1970s, the Italian socio-political structure and its particular economy gave rise to a
development model which was quite specific and unlike those which appeared in other
countries in the European Community. During and immediately after the war, the sole
credible mediator in Italy vis-à-vis the Americans appeared to be the Vatican, and, in
consequence, its associated political party which, having disappeared during the fascist
period, had been reformed after the war under the name Christian Democracy. This party
therefore became the political referent for the Americans in a State which, as has often
and rightly been pointed out, held only "limited sovereignty" in many fields. Further, the
electoral strength and popular support for the parties with a Marxist tradition (the Partito
Socialista Italiano or PSI and the Partito Comunista Italiano or PCI) and their
revolutionary stance which excluded them de facto from the democratic sphere made
Christian Democrat predominance inevitable. The Christian Democracy party thus came
to constitute the nucleus of Italian democracy, in the sense that it commanded the consent
of a large majority of voters who identified themselves with very general values such as
Catholicism and anti-communism, but who also had particular interests and demands to
mediate within the party and the emerging power system. In this way, Christian
Democracy offered itself mainly as a party of government which identified with no
ideology, social class or particular political project (like other Italian parties in the postwar
years) but which aimed to create approval by adapting itself to different local needs
and situations and drawing from this the electoral support necessary to control the
government and the management of the system of patronage on which the consensus
depended. The powerful State presence in the national economy was one of the
foundations of the patronage system created in Italy by the coalition governments led by
the Christian Democrats. This presence, a survivor from the fascist period,7
was used in
the Republic first as a tool for reconstruction and support for economic growth, and then
as the main means of attaining and maintaining the consensus, via policies for planned
(and sometime ephemeral) industrialisation in electorally significant regions where those
in power wanted to reward voters for their support with jobs and opportunities for social
and economic advancement.
7
The Institute for Industrial Reconstruction (IRI), the main State holding organisation for the control of
industrial shares, was established in 1933 to cope with the effects of the international crisis on Italy.
10
Italian structural unemployment, together with the traditional divide between the
industrialised North and the depressed South, meant that jobs and career prospects were
identified as the main currency for buying electoral support. This kind of policy, made
possible by the fact that the State controlled around one third of major industries, went
hand in hand with a similar policy of over-manning in the public administration, in this
case pursued impartially by both government and opposition parties where they happened
to hold local authority control. Finally, there developed a curious Italian-style welfare
state system, which aimed at alleviating economic disadvantage and structural
unemployment through mechanisms which maintained the logic of privilege linked to
electoral support and party affiliation. That was how many of the long-term unemployed
in Italy claimed to be disabled and claimed a State pension granted not because of their
unemployed status and irrespective of their political affiliation (as ought to be the case)
but on the basis of an overtly illegal allocation procedure. This process began rather
gradually, and then appeared more openly with the rise in unemployment due to the
international crisis. In short, the creation of the Christian Democrat consensus system
ended by seriously compromising the efficiency of the State and publicly owned industry,
undermining the financial basis of the first and the competitiveness of the second. In
addition to policies of this kind, there was a benign neglect of the fight against tax
evasion which enabled government coalitions to obtain the support of traders and
businessmen who benefited, at least in the medium term, from a taxation system which
weighed solely on employees - through deductions at source - and consumers through
taxes on consumption. In the long term such policies proved counter-productive even for
the initial beneficiaries. Heavy taxation on the wages of employees were counteredbalanced
until the end of the 1960s by low wage levels. However, when the trade union
struggle, erupting violently in 1968-9 and worsening in the 1970s partly in response to
growing inflation, achieved a widespread and continuous increase in wages, the heavy tax
deductions on employees' income began to have a damaging impact on the
competitiveness of Italian goods.
In the Italian government the Christian Democrats were allied with some minor parties
such as the Partito Socialista Democratico Italiano, the liberals and republicans. From
1963, the Christian Democrats were also supported by the Italian Socialist Party, who had
broken with the communists but were gradually weakening, and who had little option but
to integrate into the Christian Democrat power system and, in time, reproduce its
mechanisms for gaining consensus. The entry of the socialists in the government
accentuated State control of the economy, and thus also increased the scope for
patronage-based negotiation. Further, the pervasive nature of the State's presence in the
Italian economic system was highlighted by the almost complete control of some crucial
sectors, such as the banking system and the electricity sector, which was nationalised
11
when the socialists entered government.8
The system of relationships developed between
the State and major private groups placed the State and its financial support at the heart of
the Italian economic system and directed its choices, encouraging large groups in the
internal market through subsidies and incentives and by development strategies and
economic policies which fostered the activities of major private groups, which were vital
to ensuring employment and well aware of the power they derived from "employment
blackmail".9
A clear demonstration of the close relationship between the interests of
major industries and national policies came with the gradual abandonment, during the
1960s, of the public transport policy in favour of private transport which increased the
market for the Italian motor industry. Unfortunately the cars ran on petrol, and Italy was
wholly dependent on oil imports which had to be paid for in valuable currency. This fact,
which was originally not considered to be a serious problem, had a dramatic impact after
1973.
3 – Italy on the margins, 1973-92
The particular nature of the Christian Democrats' system of mediating interests and the
structural weakness of the Italian economy were such as to bring about a crisis sooner or
later even without the external shocks of the early 1970s. In any event, the suspension of
dollar convertibility and, above all, the impact of the oil shock and the dizzying rise in the
price of crude exaggerated the crisis conditions existing in Italy in the mid-1970s, setting
in train a process of restructuring the Italian economy which undermined the foundations
of the Christian Democrats' consensus system until it ultimately collapsed in the early
1990s.
The crisis in the 1970s also introduced a new phase in European integration, as the
countries of western Europe found themselves faced by an international crisis of
unforeseeable proportions which had the effect of accentuating the economic divergence
and differences between strong and weak countries. This was the starting point for a relaunch
of the European integration process, which subsequently led to monetary union. In
this new phase Italy could no longer play a role in championing integration as it had in
the 1950s. This was in part because of the economic crisis which prevented it from
keeping pace with other European countries, and from complying with stringent
requirements such as maintaining exchange rate stability, and partly because to play a full
part in Europe it would have had to dismantle or reorganise a political and economic
system on which Christian Democrat power, and subsequently that of the other
8
V. Eugenio Scalfari,– Giuseppe Turani, Razza padrona. Storia della borghesia di stato e del capitalismo
italiano 1962-1974, Milano, Feltrinelli, 1974
9
V. Augusto Graziani, , Lo sviluppo dell’economia italiana. Dalla ricostruzione alla moneta unica, Torino,
Bollati Boringhieri, 2000
12
government parties, was based. Dismantling the system of patronage and public
intervention was probably unthinkable for the political leaders of the time, and was in any
event not a solution which could be achieved rapidly. The only available solution was to
deal with the crisis in state finances and the economy, accepting high levels of inflation
incompatible with exchange rate stability and, as a result, using competitive devaluation
to recover the export ground lost through the inflation differential vis-à-vis other
European countries. Italy thus became an unreliable partner with little credibility in
Europe, and finished by depending on the economic support of Germany, from whom it
obtained significant loans.10
The crucial role of the German economy and finance in supporting Italy finally found
concrete expression with Italy's entry into the European Monetary System and the de
facto acceptance of a European economic policy based on the economic policy of
Germany and the role of the Deutschmark. This relationship made it possible to regain
ground internally, where the aim was to contain the effects of the crisis while shoring up
the patronage-based consensus which had by now been widely adopted by other parties in
the ruling coalition. The patronage triangle linking the private sector with the parties and
the State, through which the parties acted as intermediaries in the allocation of major
State commissions to a narrow circle of private companies, was actually strengthened to
meet the financial needs of the parties, which were expanding their bureaucracy while
their revenues were shrinking during the 1980s as external sources of funding dried up
and the crisis hit traditional internal sources of finance.
The 1970s were characterised by clear signs of an internal crisis, of which the terrorist
phenomenon, and the dramatic events which led to the abduction and murder of the
Christian Democrat leader Aldo Moro were only the most prominent aspects. The first
major political corruption scandals, the collapse of local finance, the electoral advances
made by the Italian Communist party and the new political direction introduced in the
Socialist party with the arrival of Craxi all flowed from a multiplicity of circumstances in
which the common denominator was the crisis in the Christian Democrat power system
created during the 1950s. Against this background there emerged the first dramatic
disputes within the Italian ruling elite, with politicians trying to rescue the patronage
system and some elements in the technocratic elite (in particular the Banca d'Italia)
pushing for a drastic restructuring of the entire system and for an end to the collusive
relationship between the powers of the State and certain unreliable individuals in the
narrow but powerful private banking sector.11
This clash was to be repeated at other
10
V. M. Guglielmina Tenaglia Ambrosini, La moneta e l’Europa da Bretton Woods a Maastricht e oltre,
Torino, Giappichelli, 1996; Paul Ginsborg, , L’Italia del tempo presente. Famiglia, società civile, Stato
1980-1996, Torino, Einaudi, 1998.
11
The conflict between the Banca d'Italia and the group which gravitated around the financier Michele
Sindona and his private bank remains one of the most obscure episodes in the history of the Italian
13
stages of Italian political and economic history and played a crucial part in the successive
developments in Italy's relationship with Europe, particularly through the critical role
played by men such as Carli and Ciampi in the various phases of negotiation and
membership of the European Monetary Union. It seemed possible to force the
restructuring process through a policy of "tying one's hands" (or "external constraints"),
which had remained in the memory of some of the key players as the most effective
method for bypassing the insurmountable obstacles to the modernisation of the country
erected by the political class. This modernisation would entail the dismantling of the
State economic structures set up under fascism during the 1930s and transformed by postwar
governments into a tool for political mediation which met their own electoral needs,
but also the pursuit of a policy of partnership with trade unions and the Communist Party
which based its consensus on the existence of a large and organised working class. Such a
system had represented one of the many ad hoc solutions in Italy's history, which
nevertheless had led the Italian economy in a different direction from that chosen by the
other continental economies with which it had to integrate and towards which it would be
vital to converge.
The attempt to stabilise the internal situation in Italy during the 1980s took the form of
short-term support policies which made it possible to maintain the existing structure
whilst further eroding its basis by attempting to remain coupled to the European
integration process in the hope that it would once again salvage the Italian national State
(in the sense of rescuing the nation-state as proposed by Milward for the first stage of
European integration). The aim was to recover competitiveness through a process of
industrial restructuring which would increase the technological level of Italian business
while exploiting to the full the resulting rise in unemployment to keep real wages low
(even for highly specialised workers) and to reduce the bargaining power of trade unions
and parties on the left. A policy of growing internal debt was adopted at the same time,
based on the marked tendency of Italian families to save and an increase in the pressure
of indirect taxation. A series of attempts to restructure the system of State holdings and to
reorganise the tax system failed completely. This option would have seriously impaired
both the party funding system and the system for attracting and maintaining consensus,
alienating from the ruling cliques those classes and groups which had kept them in power
in exchange for continuing privileges.
Meanwhile in Europe great progress had been made in relaunching the integration
project, particularly in the economic field. The Single European Act and the decision to
move towards the creation of a single, integrated and competitive Europe-wide market by
1992 signed the death warrant for the Italian model of a mixed State and private economy
Republic. Political factions anxious to support Sindona took action against the directors of the Banca
d'Italia, leading to the arrest of Governor Baffi and the Director General Sarcinelli. Subsequently Sindona
and his ally Calvi of the Banco Ambrosiano both died under mysterious circumstances (they were almost
certainly murdered).
14
which was totally incompatible with the regulations governing the emerging single
market. De-coupling from the economic integration process was not an option because of
the role and magnitude of capital flows and inter-European trading relations in sustaining
the Italian economy. Remaining in the European Monetary System and taking part in the
single market and monetary union was thus a forced choice for Italy, despite the growing
opposition from major sectors in the Italian economic world. This opposition grew
substantially in the early 1990s when internal stagnation came together with the effects of
the German high interest rate policy necessary to fund reunification. This also forced
other countries in the EMS to gradually adapt their interest rates to German levels to
avoid an outflow of capital and exchange rate crises, with the obvious result that the
deflationary effects of German monetary policy were felt by all the countries in the
European Monetary System.
The mix of internal developments and the changing situation in the European Community
proved lethal, and brought about the collapse of the First Republic. The different sections
of Italian society which had supported the Christian Democrat power system throughout
the First Republic now gradually dissociated themselves from it as the system became
increasingly unable to guarantee the protection and equilibrium which it had built up.
Small traders, the traditional electoral base of Christian Democracy, were hard hit by the
widespread economic crisis and the diminished purchasing power of part of the
population caused by high unemployment and rising indirect taxation. Furthermore, the
government, to try to control inflation and to implement European legislation, had had to
abandon its traditionally hostile policy towards the retailing and distribution industry.
Supermarkets and huge shopping centres thus arrived very belatedly but emphatically in
the Italian distribution sector, causing the collapse of many small traders and the closure
of large numbers of businesses. At the same time the impact of taxation on the cost of
labour, which could no longer be compensated by the flow of subsidies and State aid
which had de facto reduced the burden, became increasingly intolerable for employers. In
northern Italy they began to turn away from the Christian Democrats or its traditional
allies towards alternative forms of political representation, and were attracted in
particular to the Lega Nord. This party also drew the votes of large sections of the
working class in the north, which regarded the now blatant corruption of the "Roman"
political class and the disorderly influx of immigrants (many illegal) as the main causes
of their troubles and the problems of the state.
Meanwhile European monetary policy played its part in the worsening Italian crisis.
While convergence towards the single market restricted State aid for business, the rise in
interest rates following German reunification had a damaging impact on the Italian
national budget which was now dependent on borrowing. This could not but increase the
budget deficit and worsen the problem of the availability of resources. In fact the
impracticality and the political unsustainability of adapting the tax system (with particular
15
reference to the system of controls and sanctions) and of reshaping the bureaucracy made
it impossible to carry out the only reforms which could have had any immediate effect in
checking a situation which was coming to a head.
Into this already disturbing situation there now erupted a series of corruption scandals in
which all the government parties and their leaders were gradually implicated and which
are usually collectively referred to as "Tangentopoli". At the same time a series of very
serious terrorist attacks organised by the Sicilian mafia but which extended to the rest of
Italy aggravated social tensions, and a spontaneous movement of revolt spread across
broad sections of the population, overcoming traditional class and party divisions and
preventing the weak and disjointed efforts of the government class to tackle what was
now clearly an unstoppable political collapse. The sequence of investigations opened on
prominent Italian political figures which sometimes led to arrests and remarkable
convictions but above all the clear evidence of rampant corruption emerging from the
investigations and in the media totally discredited the government coalition and brought
about the fragmentation or dissolution of the main Italian ruling parties, the Christian
Democrats and the Socialist Party, while strengthening the Lega Nord and the traditional
opposition parties on both left and right.
4 – Resisting marginalisation: Italy and the adoption of the Euro
The crisis in the European Monetary System which began in September 1992 gave a
further blow to the moribund First Republic when the Italian lira and the pound sterling
crashed out of the exchange rate agreement. In actual fact this crisis provided the
conditions for a rapid lessening of the Italian economic crisis and facilitated the re-entry
policy of the governments which followed. Initially, however, it was rightly seen as yet
one more aspect of the political, economic and social collapse of the First Republic.
The collapse of the First Republic had two direct consequences. Firstly, it brought about
the rising importance of the technocracy and its leading figures, who began to play a
crucial role in putting together policies to rescue the State and to assume significant
positions in the political and institutional fields. The most symbolic example of this is the
case of Ciampi, who left his position as Governor of the Banca d'Italia to lead a
government which remained in power from April 1993 to May 1994, and under which the
historic agreement between the government and social partners was signed in July 1993.
The agreement brought to an end the sliding scale system and indexation of wages and
introduced planned inflation rates as a benchmark for the renewal of contracts. This
innovation proved to be of vital importance in implementing the anti-inflationary policies
which made it possible for the Italian economy to move once more towards convergence
with its European partners, but it was also the first tangible result of the alliance which
had been established between the centre-left parties and the modernising technocracy.
16
The July 1993 agreement was possible only thanks to the backing of the PDS (the former
Communist Party) which was the party associated with the main trade union
confederation, the CGIL. This alliance gave modernising technocracy the power to
introduce those reforms which where necessary for economic recovery while the left
acquired the legitimacy to assume the government of the country, as in fact happened in
1996 under Prodi.
Secondly, the old political system and the old parties were now replaced by new ones
which tried to occupy the ground left open by the disappearance of the historical parties
and to rebuild a system of social alliances no longer based on ideological or class
differences but on the type of policies and reforms to be effected to strengthen the State
and overcome the crisis of the system. The Christian Democrats and the Italian Socialist
Party disappeared, while the old Communist Party, which had already split into the PDS
and the Rifondazione Comunista, continued to move closer to the government attracting
elements from the abolished parties and in particular creating a solid link with the socalled
Christian Democrat left, which subsequently merged with the PDS to form the DS.
The Christian Democrat right was drawn instead towards the Movimento Sociale Italiano,
now in the process of transformation into the Alleanza Nazionale. In time the Lega
Lombarda merged with other regional movements to form the Lega Nord. Finally, there
appeared Berlusconi’s party, Forza Italia.
During this period the old idea of "external constraints", now impracticable given the
crisis and the failure of policies designed to keep Italy in the EMS, was replaced by the
idea of "staying in Europe" as a way of resolving the dramatic internal crisis and thus
launching a modernisation process throughout the Italian system. This development,
seemingly superficial, in fact hid a crucial change in the entire Italian political system and
in the approach of the different political forces. Whereas during the 1980s the "external
constraint" strategy had had its champions in men such as Guido Carli and Giulio
Andreotti, men deeply rooted in the Christian Democrat establishment who sought to use
this strategy to consolidate and revitalise the existing state of affairs, after the crisis of the
early 1990s and the collapse of the First Republic the need to "stay in Europe" and the
Europeanising ideology in general representing the point of convergence between the
modernising technocracy linked to the Banca d'Italia and the rising centre-left which was
preparing to rule the country. "Staying in Europe" thus became the slogan of the former
opposition forces, those which had challenged the Christian Democrat system and who
wanted to build a new and different order. For this reason, and because of the strong
emotional impact which the obvious marginalisation of Italy in Europe had on the
population,12
Europeanism and membership of the European Monetary Union in
particular became a symbol of renewal and a goal to be achieved at any cost. This
12
V. Federico Rampini, “L’Italia svalutata” in Il Mulino Europa, XLIV, 1, 1995, pp.92-102
17
objective was achieved by the centre-left government under Romano Prodi, who was able
to make Italians accept a rigorous policy of economic restraint and increased tax pressure,
both by new forms of taxation and by a determined attack on tax evasion which was
staunchly resisted but which significantly increased the tax take and improved the budget
of the State, lowering the cost of servicing the debt. However, this success was to a great
extent conditioned by the economic situation of Italy in the second half of the 1990s. The
advantages of the devaluation of the lira came at a particularly favourable moment for
Italy due to the coexistence of a weak dollar and a strong Deutschmark. This was of great
benefit to Italian industry, which imported in dollars and sold in what was then a
Deutschmark area. The favourable economic circumstances, together with the relaxation
of the strict convergence criteria set by the Maastricht Treaty, made it possible to achieve
what even in 1993-4 had seemed unthinkable: the entry of Italy into the European
Monetary System from its inception. This genuine miracle was made possible mainly by
economic circumstances backed up by a rigorous internal policy. This policy has not
introduced and consolidated structural reforms such as to guarantee Italy's position in the
European scene, or even respect for the Stability Pact criteria and the ability to adapt the
Italian economic structure to the requirements of the Union. As in the past, Italy has once
again made a great leap forward in Europe during a fleeting moment of favourable
conditions, but there are reasons to doubt its ability to keep pace with its European
partners.
18
II -THE INTERNAL DEBATE ON EUROPE
With the collapse of the First Republic the old system of party and electoral identification
based on social class and post-war ideologies also came to an end. This system entailed
the contrast between communists on the one hand and the liberal-democratic parties,
which were also split on mainly ideological lines between Christian Democrat and
socialist or liberal lay parties, on the other. With the birth of the Second Republic, the
relationship with Europe became a critical factor in defining the reconstruction model for
the Italian political system, and one of the main contrasts was that between the Euroenthusiasts
of the centre-left coalition and the Euro-scepticism of the rival centre-right
coalition. This contrast was, and continues to be, based on reasons of internal politics and
concerning the political and economic model to be adopted in Italy. In other words, it was
a matter of deciding whether to reintroduce a patronage-style system based on the role of
public spending and state support to stimulate the internal economy, or to model the
Italian system on the basis of European rules and dictates, relying on development based
on competitiveness. In the first case, however, the Christian Democrat systems could not
be rebuilt as it had been before the crisis, because the scarcity of resources and the stillhigh
public deficit would, for long periods, prevent the recovery of the old system based
on the evasion or avoidance of tax pressure and support for economic activities through
state spending. It would therefore be necessary to find a way to cut other types of
expenditure to direct more resources to funding State spending. In the second case, it
would be necessary to dismantle the remains of the old system and adapt the Italian
economic structure to European models very quickly, a difficult and painful exercise in
view of the accumulated development lag and the structural limitations of the economy.
These imperatives obviously contributed to determining the type of support which went
to one coalition or the other, depending on the position of the electors who might be
benefited or disadvantaged by the kind of economic policy adopted. Since 1994 the two
centre-right and centre-left coalitions have alternated in government, with alternating
fortunes. After the victory of the centre-right (also known as the Polo delle Libertà or
Polo del buon governo, the coalition of freedom or sound government) in the 1994
election there followed the collapse of the coalition and the fall of the first Berlusconi
government. In 1996 the victory of the "Ulivo" centre-left coalition opened the way for
the governments of first Romano Prodi, then Massimo d'Alema, and finally Giuliano
Amato who succeeded in dragging the now battered coalition to the end of its term.
Finally, in 2001 the centre-right won a decisive electoral victory which enabled
Berlusconi to establish his second government, which remains in power today.13
13
see. Gianfranco Pasquino (ed.), Dall'Ulivo al governo Berlusconi : le elezioni del 13 maggio 2001 e il
sistema politico italiano, Bologna, Il Mulino, 2002
19
1 – The position of government parties
The current government coalition, which will certainly steer Italy through its six months
holding the Presidency of the European Union, consists of three main parties and the
Biancofiore, a federation of small parties and movements which are Catholic in their
outlook and which developed out of the fragmentation of the old Christian Democracy
party. The present government coalition is practically the same as that which supported
the first Berlusconi government in 1994, but there have been significant internal changes
in both party structures and the aims and importance of its various components. The
Euroscepticism which characterised a part of the coalition during the period in power and
immediately after was subsequently tempered during the period of strongest enthusiasm
for entry into European Monetary Union, when some of the parties in the current
government coalition, then in opposition, recognised the need for Italy not to be
marginalised in Europe and supported the Prodi government through some important
periods when it risked losing the external support of the neo-communists which enabled
the government to remain in power.
The position of Berlusconi's two main allies has also changed, contributing to a more
stable and reliable picture. The composition of the coalition which supported the first
Berlusconi government caused the prime minister serious embarrassment. One of his
main allies was the MSI (Movimento Sociale Italiano), an avowedly neo-fascist party
which, though it was in the process of modernisation thanks to a generation of leaders
who were not directly compromised by the fascist regime, had not broken the ideological
link with fascism and Mussolini. This fact exposed the Berlusconi government to the
hostility of all the antifascist fringes in the other groupings, as well as the unusual
coldness of the European partners. Further, the presence of neo-fascists in the coalition
precluded the possibility of forming broader alliances with moderate forces which were
determined not to be compromised. This persuaded the leaders of the MSI to abandon the
weighty neo-fascist heritage and transform the MSI into a conservative party of a neoGaullist
and democratic stamp, named the Alleanza Nazionale. This operation succeeded
thanks to the breakaway of the most extremist and avowedly fascist wing of the old MSI
which formed a movement called Fiamma Tricolore, but mainly because of the presence
in the party of a young leadership attracted to the possibility of coming to power.
The other main party allied to Berlusconi is the Lega Nord. This party represents one of
the most widely discussed peculiarities of the Italian political system and played a major
role in the transition between the First and Second republics, proposing an entirely new
model, at least in the Italian republican system, of electoral relationships based not on
class but on the cross-class community of interests emerging in the North of the country
and cemented by the widespread hostility to the government methods of the Christian
Democrat system. Born from the merger of the powerful Lega Lombarda and the various
20
other minor regional parties linked by a marked local dimension, the Lega Nord
represented, and continues to represent, a crucial factor in the Italian political scene. Its
electoral base, which is made up of small businessmen and workers in the North, makes it
a somewhat unlikely element in a firmly anti-populist centre-right coalition. Furthermore,
the secessionist ambitions of the Lega, which has openly called for the North to break
away from the rest of Italy, has created much embarrassment both to the Berlusconi
government and in relations with the other government allies. Among the coalition parties
the Lega is the one which has expressed the strongest European sympathies, although
these sympathies have now given way to hostility towards "interference from Brussels".
While Forza Italia sees Europe as an obstacle to restoring the Christian Democrat
economic model, and the MSI - later the Alleanza Nazionale or AN - was led by
traditional nationalism and hostility to the European partners to keep its distance from the
European project, the Lega had developed a rather interesting vision of a Europe of the
regions, in which nation states (including the Italian state) would dissolve, leaving the
task of local administration to European macro-regions. This interpretation, developed
after the end of the experience of government in 1994 and at a time when the Lega was
looking for openings to develop its own secessionist policy, came up against the reality of
European relations and caused the leadership to change its position drastically in the
direction of anti-Europeanism. However, there remains a strong perception of a possible
link between reducing dependency on Rome and a reform of the European institutional
structure which would extend regional independence. Representatives of the regions in
Italy and other European countries also applied pressure for such reforms at the European
Convention. In any event, the Lega's withdrawal of its enthusiasm for Europe was
followed by a temporary abandonment of the secession project. During the Ulivo
governments the government established an ambiguous relationship with the Lega,
satisfying its aspirations to independence through a federalist reform of the Italian State
which seems in reality to have mainly been a political operation to strengthen local
autonomy through a model favoured by the left rather than the Lega. Recently the
secessionist project which contributed to isolating and weakening the Lega has given way
to “devolution” which implies the transfer of important powers from the central State to
local administrations. The introduction of devolution is likely, however, to weaken the
central State considerably, and to widen the gap between the rich regions of the North
and the more disadvantaged regions ion the South. The idea of devolution seems to have
been the key to the renewed alliance between Forza Italia and the Lega which
subsequently led to the electoral victory of 2001.14
What devolution means for the
country and whether it will ever really happen remains, at present, one of the most
disquieting questions for Italy and for the stability of the ruling coalition.
14
V. Luciano Vandelli, Devolution e altre storie. Paradossi, ambiguità e rischi di un progetto politico,
Bologna, Il Mulino, 2002
21
The main government party is now Forza Italia, which is the party of the President of the
Council, Silvio Berlusconi. This party, formed in 1994 immediately after the elections of
that year, initially attracted to its ranks many “new men”, in the sense of figures not
directly involved in the old system of government or the old parties. Many of these new
men nevertheless had a clear political identity which could be traced back to Christian
Democracy and the socialist parties of the First Republic (the Partito Socialista Italiano
and the Partito Socialista Democratico Italiano). Forza Italia erupted on the Italian
political stage with an ultra-liberal programme, very hostile to the then-existing social
security system and social services. The tone of the party propaganda was characterised
by a ferocious and now out-of-date anti-communism, and by the attempt to present Forza
Italia as a kind of new Christian Democracy which could defend freedom in Italy against
the rise of the left. In the economic field, the recipe proposed by Forza Italia consisted of
the liberalisation of business and the labour market, and tax reductions to increase
consumption and reduce the tax burden on business. Berlusconi's electoral promise to
create a million new jobs was famous. The Thatcherite liberalism offered by Forza Italia
and its leader was however mainly directed against certain social classes and against a
series of guarantees and services which these classes enjoyed at public expense, but it
avoided tackling thorny questions such as the reform of the bureaucracy or the fight
against tax evasion, which were obviously crucial problems for the country. Berlusconi
thus attracted very strong hostility from the trade unions and the working class, who
succeeded in setting up a series of major demonstrations such as had probably never been
seen in Italy, and which played their part in accelerating the fall of his government.
The failure of the first experience of Forza Italia in power, the strongly centralising
character of it leader and the legal problems which dogged it during its first period in
office persuaded some of the major figures in the party to distance themselves, while
others re-considered the party's approach to its electors and allies. In fact it was the
collapse of the difficult balance created by Berlusconi in building a system of alliances
which precipitated the fall of his government. However, there were significant changes in
terms of electoral support too, particularly in relations with industrialists and in the
regionalisation of the vote. The system of alliances which supported the first Berlusconi
government represented an extremely hazardous political balance. Forza Italia operated
on a vision not of a single alliance, but of a dual alliance linking it in the North with the
Lega Nord (the "Polo delle libertà") and in the South with the MSI ("Polo del buon
governo" or coalition for sound government). This was because the Lega Nord was very
unpopular with electors in the south for its anti-southern programme, while the MSI
could not be promoted in the North which had lived through the fight for liberation
against Nazi and fascist troops. Forza Italia thus ran alongside the MSI in the South,
while in the North it presented itself together with the Lega Nord. In this way the two
alliances, separate but both based on Forza Italia, obtained barely enough deputies to
form a parliamentary majority, provided that they could cooperate, which appeared to be
22
impossible after a first brief period. Relations with industrialists and other category
associations which could provide electoral support was initially based on Berlusconi's
past experience as an entrepreneur and on general support for liberal ideas from
businessmen. In reality, while Berlusconi's party received enthusiastic consent from small
and medium entrepreneurs whose business strategy was often based on containing labour
costs, leading figures from major industries and finance were much more lukewarm
towards Berlusconi's political programme which did not resolve the structural problems
and which risked reducing Italian credibility still further in the financial markets. Other
category associations which traditionally supported the Christian democrat system, such
as traders, also could not help but notice that a policy aimed at squeezing salaries and
reducing services would have drastic consequences on the willingness of families to
consume. The first Berlusconi government thus failed in its most ambitious aim, which
was to put itself forward as the heir to Christian Democracy and to re-incorporate the
different segments of the electorate which had formed the basis of the previous system of
power.
During its years in opposition the political programme of Forza Italia underwent some
important changes. Some are the result of the legal problems of its leader, who has been
investigated in a number of trials which could result in guilty verdicts so serious as to
make his status incompatible with the role he has now resumed if not actually such as to
finish his political career entirely. This has made justice one of the main themes of the
current ruling coalition's programme. Plans to reform the judiciary have been put forward
which restrict its independence and a series of laws have been proposed which seem to
have raised further barriers to the operation of the already problematic Italian system of
justice. In the view of the opposition and of many observers outside the political contest,
these laws seem to be specifically designed to slow or block the legal proceedings in
which Berlusconi and his close collaborator and former defence minister Cesare Previti
are involved. Recent differences with the European partners on the coordination of justice
and the so-called European arrest warrant appear to share this motivation. Even more
obvious is the abandonment of the unchecked liberalism of 1994 and the attention now
focused on the "major projects" (such as the bridge over the Medina Straits) with which
Berlusconi aims to relaunch the economy, and which must have appeared very credible to
the Sicilian electorate and those who have always played an important part in dominating
this electorate, given that in the 2001 elections the coalition under Berlusconi had
unprecedented success in Sicily.
Berlusconi's return to power has also been marked by a series of conflicts and
misunderstandings with other Member States of the European Union. The regulations
introduced by the Berlusconi just before the final introduction of the euro for the reimportation
of illegally exported capital created bad feeling because of the risk that the
European underworld would take advantage of an opportunity to launder capital from
23
doubtful sources. Similarly, the conflicts regarding the European arrest warrant, which
the Italian government attempted to restrict to a few crimes excluding exactly those
which might cause serious embarrassment to the Italian prime minister, and the
withdrawal from the Airbus A 400 programme have contributed to isolating Italy in
Europe. Finally, the recent Italian blocking of some important decisions relating to tax
harmonisation in exchange for which Italy demanded the maintenance of the relief for
Italian carriers and concessions regarding the fines imposed on some Italian producers for
exceeding milk production quotas in recent years, have raised once more the problem of
the manner in which the Berlusconi government handles its relations with Europe. These
events clearly reveal the close link which exists between internal problems and the
European policy of the current Italian government, and the amateurishness with which
these issues are handled in a difficult area such as European negotiations. The Airbus
problems are most probably due to the fact that the Italian aeronautical industry has ties
with the Americans, and is not keen to become involved with the European consortium,
while in the milk quota case there is an obvious connection between the electoral support
which the Lega derives from the producers in ferment and the desperate attempt to find
them a way out of payment of the fines. There remains, however, the problem of the total
subordination of major European decisions to minor national interests by a government
which is preparing to play a crucial part in the coordination of European policy.
That the ruling coalition and the prime minister himself lack sufficient experience and
professionalism in international relations in general, and European relations in particular,
was obvious even before the repeated disputes and gaffes on the international stage posed
the problem. This must have been why, when the second Berlusconi administration was
initially formed, it included Mr Ruggiero, a figure of great experience and international
stature, as Minister for Foreign Affairs. However, he resigned when the extent to which
the actions of the remaining members of the government and the prime minister would
restrict his scope for action and, in particular, his credibility, became clear.
2 –The position of the opposition parties
The current opposition is mainly composed of the parties which supported Romano
Prodi's coalition government. The Ulivo made "staying in Europe" the symbolic aim of
its political programme. Behind this objective there lay an attempt to modernise Italy,
which remained largely uncompleted, in terms of both solutions to the structural
problems and real renewal and convergence with European models. This relative failure,
only partly obscured by the striking but temporary success of entry in Monetary Union,
may be ascribed in part to the conflicts and fragility of the coalition which supported the
Prodi government, a coalition based on the Partito Democratico della Sinistra (PDS), the
direct heir of the powerful Italian communist party, with a series of minor lay/socialist
24
parties and the so-called Christian Democrat Left. In practice the government was able to
stay in power only with the external support of the neo-communists (Rifondazione
comunista), and when this party withdrew its support the government fell. Following
various disagreements regarding the attitude to adopt to the centre-left government, a
section of Rifondazione Comunista formed an independent party called the Partito dei
Comunisti Italiani (PdCI), offering a model of neo-communism more alive to the internal
political situation and less influenced by extreme leftist movements and leanings.
Today, the main opposition parties are the Democratici di Sinistra (DS), a merger
between the old PDS and some minor parties from the old Christian Democrat left and
the disbanded Partito Socialista Italiano, and the Margherita, a federation of parties with
non-marxist origins which has acquired a degree of importance in recent elections, partly
due to the fact that their leader, Rutelli, was also the centre-left coalition's candidate for
the post of Prime Minister. The Margherita, which also includes the Democratic
movement which linked with Romano Prodi during the successful election campaign of
1996, and on which the Ulivo coalition hinged, has acquired strong European
associations, making the "European dimension", seen as the future level of government,
one of the main planks of its political programme. In the Margherita programme,
structural reform of Italian institutions is linked to changes in the structure of the Union
itself, focusing on enhancing the role of local authorities by applying the subsidiarity
principle, and thus via interaction with the European level of government. The
programme also makes room for subjects such as the creation of a federal Europe, and the
reform of the universities with a view to "Europeanising" the Italian system by
involvement in European university networks.
The image projected by the main opposition coalition (which is still formally identified
with the Ulivo) to the Berlusconi government, however, remains that of the last centreleft
government in the previous parliament: a divided coalition with an ill-defined
programme, big on ideals but lacking practicality. Further, one of the main sources of
division came from the role of the main coalition party, the DS. Its partners were fearful
of its domination, while sections of the party or elements and associations traditionally
close to it denounced the crisis of ideals and policies. In any event, Europe represents one
of those big ideas often used by coalition party leaders as a substitute for a political
programme which they seem unable to define. There remains the essential notion of the
link to Europe as a vital tool for modernisation, and for bringing normality to an
abnormal country.15
15
“Un paese normale” was the title of a book published by the former prime minister Massimo D’Alema, in
which the author sets out the political objective of making Italy a modern country, free of the many
anomalies which characterise it.
25
Other parties and movements, outside the Ulivo but converging with it, can be found on
the margins of this coalition. These include the Di Pietro list 16
and the Partito dei
Comunisti Italiani, the PdCI. These two organisations are at one with the main opposition
coalition in denouncing the dangers and limits of the Berlusconi administration, in which
they detect the representation of patronage interests on the margins of legality, and
potential threats to the stability and progress of the country. Some form of cooperation
between these groupings and the Ulivo is therefore likely in conducting opposition to the
government in power. Less clear is the relationship with the Rifondazione Comunista,
which, while fiercely opposed to the current ruling coalition, seems unable to find enough
points of contact with the Ulivo to be able to guarantee an electoral alliance or the launch
of joint initiatives.
At the moment, a change in the ruling parties seems unlikely in the near future. However,
the opposition coalition is preparing for the 2006 elections, trying to regroup and to find
an authoritative leader able to stand against Berlusconi. It is thought that this leader might
once again be Romano Prodi, and this hypothesis has been strengthened recently by
rumours that he will not stand for re-election at the end of his term as President of the
European Commission. In this event the pro-European leanings of the coalition, already
considerable, will receive a further boost. This pro-European position is emerging in the
programmes and documents of a large proportion of the opposition parties in the Ulivo
camp, and has recently enabled the Partito dei Comunisti Italiani come to an agreement
with European Federalist Movement to campaign for Convention on the Future of Europe
to draft a constitution to be submitted to a European referendum. This would make it
possible to remove the authority to approve the constitution from the Intergovernmental
Conference, which, in the absence of agreement, could bury the entire constituent
process. In any event, the PdCI (together with the Movimento Federalista Europeo) and
Margherita seem to have found a benchmark shared value in the "European social
model", that is, the system of protection from the major life risks (illness, accident, old
age and unemployment) which is a feature of social legislation in most of the Member
States of the European Union. The idea of incorporating the European social model in the
future constitutional treaty, and to extend this system of guarantees to the newly admitted
countries, seems to be the common feature which unites the European policy of the
Ulivo, the Italian parties of the left and the main trade union confederations.
Recently the opposition has also been drawing attention to Europe and the responsibility
of the Berlusconi government in the recent arguments and splits caused in Europe by the
Anglo-American intervention in Iraq. Here again, hostility to the Berlusconi government
and its policies, and the firmly pacifist stance of the Italian left and the Catholic
16
Antonio Di Pietro, Milanese judge and leading figure in the Tangentopoli investigations, entered politics
after resigning from the judiciary, served very briefly as a minister, and subsequently founded a movement
known as Italia dei Valori.
26
groupings come together to identify with the European Union position, particularly that
of the Franco-German axis. This convergence between Catholic and leftist voters could
become the key to the electoral policy pursued by the centre-left, which tends to identify
pacifism with Europeanism, and will certainly force the Berlusconi government to move
more cautiously, particularly in respect of the pacifist movement and the European
Union.
3 – Minor parties, movements and pressure groups
Opposition to the Berlusconi government is not restricted to the centre-left coalition, but
also involves other minor parties such as the extreme left represented by Rifondazione
Comunista and the extreme right of the Fiamma Tricolore, which hold different positions
vis-à-vis Europe and the relationship to be established between internal and European
policies. The Movimento Fiamma Tricolore states that it is favour of "strengthening the
geopolitical role of Europe and Italy" and "European geostrategic independence" in the
sense of European political and military coordination capable of safeguarding vital
interests (in energy, economics, security and military terms) and of freeing Europe from
dependence on NATO. However, this particular interpretation of European policy is
balanced by a complete rejection of economic and financial integration or the relocation
of industries outside national boundaries. For the Movimento Fiamma Tricolore Europe
appears mainly to represent a military alliance, rather than State or supranational body.
Rifondazione Comunista, on the other hand, appears to take a critical but constructive
line on a united Europe which it regards as a potential method of upholding the ideals of
social justice which the party holds dear.
A separate case is the so-called Pannella-Bonino List (in practice, the old Partito
Radicale), with its links with the former Radical leader Marco Pannella and the former
Commissioner Emma Bonino. This list, which has benefited electorally from Bonino's
popularity during her term in Brussels, has included a series of proposals for Europe in its
electoral programme, focusing on a federalist Europe with strengthened institutions. The
Bonino-Pannella list suggests a revision of the institutional shape of the European Union,
including the direct election of the President of the Commission, a clear-cut division
between the Commission's executive powers and the legislative powers of the European
Parliament, a transparent allocation of powers between national States and European
institutions, and the transformation of the Council into a Federal Senate.
As well as the Italian political parties, there are also movements such as the pacifist
movement, and the "girotondo" or "ring-o-roses" movement, both of which are critical or
openly hostile to the Berlusconi government and its decisions, particularly in European
and foreign policy. The Girotondi per la Democrazia movement has emerged recently,
27
not least due to the efforts of the film director Nanni Moretti and a group of university
professors. The movement is avowedly anti-Berlusconi, and has taken the lead in
organising pacifist demonstrations in the form of round dances ("girotondi") to defend
those institutions which most often come under attack from Council President Berlusconi,
including the courts and the State television network. However, it also represents an
element of friction within the centre-left coalition itself because of its very critical
attitude towards the DS leadership and the emerging convergence with the internal
opposition within the DS (the "correntone" movement).
It is more difficult to interpret the position of the various interest or pressure groups
which can be identified in the economic field and in the public administration. It
nevertheless seems clear that both employers' groups and trade unions have a positive
attitude to the European Union. Trade unions see Europe as a body which can offer them
opportunities and solutions which cannot be realised at national level, whether for
encouraging economic growth or for the defence and consolidation of the social
achievements of workers and the welfare system. Employers' groups, on the other hand,
regard Europe as a coordinating and rationalising force in nation economic policy.
Recently Confindustria, the organising representing Italian industrialists, has focused
much attention on the infrastructure problems of the transport sector and the possible
impact of the backward, over-burdened Italian transport system, particularly the railway
network, on relations with the new markets in eastern Europe. It seems no accident that
this subject has recurred insistently in the Italian Presidency programme for the second
half of 2003.
28
III - THE INTERNAL DETERMINING FACTORS FOR ITALY'S EUROPEAN
POLICY
As has been shown by the brief historical reconstruction of relations between Italy and
the European institutions in the first part of this paper, the Italian internal situation and
internal political considerations have always had a significant influence on Italian
activities in Europe and the way in which Italian representatives have acted (or have
avoided acting). It thus seems plausible to suppose that the major themes which will
attract the attention of the Italian presidency in the second half of 2003 will be those with
the closest links with internal matters and Italian national interests. Prominent among
these are the consolidation of relationships between EU Member States following the
recent tensions over the war in Iraq and developments in the reform process for the
European institutions in connection with the enlargement process and the preparation of a
European constitution. To these will probably be added the matter of the failure on the
part of certain countries to respect the parameters of the stability pact and the risk (or
opportunity) that other countries may be able to ignore such restrictions in the future. All
three of these matters are interwoven with issues in Italian politics and may have a
significant impact in terms of determining the current government's room for manoeuvre
in internal policy making. There are also a number of other themes which, despite
appearing less significant, are of great importance for the future of the Italian economy,
where the activities of the Italian presidency will certainly not lack dynamism.
1 – The government and the restrictions deriving from EU rules
The issue of the limits set by the stability pact on the Italian government's economic
policy has become particularly pressing as a result of the concomitant policy of lightening
tax burdens and the difficulties in containing spending encountered by the Berlusconi
government soon after it took office.
The measures taken by the government to tackle the budgetary problem and respect the
stability pact criteria have largely been defined as non-structural measures which are
likely to provide only a temporary respite from the problem. Indeed, being based ononeoff
operations such as amnesties for outstanding taxes, these solutions may at best allow
the government to meet the stability pact targets for next year, but certainly do not
constitute the basis for a suitable longer term stability plan. Furthermore the electoral
support for the current coalition government owes a great deal to promises and
expectations of reductions in the tax burden and an increase in public investment as a
flywheel of the economy. In certain cases these investments are required to ensure the
operation of structures and infrastructure which are vital to the country and for which
29
maintenance and upgrading has too long been held back in order to tackle the budgetary
requirements of the previous governments. In other cases public spending serves to
revitalise electoral support mechanisms which have fallen into disuse as investigations
progressed during the Tangentopoli era and during the periods of crisis and budgetary
restraint which followed between the mid-1990s and the adoption of the euro.
This model of relationships with the electorate has many echoes of that used by the
Christian Democrats and goes hand in hand with a policy of softening tax pressures via
various amnesties and simplifications which seem to encourage evasion and avoidance
just as happened during the first republic. The growth of Forza Italia in terms of electoral
support, inter alia at the expense of its own allies, seems to bear witness how a part of the
Italian electorate has welcomed a return to the Christian Democrat model, which may
allow Berlusconi's party to succeed where it had failed previously, i.e. in establishing
itself as the direct heirs to the Christian Democrats, reproducing their methods of
government and recapturing its electoral support.
Unlike 1994, the state of the national budget would now make it possible to implement a
more sustained spending policy, at least for brief periods, via increased debt and holding
down tax pressures. The main obstacle comes from Europe itself and from the stability
pact, which sets drastic limits on the government's room for manoeuvre and thus
threatens to prevent the implementation of the project for a Christian Democrat
restoration on which the real pact between Berlusconi and his electors relies. Only an
easing of the stability pact or the acceptance of broad exemptions to it in favour of Italy
will make it possible to combine the policy of reducing the tax burden as well as funding
major projects (and hence the large contracts used to distribute money and work to its
own electoral base). It does not thus seem a matter of chance that Economy Minister
Tremonto should at the end of 2002 have proposed to reinterpret the stability pact by
excluding funds intended for infrastructure, defence, structural reform and foreign aid
from the calculation of the budget deficit. This type of reinterpretation, which is wholly at
variance with the spirit of the stability pact, would make it possible for the Berlusconi
government to implement its promised policy for major projects without contravening the
agreements entered into at European level.
2 - Internal problems and Atlanticism
At present the most problematic aspect of the forthcoming term of the Italian presidency
is, at it has been during the current Greek term, the profound confrontation which
emerged within the EU between the countries that supported the Anglo-American
intervention in Iraq and those that opposed it. Clearly the main front here is relations
between the UK and France, the former being committed alongside the USA in Iraq in
30
open contrast to the Franco-German position and somewhat isolated within the EU,
although some other Member States, most prominently Spain and Italy, and several of the
accession countries came out in favour of the American operation and provided support
for it in various ways.
Italy, and prime minister Berlusconi, have so far played a part of some importance as
regards the crisis in the EU, fuelling it by taking a stand very firmly in support of the UK
and the USA and providing direct military support, albeit with a much lower profile than
that of the UK. The Italian government sent a contingent of its best troops to Afghanistan,
allowing the Americans to free up an equivalent force to send to the Gulf. This contingent
is now operating under American command in an area which can be considered to all
intends and purposes as a war zone and thus constitutes military support for the whole
operation of political and military restructuring in central and western Asia which was
launched by the Bush administration with the invasion of Afghanistan. Indeed, should
operations in the Middle East extend to other countries or turn out to be longer and more
difficult than anticipated, it cannot be ruled out that the Italian contingent in Afghanistan
may be strengthened, freeing up more British and American troops for the Iraqi front.
While the Italian constitution represents an almost insurmountable obstacle to direct
intervention in the Gulf, particularly in the absence of a UN resolution, the operation in
Afghanistan can be represented as an operation with humanitarian ends and, should
British or American troops need to be replaced, the sending of Italian forces can be
justified as vital to the maintenance of peace or for the safety of the contingent already
present. The Italian army and government are thus providing active support for the
intervention in the Middle East via a policy of replacing the British and American forces
in less problematic theatres of operations. Latterly, soon after the fall of Baghdad the
Italian Parliament approved the dispatch of around 3000 men to Iraq to maintain public
order and to allow the transport of aid which the British and Americans would have found
it difficult to escort because of the lack of manpower. This contingent will be operating
under British and American command and it is not clear what will happen in the event of
attacks or a guerrilla situation involving the area in which Italian troops are deployed.
Clearly this operation has its economic and political costs. Any attack on Italian troops or
a substantial reinforcement of the contingent would have major repercussions at home
where the departure of the first contingent for Afghanistan led to sharp dissent and part of
the opposition voting against it in parliament. It would thus be of primary interest to the
Italian government to soften the opposition from other European countries to the British
and American initiative and to involve them in the policy of indirect support and
replacement on other fronts. In various recent interviews the prime minister has on
several occasions reaffirmed the need to strengthen military cooperation at European
level and criticised the position taken by France, who by threatening to use their veto
prevented the approval of the UN resolution that would have authorised intervention in
31
Iraq. Had that happened, it would have provided Italy with a constitutional basis (inter
alia thanks to the earlier participation in the first Gulf War) for sending troops and
equipment directly to fight alongside the British and American forces.
3 – The stirrings of Italian federalism and the European Constitution
A pivotal issue for the future of the Italian government and its relations with the
European institutions is the institutional reform of the European Union and the adoption
of a European constitution redefining not just the powers of the EU but also those of the
nation states and, indirectly, of sub-national entities. The specific link between this
process and the internal dynamics of Italian politics lies in the fact that a redefinition of
the powers of various levels of government that returns powers and spending capacity to
nation states or delegates them to the regions could simultaneously resolve both the
internal problems of the coalition, by encouraging the devolution which the Lega Nord is
seeking and the specific problems of electoral support for the entire coalition and Forza
Italia in particular. Were the government to reacquire room for initiative in certain sectors
of economic policy or to recover resources previously managed by Community
institutions, it would be able to go ahead with the expansion in governmental spending
with which it attracted the attention and the votes of a broad swathe of its electorate,
without necessarily needing to circumvent the restrictions imposed by the stability pact. It
would also be able to extend the powers and the autonomy of the regions, thus meeting
the aspirations of the Lega Nord.
This fact could be one of the aspects which has led the Italian delegate to the European
Convention, Gianfranco Fini, to a somewhat flamboyant opposition to the creation of a
federal Europe, as can be seen from the amendments proposed to various articles of the
first draft of the constitutional treaty proposed by the European convention. Fini, deputy
prime minister, leader of the Alleanza Nazionale and main ally of Berlusconi and his
party, introduced a series of amendments which can be considered as a clear expression
of the approach taken by the Italian government to the future of the European political
integration process. These amendments aim at safeguarding the sovereignty of national
states both by avoiding the use of the word "federal" and by limiting the number of cases
and ways in which the European institutions could impose their decisions on nation
states. This type of approach springs from the fundamentally anti-European nature of the
governing coalition where the Lega already sees Europe as an obstacle to its ambitions
for independence for the north of the country, the Alleanza Nazionale is reverting to its
nationalist traditions and Forza Italia is seeking to expand its room for manoeuvre in
order to be able to fulfil its electoral promises and establish a new consensus. Fini's
amendment to Article 11 is also worthy of note; he proposes restricting the freedom of
movement in Europe by replacing the references to the free movement "of persons" with
the phrase "of citizens of the Union". This would establish a constitutional basis for
32
limiting the right of movement within the EU for citizens of other countries, particularly
migrants and refugees, who are already subject to severe restrictions in Italy under the
"Bossi-Fini" law. Furthermore in an amendment to article 10 Fini, in line with
Berlusconi's repeated statements following the outbreak of the war in Iraq, strengthens a
proposal which speaks of "the progressive definition of a common defence policy",
giving a clear impression that it favours accelerating efforts towards integration in this
area. Lastly the Italian representative lines up with those who wish to see a clear
reference to the Christian roots of the values which inspire the European Union inserted
into the European constitutional charter, consistent with the clear nationalist principles
which have inspired trhe other amendments but in a way which conflicts with the fervent
pro-Atlanticism and the emphasis on the question of common defence, since the
Christian-centric position taken by the amendment would represent an obstacle to the
admission of Turkey into the EU. The echoes of recent events and the Italian
government's aims for a more aggressive European foreign policy emerge once again
from the amendment presented, again, by Fini to article 3 in which the entire point which
sets one of the objectives of the EU as "promoting peace, its values and the well-being of
its peoples" would be replaced by a passage proposing "the rigorous observance of
international law as a basis for peace between States and peoples". Here again the
proposal seems consistent with the pressure from the Italian government for Europe to
take on a more active international role, inter alia in military terms alongside the USA,
but runs counter to the principle of safeguarding and respecting the institutions and
political orders of the nation states proposed in other amendments, since the Italian
constitution itself sets out that "Italy repudiates war as an instrument of offence against
the liberty of other peoples and as a means of resolving international disputes; accepts, on
the condition of equality with the other States, the limitations on sovereignty required for
an order which ensures peace and justice between Nations; promotes and encourages the
international organisations established with that end".17
In this sense the Fini amendment
would be less consistent with the Italian Constitution insofar as that was not the text
amended. It could however be hypothesised that the pressure from the Italian government
for the establishment of a common defence policy is intended to create the conditions to
bypass the limits set by the Italian constitution and allow greater Italian involvement
(inter alia military) at international level.
The strong divergence between the Government positions set out by Fini and those of
other delegates such as Spini and Paciotti, who we can assume to be the closest to those
of the opposition in Italy, should come as no surprise. In the amendments proposed
jointly or individually by Spini and Paciotti, there is in fact a tendency to increase the
powers of the EU, putting it in a stronger position vis-à-vis the nation states and
broadening the range of areas in which the EU would have sole jurisdiction (foreign and
17
Article 11 of the Constitution of the Republic of Italy
33
security policy in the proposed amendment to article 11) or in which it should have a role
(social protection and quality of work, the fight against poverty and social exclusion).
There is in addition an explicit proposal that the EU should adopt the federal model. In
the field of immigration policies and the right of asylum the Paciotti-Spini amendments
introduce the possibility of granting European citizenship to citizens of countries which
are not members of the Union and stateless people "who have lived legally within the EU
for more than five years and share its values". Their position on the role of the EU in
keeping the peace is in total contrast with Fini's amendment. Here Paciotti and Spini
propose taking up almost in full the opening passage of article 11 of the Italian
constitution in an amendment to article 3 of the draft Convention to which they propose
adding the passage "The Union shall repudiate war as an instrument of offence against
the liberty of other peoples and as a means of resolving international disputes" with the
addition of a clear reference to respect for the United Nations charter. The differing
visions of Europe that characterise the opposing coalitions in Italy are this clearly
demonstrated within the Convention.
4 – The problem of the economic and social decline of Italy and the consequences for
the country's attitudes to Europe
There has of late been much discussion on the problem of Italy's industrial, and more
generally, socio-economic, decline. The signs of a decline are very clear in some sectors
and comparisons with other Member States seem to highlight still further the crisis which
Italy is undergoing. The most striking event has undoubtedly been the recent serious
difficulties which have struck the country's leading car manufacturer, FIAT, which has
had to suspend production at some plants and temporarily lay off a large number of staff.
The severity of the crisis at FIAT lies not merely in the danger that the flagship company
for Italian industrial capitalism may collapse, but also in the repercussions in the
secondary sector, all those small industries which operate primarily or exclusively to
supply parts or services to FIAT and which have thus automatically been dragged into the
car manufacturer's problems. Even for those unaffected by the FIAT crisis, the problems
of large-scale industry in Turin have created an image of an Italian industrial system, and
more generally a capitalist system, that is of a low standard and unable to withstand the
competition from more advanced and better structured capitalist systems. Long-standing
and never silenced accusations against the Italian entrepreneurial class - that they are able
to survive only by virtue of state aid, reluctant to modernise or invest in research and that
their only industrial strategy is to put pressure on pay, have once again surfaced in the
light of the experience of recent years. Indeed, the crisis at FIAT has been merely the
latest in a series of industrial restructurings and downsizings which have stripped Italy of
large-scale companies capable of leading the way in their sectors. From the 1970s
onwards the major industries - steel, construction, chemicals, electronics and now
34
mechanical engineering - have one by one gone into crisis and shown themselves
incapable of handling international competition and competing in foreign markets, or
even local ones when they are opened up to foreign competition. There is this a clear
perception that Italy is in industrial decline which seems as though it could be connected
with the contemporary social decline shown by the illegal relationships between
companies and politics which emerged during the Tangentopoli enquiries, and by the
decline in university education and above all scientific research. Recent governments
have taken steps to stem the "brain drain" of researchers who move to the USA or other
European countries in order to be able to make use of skills which they are unable to do
in Italy, because of the shortage of infrastructure but also and primarily because of the
lack of investment in the research sector and the patronage-based and completely
incoherent handling of assessments of scientific ability in the allocation of university
posts.
Industrial decline and the decline of research and university structures thus represent an
important aspect of today's Italian society and lead Europe to be seen as an element in
reform and modernisation which many now despair of finding within the country. As
Diamanti quite correctly underlines, Italians look to Europe and support it not so much
because of deep-rooted pro-Europeanism, but out of mistrust of the State and the Italian
political system.18
It is also true, however, that everyone supports "their own Europe",
and that thus the Europe which they would like or which they believe they see is not
Europe as it really is. This goes for individuals and political parties alike. In Italy no party
has declared itself as anti-European, but all are in favour of a Europe which privileges
and supports certain values and certain policies which are in turn those proposed by the
party in question. In the same way, the industry confederations and the trade unions are in
favour of Europe, but the Europe they want is not that desired by their adversaries.
18
V. Ilvo Diamanti, Gli italiani di fronte all’Unione Europea: il governo cambia, la fiducia resta, Paris,
Notre Europe, 2002, p.5.
35
IV - THE FUTURE ITALIAN PRESIDENCY
At the end of 2002 Greece and Italy presented a joint programme for their respective
presidencies in the first and second halves of 2003, setting out the main objectives and
events of major importance which would take place during the year. Obviously, at the
time when the programme was drafted it was not possible to predict the international
developments caused by the Iraq crisis or the repercussions this would have on political
cohesion within the European Union. Probably this programme will be laboriously
incorporated in the field of political coordination between Member States and some of its
main themes will be demoted to make space for more urgent necessities.19
In any event, the Greco-Italian programme remains the principal policy document for
analysis if we are to understand the main focus of Italian action during the Presidency, or
at least to understand how such action was planned and what were regarded as the
priority questions before recent international developments introduced other variables.
1 – The Greco-Italian programme and crucial events during the Italian Presidency.
The programme for the two Presidencies puts the emphasis on some major themes such
as the enlargement and reform of the European Union and simultaneously indicates other
areas of focus for the coordinating role played by the rotating Presidency. The
programme makes no clear distinction between the activities of the two Presidencies in
the sense that in general it does not allocate precise tasks to one Presidency or the other.
Such a division may, however, emerge from the timetabling of the various aims and the
main events to be organised which, depending under which Presidency they fall, end up
becoming the responsibility of either the Greek or the Italian Presidency.
The main theme in the programme is the enlargement of the European Union and
structural reform. The two Presidencies proposed to prepare the accession treaty for
future Member States, which was in fact signed within the proposed time; to move ahead
with the accession negotiations with Bulgaria and Romania; and to strengthen
cooperation with countries in the western Balkan region and Turkey. It will fall to the
Italian Presidency to organise the Intergovernmental Conference which will consider the
draft constitutional treaty under preparation by the European Convention
19
In a televised interview on 23 March, the Foreign Minister Frattini explicitly stated that the resolution of
conflicts within the Union and the consolidation of relations with the US would be of key importance for
Italy during the period of the Italian presidency.
36
Another important area will be the coordination of economic and employment policies.
The two Presidencies proposed to redefine the employment strategy and the rules for the
coordination of social security systems. In particular, it was planned to select a particular
topic for in-depth analysis during the second half of the year, focusing on pensions
systems and the requirements for the minimum pension age. This is an especially
important subject in Italy, where labour market and pension scheme reforms have been
and remain an area of bitter political conflict. The allocation of this topic during the
Italian Presidency, and its prominence, do not seem to be a matter of chance, given that
for the current government a Europe-wide redrafting of pensions schemes criteria could
provide the key to implementing a historic internal reform which has never previously
succeeded because of very strong popular opposition and the united veto of various social
groups and their representatives. It thus seems plausible that the government is attempting
to use the "external constraint" strategy during the Italian Presidency to introduce
pensions reforms which it would not be strong enough to impose alone.
Still on the subject of economic coordination, the Greco-Italian programme also proposes
to simplify the regulatory environment for business, to prepare a Green Paper on the
entrepreneurial culture and to draft a European Charter for small businesses. By the end
of the year the Erasmus-World programme should also be running. This is a support
programme for post-university preparation via the creation of European Masters courses
with financial support to attract students from countries outside the European Union to
universities in the Member States. The programme also mentions the debate on the
proposed review of the "Television without frontiers" Directive and the boosting of
measures intended to improve the quality of interactive media, measures which will be
promoted by the Italian Presidency and which will probably re-formulate at European
level the issue - much discussed in Italy - of prime minister Berlusconi's conflict of
interests, since as well as being head of the government he is also a leading entrepreneur
in the Italian media industry and one of the most important in Europe as a whole.
The programme also tackles the subject of sustainable transport and the creation of
efficient infrastructure connecting the Union with the Mediterranean area, the accession
states and the Balkans. The transport question, while it is of undoubted relevance for the
economy throughout the Union, is of particular importance in Italy. The relatively
peripheral position of the Italian peninsula brings with it the risk of remaining excluded
from the major trade developing or which will in future develop in the areas about to join
the Union. In fact the weakness of Italian infrastructure, and the disputes with
Switzerland and Austria regarding the regulation of road transport from Italy ,are likely to
greatly limit access to the new markets opening in the east, both because of the high costs
facing Italians, and because of the traffic restrictions which may be imposed in the
absence of European regulation. The problem of transport to the east is of historical
significance for the Italian economy; it arose in the immediate post-war years, but lost its
37
importance with the relative closure of central and eastern markets following Soviet
expansion. The accession of the former communist countries to the European Union reopens
the question of international transport in the same terms as in the past. What
attracts the interest of western European industries is not just possible new markets but,
above all, the opportunity to relocate some manufacturing activities, particularly those
using significant amounts of unskilled labour which is abundant and cheap in most parts
of eastern Europe. It therefore becomes necessary to be able to despatch semi-finished
goods east for finishing, or to be returned to Italy for more complex processing, at
reasonable cost. Only an efficient transport system can keep costs down and increase the
competitiveness of Italian products in the European market. There is also the risk that the
French and Germans will take control of transport routes to eastern Europe and the
Balkans, which would marginalise Italian exports in that direction, to the benefit of ports
in the south of France and Spain for trading between Mediterranean countries and the
Balkan-Danube regions.
Equally important for the economic future of Europe is the question of energy exchanges
with Russia, which is given considerable attention in the detailed explanations in the
programme. Here again, the creation of the proposed trans-European energy networks
and the linking of Italian structures to these networks could usher in a new era in
resolving the tradition problems of the Italian economy, even though in this case the
presence of strong competition between Member States is less obvious, and their
common interest in developing an efficient energy distribution network in Europe is more
pronounced.
A third major theme in the programme for the two Presidencies is the "European area of
freedom, security and justice". Two particular subjects fall under this heading, the
coordination of the fight against crime and terrorism, and asylum and immigration
policies. After the 11 September attacks, and given the current situation in the Gulf, the
importance of an effective coordinated security policy is obvious, and represents an
aspiration in the common interest of all the Member States. In the case of immigration
policy, its particular interest for Italy has been further strengthened by two important
internal factors. Firstly, the geography of Italy and the length of the coastline to be
controlled make the country particularly exposed to influxes of illegal immigrants and
refugees, some coming from very distant parts of Africa and Asia. For this reason the
need for a European immigration policy is felt particularly acutely in Italy. Such a policy
should encourage opposition to illegal immigration and coordinated diplomatic measures
vis-à-vis the countries of origin, particularly countries on the Mediterranean coast of
Africa, to persuade them to block illegal emigration or to accept back illegal immigrants
expelled from the Union. Secondly, the political programme of the Lega Nord, one of the
main ruling coalition parties, has historically focused on the fight against illegal
immigration as a key aspect of ensuring internal security. This is without doubt the main
38
area of agreement between the Lega and Berlusconi's other main ally, the Alleanza
Nazionale, which projects itself as the party of public order; and in fact the new
immigration law introduced by the present government bears the name of the leaders of
the two parties, Bossi and Fini. There are therefore convergent interests in the ruling
coalition which are encouraging Italy to focus on the Europeanisation of immigration and
asylum policies, with particular emphasis on the fight against illegal immigration.
The final major topic tackled by the Greco-Italian programme is probably the one likely
to receive most attention in the wake of recent international events. This is the question of
the European Union's external relations. In this case the main focus is firstly the
consolidation and strengthening of relations with the Balkan countries, Russia and the
Mediterranean region, and secondly the development of a defence and security policy
aimed at providing Europe with its own independent military capacity, but integrated into
NATO structures. In the days before and after the attack on Iraq prime minister
Berlusconi frequently returned to two subjects which are evidently close to his heart: the
creation of a European military force, primarily conceived as a support for American
military policy, and the desirability of enlarging the European Union to include Russia
which, above all, would make it possible to include Russian military strength in the
proposed European military force. There are, therefore, significant indications that this
last point in the Greco-Italian programme, European military policy and relations with
Russia, will assume priority during the Italian Presidency. These issues are closely linked
to what under normal conditions would have been the most important event of the Italian
Presidency, namely discussion of the draft constitutional treaty at the Intergovernmental
Conference.
2 – The aims of the Italian Presidency
The analysis of the programme document presented by Greece and Italy for 2003 is
certainly not enough to enable us to understand what will be the main aims of the Italian
Presidency, for two reasons. The first is that, leaving aside declarations of principle, it is
very likely that the attention of the Italian presidency will focus on areas of particular
interest to Italy itself, given that the six months' Presidency may help to direct the Union's
decisions towards the solutions which would be most welcome to the Italian government.
The second reason is that the changing international situation has overtaken the
background against which the Greco-Italian programme was planned. This will probably
have a profound influence on the priorities and time scales for achieving the objectives
set out in the programme, and particular attention may well be paid to other subjects
which were either little highlighted or left out entirely.
39
What is certain is that the review of pension and employment policies, the issue of goods
and energy transport infrastructure, and immigration policy all have considerable
importance for the internal situation in Italy, its economy and the prospects for the ruling
coalition to consolidate its own position, gaining consensus and, above all, room to
manoeuvre to acquire or recover financial resources and electoral approval. A fresh and
restrictive approach to European immigration policy would strengthen the Italian ruling
coalition, because it would enable it to implement more effectively one of the main
expectations of the electorate, i.e. a policy for fighting illegal immigration and controlling
the immigrants who are generally blamed for the rise in illegal activities and petty crime
which have become endemic in Italy during the last decade. These expectations derive
directly from the programmes and electoral promises of the Lega and the Alleanza
Nazionale. In the same way, the framing of a European model for pensions policy would
enable the government to use the external constraint method once again to introduce that
reform of the social security system which is greatly desired by the government coalition
but which aroused such opposition in 1994 that it contributed to the fall of the first
Berlusconi government. A favourable approach to transport policy and infrastructure at
the European level would enable the Berlusconi government to sustain the policy of
public works on which it has based part of its electoral campaign. Further, the transport
infrastructure policy is of great concern in industrial circles because of its obvious impact
on the competitiveness of Italian industry.
3 – Italian action during the Presidency: some hypotheses
Formulating a well-founded hypothesis about what the Italian Presidency may do is
certainly a very risky exercise, but it is also the main expectation of readers of this paper
We shall therefore try to set out what actions might reasonably be expected of the Italian
Presidency, based on some elements which may give us some indications, and on a
number of hypotheses. These elements are the experience of previous occasions on which
Italy has held the Presidency, the most recent statements from main government
spokesmen, and the background to the internal and international relations of the European
Union and its Member States, a background which, however, is constantly changing.
Among the hypotheses, the most important are the assumption that the Italian
government's behaviour in Europe will be predominantly influenced by the interests of
the country, that aspects of internal politics will play an important part in setting
priorities, and that the needs of the ruling coalition will carry significant weight in
directing the actions of the Italian Presidency.
In the recent past the Italian Presidency has always been characterised by the priority aim
of implementing and then directing the process of European monetary union. During the
Presidencies of 1985 and 1990, the Italians, backed by France and Germany, supported
40
the decision-making process which led to Maastricht, and clashed in a rather striking
fashion with the United Kingdom, particularly with Prime Minister Thatcher who was
opposed to monetary union. In 1985 the then prime minister Bettino Craxi took the
initiative of calling a majority vote to convene the Intergovernmental Conference
proposed by Kohl which subsequently laid the foundations for the Single Act and the
subsequent developments in the economic integration process. Again in 1990 Thatcher
found herself completely isolated by Andreotti's initiative which made it possible to set
the start of the second phase of monetary union for January 1994 and to call the
Intergovernmental Conference which later produced the Maastricht Treaty. 20
In 1996,
however, the attention of the Italian Presidency focused mainly on the process of entry
into monetary union, and particularly the admission rules which seemed likely to exclude
Italy.21
The most recent statement by major government figures, and by prime minister
Berlusconi in particular, seem to identify the strengthening of the relationship between
Europe and the United States and the involvement of Russia in the enlargement process
as the fundamental aspects of the Italian policy towards Europe, and this is probably the
area in which the Presidency will most concentrate its efforts during the second half of
2003. It might therefore be supposed that the issue of external relations and the European
Union's joint defence policy will replace or take equal prominence with the question of
institutional reforms, linked to the conclusion of the European Convention, on which it
will be very difficult to make any significant progress in view of the marked differences
of opinion which have recently emerged between Member States in the European Union.
We may therefore imagine an Italian Presidency mainly committed to rebuilding internal
relations within the Union with a pro-American bias, and which will either accept a
slowdown in the momentum towards constitutional reforms or attempt to exploit the
concurrent crisis in relations between France and the United Kingdom, backed up by the
United Kingdom and Spain. Berlusconi's emphasis on joint European defence and
relations with Russia seems indeed to be extraneous, or at least marginal, to the complex
of Italian or coalition interests. A suspicious mind might think that so much attention has
been suggested by others with the obvious aim of diluting French influence in the
European Union by introducing a new major partner - such as Russia - which would thus
be definitively linked to the West, creating the conditions for a rapid economic recovery
via the mutual trade in Russian energy and Western manufactured goods. The possibility
of Russian membership of the European Union (or even the mere prospect of its inclusion
within a reasonable time) would draw Moscow closer to the American and British
position on geopolitical alignment in some areas which are crucial for the stabilisation of
the world order. The possible establishment of a European army would enable the
20
V. Dyson – Featherstone, The Road to Maastricht, op. cit.;. Ginsborg, L’Italia del tempo presente., op.cit.
21
V. Luigi Vittorio Ferraris, “Il Semestre italiano di Presidenza dell’Unione Europea” in La comunità
internazionale, vol. LI, n.2, 1996 pp. 179-215
41
Americans to rely on those military forces for which they appear to have a desperate need
in order to act on more than one front simultaneously at sustainable cost to US taxpayers.
Whereas today the military support of European allies depends on internal political
considerations and the constraints of different national constitutions, since the military
forces concerned are national armies, any European force would have greater freedom of
action and, above all, would answer to European institutions in which pro-American
elements were numerically better represented.
For its part the Berlusconi government, faced with the problem of Italian marginalisation
by the Franco-German axis, may have developed an Atlantic European policy which
would enable Italy to assume a constructive role in Europe, not as an ally of France and
Germany as happened in 1985 and 1990, but by aligning itself with the United Kingdom
and Spain in pursuit of a policy supported externally by the United States and profiting
from the delicate international situation to regain a role and the initiative in European
politics. The prospects for success for this policy will depend a good deal on the events of
the next few weeks, and at the moment it would be most hazardous to make any further
predictions about so uncertain a future.
42
V - CONCLUSIONS
The forthcoming Italian Presidency of the European Union seems destined to be one of
the stormiest periods in the history of the Union, and a critical moment for the future of
the European integration process. In this context, the plans and programmes formulated
just a few months ago are rapidly becoming obsolete and being overtaken by events.
Today it seems very unlikely that the bitter confrontations and divisions which opened up
in Europe when the Iraq war broke out can be overcome quickly enough to allow the
drafting and approval of the European constitutional treaty which should have been the
key event in the six months of the Italian Presidency. So demanding a step in such an
unstable situation could result in forcing the pace of integration in a way which would be
unacceptable for some Member States or, more probably, in eviscerating the treaty in
such a way as to rob it of significance and reduce it to a mere statement of general
principles.
Against this background, the attitude of the Italian government to the war and its obvious
stance in favour of the Anglo-American policy, in opposition to the views of other major
Member States such as France and Germany, introduces yet another element of friction
which will probable slow down the process of institutional reform just in order to prevent
the Italian government from taking the opportunity of the Presidency to direct the
integration process in directions which would not be welcomed by some Member States.
Further, the fact that the Berlusconi government has taken so decisive a position, scarcely
appropriate when the mediating powers of the European Presidency are critically
important, may make some Member States reluctant to grant the current Italian leadership
the prestige would it would enjoy if a historic treaty founding a united Europe were to be
signed in Italy.
Berlusconi appears to be depending a good deal on international prestige to dispel
thoughts of the shadows which loom over his government and him personally at home
because of the very embarrassing legal proceedings which are now close to reaching their
uncertain conclusion. An Atlantic policy, however, seems more likely than a proEuropean
position to satisfy the current government's need for international prestige
because Europe has always been a cause supported by the political adversaries of
Berlusconi and his government. Relations with President Ciampi, a convinced European
and possible mentor of the government during the Presidency, also seem to be in crisis
after recent differences of opinion regarding the Italian position on the Iraq war and
President Ciampi's reluctance to swallow legislative reforms which seem rather designed
to resolve Berlusconi's legal difficulties than to modernise the Italian judicial system.
There is thus the risk that both the sole mediating influence between government and
opposition positions on Europe and the link between the Italian government and
European institutions will be alienated. For while it is true that the Italians are very well
43
represented in Europe, with Prodi heading the Commission and Amato as Vice-President
of the Convention, it is also true that relations between Prodi and Amato on the one hand
and Berlusconi on the other are not good. The fact that the Italian Presidency of the
Union and the Commission and Vice-Presidency of the Convention have come at the
same time - which under other circumstances could have fostered cooperation and the
achievement of objectives of critical importance to the Union - seems instead likely to
transfer to the European stage the frosty atmosphere and climate of hatred which exists in
Italy between the Berlusconi government and the centre-left coalition with which Prodi
and Amato identify themselves, not least with a view to the forthcoming elections.
Finally, Berlusconi appears as skilful in imposing his own particular style of government
in an atypical country like Italy as he is inexpert and clumsy in international affairs,
where he does not seem to enjoy sufficient authority and prestige to persuade other
Member States to accept the major compromises necessary in difficult circumstances and
at times of pivotal change. The combination of difficult circumstances (because of the
differences over Iraq), pivotal changes (the European Convention) and the weakness of
Berlusconi's leadership is therefore likely to paralyse the Union and worsen the existing
problems.
44
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47
WEB SITES CONSULTED
http://www.alleanzanazionale.it
http://www.cdu.it
http://www.comunisti-italiani.it
http://www.democraziaeuropea.it
http://www.dsonline.it
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http://www.msifiammatric.it
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http://www.european-convention.eu.int
http://www.eu2003.it
48
Statistical Appendix
Table 1. Changes in public administration spending (billion lire)
Year Total
expenditure
Including interest
payments
% of GDP
1981 214 795 28 583 46.3
1982 264 100 38 857 48.4
1983 316 973 47 320 50.0
1984 363 898 58 113 50.1
1985 416 915 65 069 51.4
1986 460 922 76 370 51.2
1987 498 575 76 197 50.7
1988 554 682 86 550 50.9
1989 617 624 104 404 51.8
1990 705 253 124 143 53.8
1991 769 487 144 978 53.9
1992 842 547 172 622 56.1
1993 896 373 187 800 57.8
1994 898 962 179 927 54.9
1995 950 164 205 991 53.2
1996 1 006 120 218 701 52.9
1997 1 008 019 186 086 50.7
1998 1 023 797 166 541 49.3
1999 1 038 964 144 899 48.4
2000 1 047 311 145 733 46.4
2001 1 113 001 149 308 47.2
SOURCE: CENSIS, Rapporto sulla situazione sociale del paese, Milano, Franco Angeli, 1999, p.580 and
2002, p.582
49
Table 2. Calculation of public debt (billion lire)
Current values Constant values (Lire 1995) % GDP
1990 1 284 403 1 631 608 97.2
1991 1 448 956 1 711 022 100.6
1992 1 633 900 1 845 514 107.7
1993 1 846 453 2 006 769 118.1
1994 2 047 247 2 150 145 123.8
1995 2 212 746 2 212 746 123.8
1996 2 333 964 2 216 841 122.7
1997 2 388 743 2 215 956 120.2
1998 2.417.374 2 183 325 116.4
1999 2 458 276 2 183 440 114.5
2000 2 493 127 2 167 853 110.5
2001 2 576 605 2 183 367 109.4
SOURCE: CENSIS, Rapporto sulla situazione sociale del paese, Milano, Franco Angeli, 2000, p.506 and
2002, p.518
50
Table 3. Summary of the distribution of seats in the 2001 elections
Chamber of
Deputies
Senate
Seats % Seats %
Casa delle libertà 368 58.4 176 55.9
Ulivo 247 39.2 128 40.6
Rifondazione
Comunista
11 1.7 4 1.3
Di Pietro List 0.0 1 0.3
Democrazia Europea 0.0 2 0.6
Pannella-Bonino List 0.0 0.0
Fiamma Tricolore 0,0 0,0
Others 4 0.6 4 1.3
TOTAL 630 100 315 100
SOURCE: Compiled by Roberto D'Alimonte – Stefano Bartolini (ed.), Maggioritario finalmente? La
transizione elettorale 1994-2001, Bologna, Il Mulino, 2002, p.200, 394-6.
51
Table 4. Results of the 2001 elections, majority votes and seats
Chamber of Deputies Senate
Votes % Seats % Votes % Seats %
Casa delle libertà 16 918 020 45 282 59 14 381 007 43 152 66
Ulivo 16 315 355 44 189 40 13 260 249 39 77 33
Rifondazione Comunista 0 1 705 733 5 0
Di Pietro List 1 496 110 4 1 138 553 3 0
Democrazia Europea 1 314 950 4 1 144 200 3 0
Pannella-Bonino List 462 863 1 676 472 2 0
Fiamma Tricolore 141 298 0 339 911 1 0
Others 635 494 2 4 1 1 172 618 3 3 1
TOTAL 37 284 090 100 475 100 33 818 743 100 232 100
SOURCE: Roberto D’Alimonte – Stefano Bartolini (a cura di), Maggioritario finalmente? La transizione elettorale 1994-2001, Bologna, Il Mulino, 2002, p.200.
52
Table 5. Results of the 2001 elections, proportional votes and seats
Chamber of Deputies Senate
Votes % Seats % Seats %
Forza Italia 10 923 146 29.4 62 40.0 0.0
Alleanza Nazionale 4 459 397 12.0 24 15.5 0.0
CCD-CDU 1 193 643 3.2 0.0 0.0
Nuovo Partito socialista it. 352 853 1.0 0.0 0.0
Lega Nord 1 461 854 3.9 0.0 0.0
Casa delle libertà total 18 390 893 49.6 86 55.5 24 28.9
Democratici di Sinistra 6 147 624 16.6 31 20.0 0.0
Margherita 5 386 950 14.5 27 17.4 0,0
Girasole 804 488 2.2 0.0 0.0
Partito dei Comunisti
Italiani
619 912 1.7 0.0 0.0
Ulivo Total 12 958 974 34.9 58 37.4 51 61.4
Rifondazione Comunista 1 868 113 5.0 11 7.1 4 4.8
Di Pietro List 1 443 271 3.9 0.0 1 1.2
Democrazia Europea 887 037 2 4 0.0 2 2.4
Pannella-Bonino List 831 199 2.2 0.0 0.0
Fiamma Tricolore 142 894 0.4 0.0 0.0
Others 578 443 1.6 0.0 1 1.2
Total 37 100 824 100 155 100 83 100
Source: Roberto D’Alimonte – Stefano Bartolini (ed.), Maggioritario finalmente? , cit. pp.394-6.
PREVIOUSLY PUBLISHED “EUROPEAN ISSUES”
(The more recent are available on the website of Notre Europe:
http://www.notre-europe.asso.fr/Publications.htm#Etudes)
• European attitudes towards transatlantic relations 2000-2003: an analytical survey (Anand
Menon and Jonathan Lipkin)
Available in French and English (june 2003).
• Large and small member states in the European Union: reinventing the balance (Paul
Magnette and Kalypso Nicolaïdis)
Available in French and English (May 2003).
• Enlargement and Investment in Central and Eastern Europe (Bérénice Picciotto)
Available in French and English (May 2003)
• The institutional architecture of the European Union: a third Franco-German way? (Renaud
Dehousse, Andreas Maurer, Jean Nestor, Jean-Louis Quermonne and Joachim Schild)
Available in French and English (April 2003).
• A new mechanism of enhanced co-operation for the Enlarged Union (Eric Philippart)
Available in French and English (March 2003).
• Greece, the European Union and 2003 Presidency (George Pagoulatos)
Available in French and English (December 2002).
• The question of the European government (Jean-Louis Quermonne)
Available in French and English (November 2002).
• The European Council (Philippe de Schoutheete and Helen Wallace)
Available in French and English (September 2002).
• Multilevel government in three Eastern and Central European candidates countries:
Hungary, Poland and Czech Republic (1990-2001) (Michal Illner)
Available in French and English (June 2002).
• The Domestic basis of Spanish European Policy and the 2002 Presidency (Carlos Closa)
Available in French, English and Spanish (December 2001)
• The Convention of a Charter of Fundamental Rights: a method for the future?
(Florence Deloche-Gaudez).
Available in French and English (December 2001).
• The federal approach to the European Union or the quest for an unprecedente European
federalism (Dusan Sidjanski).
Available in French, English and German (July 2001).
• The Belgian Presidency 2001 (Lieven de Winter and Huri Türsan).
Available in French and English (June 2001).
• The European debate in Sweden (Olof Petersson).
Available in French, English and Swedish (December 2000).
• An enlargement unlike the others ... Study of the specific features of the candidate countries
of Central and Eastern Europe (Franciszek Draus).
Available in French, English and German (November 2000).
• The French and Europe: the state of the European debate at the beginning of the French
presidency (Jean-Louis Arnaud).
Available in French, English and German (July 2000).
• Portugal 2000: the European way (Alvaro de Vasconcelos)
Available in French, English and Portuguese (January 2000).
• The Finnish debate on the European Union (Esa Stenberg)
Available in French, English and Finnish (August1999).
• The American Federal Reserve System: functioning and accountability (Axel Krause)
Available in French, English and German (April 1999).
• Making EMU work (partnership Notre Europe and Centro European Ricerche).
Available in French, English, Italian and German (March 1999).
• The intellectual debate in Britain on the European Union (Stephen George).
Available in French, English and German (October 1998).
• Britain and the new European agenda (Centre for European Reform, Lionel Barber)
Available in French, English and German (April 1998).
• Social Europe, history and current state of play (Jean-Louis Arnaud)
Available in French and English (July 1997).
• Reinforced cooperation: placebo rather than panacea (Françoise de la Serre and Helen
Wallace)
Available in French, English and German (September 1997).
• The growth deficit and unemployment: the cost of non-cooperation (Pierre-Alain Muet).
Available in French, English and German (April 1997).
Bulletin of Italian Politics
Vol. 2, No. 2, 2010, 3-19
Bulletin of Italian Politics
ISNN: 1759-3077
Italy and the Global Economic Crisis
Roberto Di Quirico
University of Cagliari
Abstract: Global crisis in Italy has impacted on a system that had deteriorated after twenty
years of political instability and economic decline. Since 2000 coalitions of both the Right
and Left have been in office in Italy and neither has proved capable of solving Italy’s
problems. When the global economic crisis hit the country, Berlusconi’s government
confronted it in two main ways: supporting banks and big firms, and cutting public
expenditure. This policy had also been recognised as the correct one by the Opposition but
the way in which the Government put it into practice was contested – mainly on grounds
of a lack of transparency, inefficiency and inequity. The global crisis has also shaped the
political balance in Italy. The Lega Nord’s predominance in the Government and the
evident shift in Government policy towards the Lega’s aims, have created political space for
internal and external opposition to Berlusconi’s coalition.
Keywords: Italy, economic crisis, Berlusconi, Italian government
The global economic crisis has without doubt been the most important
international event of the last three years and it will profoundly shape the
future of the European Union as well as that of the EU’s member states.
Each of them has been affected in different ways and is confronting the
crisis with policies that vary according to their domestic circumstances. The
impact of the crisis on EU member states has come about in two phases.
Initially, it endangered the stability of banking systems. In that phase the
impact and reactions of EU governments depended on the structure and
the sizes of the national or international banks they hosted. In general,
governments supported or saved banks by granting them liquidity.
However, for certain banks the scale of the financial crisis was so huge that
it has required more detailed intervention on the part of governments.
Banking systems responded to the crisis with traditional solutions, namely
credit restrictions and increases in liquidity, mainly on the part of national
central banks and governments. National governments needed funds to
support banks and to offset the fall in tax revenues induced by the growing
economic crisis – which triggered the second phase of the crisis. In fact,
bankruptcies, cuts in banking credit, huge losses in the financial markets,
growing budget deficits which drew funds from the capital market, and
R. Di Quirico
4
other outcomes of the financial crisis dramatically reduced economic
activity, bringing company closures and job losses.
Notwithstanding the transmission mechanisms of the financial crisis
and the fact that its initial impact was similar to that of the 1930s, there are
at least two specific characteristics of the current crisis that have
dramatically increased its impact on states. First, during the 1930s the main
victims of the crisis were banks and firms. Secondly, governments did not
intervene in the economy during the early phases of the financial collapse.
In contrast, in the recent financial crisis, governments immediately
supported banks to avoid collapse of the whole economy. However, this
policy moved the risks associated with bankruptcy from banks to
governments. This is one of the main characteristics of the global crisis.
As happened in the 1930s, the crisis has not been confined to the
economic field. Its impact on politics and society is as relevant as its impact
on the economy; and of course, its implications for nation states have
depended on the specifics of their domestic situations. In this article, we
will discuss the impact on Italy and its possible outcomes – outcomes that
will shape Italian politics for the foreseeable future. Attention will be
focused mainly on politics and society, although we will often refer to the
economy to explain political and social developments.
Italy before the crisis
In 2008, when Prodi’s government collapsed and Berlusconi and the Right
regained power in Italy (Pasquino, 2008; idem, 2009b), the global crisis was
just kicking in. This led the Berlusconi-led coalition to offer an election
manifesto inspired by principles of austerity and financial stability, which
was unusual for a coalition that had previously supported expansion and
very expensive infrastructural projects such as the road bridge between
Calabria and Sicily.
The main supporter of Berlusconi’s ‘New Deal’ was the minister for
the economy, Giulio Tremonti. The economic policy of the Right thus
contrasted with that of previous Berlusconi governments (Vassallo, 2007).
In fact, an Italian peculiarity since the 1990s is that the Left has supported
financial stability and reductions in public debt and the budget deficit,
while the Right has not hesitated to increase public debt and the budget
deficit in order to support spending or to mask the problem of tax evasion.
In other words, Left and Right in Italy have adopted economic policies that
are the opposite of those of traditional European parties of the Left and
Right.
The reasons for Berlusconi’s and Tremonti’s New Deal have to do
with political opportunism. The developing financial crisis of 2008 crushed
hopes of economic growth in subsequent years. So, an election manifesto
based on expansive economic policies was not credible. The change in the
Italy and the Global Economic Crisis
5
Right’s economic policy was also influenced by such political
considerations as the growth in electoral support for the Northern League
and its pivotal position in the construction of parliamentary majorities.
During the first decade of the new millennium coalitions of both the
Right and the Left held office in Italy, and none proved capable of solving
the country’s economic problems. Growth and, most important, long-term
growth prospects remained limited. Employment policies based on
expansion in the proportion of temporary positions resulted in low wages
and restrictions of the rights of workers, mainly the younger ones. This
reduced long-term family investment in houses, and savings, and
discouraged marriage and child-bearing.1 In the meantime, the quality of
educational provision, from the primary through to the university sectors,
worsened because of budget cuts, unsuccessful reforms, and a decline in
the minimum standards required of students; while the devolution of
certain welfare services induced regional governors, aiming for re-election,
to cut, fully or in part, prescription charges and citizens’ contributions to
the costs of hospital treatment and other health services. Thus the costs of
public welfare provision increased.2
The devolution of health services to regions was part of a general
process of devolution started by the Left in the late 1990s and continued by
the Right from 2001 under pressure from the League. This process shifted
the management of crucial services such as hospital and health assistance
to a level of government that is closer to citizens and thus more sensitive to
electoral pressures and short-term considerations. The result was an
increase in the costs of public administration and larger qualitative and
quantitative disparities between northern and southern regions. The former
are richer and so they have larger tax bases and are able to offer more
services to their citizens. Until the crisis, disparities were compensated in
part by state fund transfers but this policy is now under revision. In fact
one of the main political aims of the League is the introduction of so-called
fiscal federalism. This means transferring to regions not only power over
specific policy areas, but also control of the fiscal resources collected within
their administrative boundaries. In other words, fiscal federalism implies a
reduction of fund transfers to the central state, a process that reduces the
latter’s ability to redistribute funds to poorer regions from the richer ones.
So, regionalism in Italy risks dividing the state instead of reforming it.
Electoral power explains the influence of the League on the economic
policy of Berlusconi and Tremonti. Both of the previous Berlusconi
governments had problems of stability because of conflict among the
parties belonging to the ruling coalition. However, as the Prodi
government collapsed in 2008, Berlusconi succeeded in merging his party
(Forza Italia) with the National Alliance (Alleanza Nazionale, AN) the
party of his main ally, Gianfranco Fini. A new party called the People of
Freedom (Popolo della libertà, PdL) emerged, led by Berlusconi. Due to the
R. Di Quirico
6
defection of the Catholic Union of the Centre (Unione di Centro, UDC) the
new coalition of the Right for the 2008 election was composed of the PdL
and the League (Pasquino, 2008; idem 2009b). By contrast, the previous
coalition led by Prodi disbanded and its main components ran separately.
This was a consequence of the creation of the Democratic Party (Partito
Democratico, PD), a new formation bringing together parties of the Left but
excluding the more radical members of the Prodi coalition, while claiming
for itself a position as the leading party of the Left (Pasquino, 2009a).
The 2008 national elections were a tremendous success for the Right,
which gained the largest parliamentary majority in twenty years. 3
However, this success consolidated the League’s pivotal role in the
coalition. It greatly empowered Tremonti, the main link between the
League and the PdL. Moreover, Berlusconi’s judicial problems increased
his dependency on the League – thanks to his need for its support to
approve laws designed to ‘protect’ him from the judges.4 Also, it was
evident that within the coalition of the Right electoral support for the
League was growing and that survival of the coalition in the long term
would be increasingly dependent on it.
Economic impact of the crisis
The Lehman Brothers collapse in September 2008 revealed the seriousness
of the crisis and it represents the starting point of the economic emergency
for Italy. Until then, during the early phases of the financial collapse, Italian
banks and investors had suffered little. The problems of the American
housing market had not affected Italy. Italian financial institutions did not
own a large quantity of sub-prime bonds. There were problems with
derivatives stipulated in Italy by some of the larger banks with local
administrations that faced bankruptcy when the crisis arrived, but the state
imposed a solution on the banks.
The Lehman Brothers collapse initiated the most dramatic phase of
the crisis by bringing about a contraction in the interbank loan market.
Banks refused to lend money to each other because of a lack of liquidity
and uncertainty about the financial soundness of borrowers. The liquidity
crisis induced governments to support national banks with loans, and the
European Central Bank cut the discount rate. However, banks reduced the
availability of credit to clients to regain liquidity. This was the phase in
which the Italian economy joined the international crisis. In Italy there are a
few large banks and many small and medium-sized banks operating on a
regional scale. The crisis touched the larger banks, which lost funds as a
result of the Lehman Brothers crash, or found their assets devalued by the
stock-market collapse. However, Italian banks were not very heavily
involved in highly speculative sectors. The main problem for Italian banks,
apart from the reduction in liquidity, came from links with Central and
Italy and the Global Economic Crisis
7
Eastern European countries. In fact, from the 1990s some Italian banks, and
in particular Unicredit, had extended their network of branches and
affiliated banks to the then candidate countries, now members, of the
European Union, and to Ukraine. There was a risk of the collapse or
illiquidity of this part of the network. So Unicredit shares lost value
because there were doubts about its financial solidity. However, the
support of the Government enabled a banking crisis to be avoided.5
Small and medium-sized banks instead reacted to the liquidity crisis
by reducing credit to clients and consumers and raising the amount of
collateral required for new loans. This policy reduced investment in
machinery and houses and threatened the viability of small and mediumsized
firms in various sectors, in particular the more obsolete or exportoriented
of them. Moreover, credit restrictions and pessimistic outlooks
deterred consumers from spending. So, sectors such as real estate, housebuilding
and cars collapsed.6 Industries reacted in various ways. First, they
reduced profit margins and costs. Second, they reduced the number of fulltime,
permanent jobs on offer. While growing unemployment mainly
affected young and low-paid workers, dismissal of higher-paid permanent
staff was rare (Bugamelli et al., 2009: 20), at least in large and medium-sized
firms. Larger firms internalised part or almost all of the production process.
In this way they passed some of their problems on to sub-contractors.
Finally, larger firms delayed payments to their suppliers and negotiated
lower prices. In this way too therefore, did medium and small-sized firms
bear the costs of the crisis (Bugamelli et al., 2009: 7).
Of course, the economic crisis also involved public finance. The
reduction in economic activity cut the amount of tax collected, and anticrisis
policies increased expenditure. This resulted in dramatic increases in
the budget deficit and public debt.7 Also, the reduction in GDP increased
the ratios of debt and deficit to GDP, which meant breaching the
parameters of the Growth and Stability Pact stipulated as part of European
Monetary Union.8 As a consequence, Italy is today in excess of the Pact’s
parameters and risks triggering the excessive deficit procedure of the EU
Commission.
Reducing debt and the deficit is difficult for various reasons. Some of
them are obvious, like the reduction in tax receipts or the costs of anti-crisis
measures and are common to other EU member states; others are
specifically Italian. One of the latter is the difficulty in controlling the
spending of local administrations and independent bodies such as
universities. Local administrations in Italy are structurally predisposed to
financial instability. In fact, their duties and their financial resources are
dependent on central-government decisions and national legislation.
Changes in both of them often create serious financial stress and shortages
of money for local administrations because new duties are not always
matched by new funds. Moreover, some wage increases of local
R. Di Quirico
8
administrative staff are automatic. On the other hand, some local taxes
have remained unchanged for a long time. This is a long-standing problem
for the budgets of local authorities, and the abolition of such important
taxes as the local property tax (Imposta Comunale sugli Immobili, ICI) has
worsened the problem.9 Past administrative shortcomings have required
government intervention so that funds have needed to be transferred from
the state budget to provide basic services which local administrations have,
thanks to their failures, been unable to provide themselves.10 In 1999 an
Internal Stability Pact was introduced in an attempt to bring local finance
under control,11 especially in sectors such as health services, which today
represent the largest item in the regions’ budgets. However, conflicts have
arisen between government and local administrations, mainly regions,
about the costs declared for basic health services and the southern regions’
capacities to acquire and use European funds (la Repubblica, 3 July 2010).
Universities and university reform are another chronic problem that
government has tried to solve since the start of the millennium. University
policy until the end of the 1990s dramatically increased the number of
professors and lecturers and, as a consequence, universities’ costs. In spite
of increases in the then very low fees paid by students, universities’
budgets worsened and risks of bankruptcy became real. Moreover,
automatic wage increases every two years and the low thresholds for career
advancement of many lecturers and professors made the budget more rigid
and difficult to cut.12
Government policies against the crisis
Berlusconi’s government dealt with the crisis in two main ways: supporting
banks and large firms, and cutting public spending. At first glance, this
kind of policy seems correct. Supporting banks avoided the domino effect
of their fall; support for large firms allowed them to retain their employees.
Cuts in public expenditure rather than tax increases avoided negative
impacts on investment and consumers’ expectations.
This policy had also been recognised as the correct one by the
Opposition. However, the way in which the Government put it into
practice is more questionable, and it was criticised for a lack of
transparency (support to banks), inefficiency (support to firms) and
inequity (cuts). In particular, cuts were not distributed among different
social groups but concentrated mainly on the public sector and the pay of
public employees.13 Also, cuts in the funding of public-sector agencies were
not accompanied by any real changes in their responsibilities or structures.
Government simply cut state transfers and payments, dismissing criticisms
of them with arguments which the Opposition claimed were ideological
and designed merely to justify reducing services and dismantling the
Italy and the Global Economic Crisis
9
public sector. In other words, Berlusconi’s government confronted the crisis
with a correct view of economic policy but without a correct strategy.
Regions, universities and public employees were the main victims of
the cuts and it is impossible to deny that ministers and newspapers fought
a long propaganda campaign against these sectors. Regions and public
administrations, particularly those in the South, were depicted as inefficient
and badly managed while public employees were portrayed as idlers. The
minister for the public administration, Renato Brunetta, initiated a
campaign to increase productivity and punish employees who failed to
perform their duties adequately or were guilty of indiscipline. Finally,
newspapers portrayed universities as centres of corruption, nepotism and
non-meritocratic career advancement. So, when the Government
announced cuts, restrictive policies and reforms in these sectors it relied on
the approbation of the majority of electors.
The criticisms of local administrations, public employees and
universities are not totally unfounded and some of the Government’s
reforms may as a result be useful. However, they have two limitations.
First, they do not consider the reasons for the existing situation. If they are
carried out, the lack of impact of government policy on the problems that
need solving should be evident. During the so-called First Republic and
later, the Italian government regarded public administration as a kind of
tool against unemployment and as an electoral reserve (Bull and Newell,
2006; Cotta and Verzichelli, 2007). Efficiency and meritocracy were
sacrificed to the creation of a large number of low-paid jobs, and assurances
that employees would not be fired. So, today the problem is not that public
employees do not work enough; the problem is that there are too many of
them. Second, the origin of the attacks is mainly political. People employed
in the public administration and universities vote mainly for the opposition
parties of the centre left. So, penalising them does not erode the electoral
base of Berlusconi’s government. Also, the image of public employees and
the public administration as corrupt, oppressive, inefficient and expensive
is the same as the one that has been asserted by the League since the early
phase of its rise. So, the ideological and political reasons for choosing the
sectors to bear the costs of budget cuts are evident. Berlusconi’s interests in
the financial sector are the explanation critics give for his lack of
transparency in the state’s support for banks. Berlusconi’s opposition to
rules to limit the financial operations of banks and financial intermediaries
carried on in the European Council and G8/G20 meetings increased
suspicions that he had personal interests in the matter. However, critics of
the ways in which governments have supported banks are common all
around the world. In Italy too critics have focused on the lack of new rules
against speculation, the huge bonus payments made to managers and the
non-repayable financial support that has been given to banks.
R. Di Quirico
10
Finally, Berlusconi’s industrial policy for combating the crisis
displays all the traditional limitations of Italian industrial policy. Italian
industry consists mainly of large numbers of small and medium-sized
enterprises (SMEs) and a few large firms such as Fiat. The post-war model
of Italian development was based on an export-oriented economy and the
autonomous ability of SMEs to create jobs and growth, while the state
supported larger firms with funds and other kinds of aid. Moreover, many
of the larger firms were controlled by the state through the Institute for
Industrial Reconstruction (Istituto per la Ricostruzione Industriale, IRI) or
the Ministry for State Shareholdings (Ministero delle Partecipazioni
Statali). 14 Both kinds of firm had a political function in providing a
reservoir of electoral and financial support to the ruling parties. This model
of development reached a crisis point approximately twenty years ago
when privatisation started and the financial needs of the state required
higher taxation of small firms. Also, many of these firms were obsolete or
involved in production in low-wage sectors.
The growth of foreign competition in Asian and East European
countries where wages were much lower than in Italy and where workers’
rights were absent destroyed the basis of the Italian growth model. Some
Italian firms transferred their production facilities to underdeveloped
countries; other firms closed, and some of the remaining ones decided to
modernise. Although governments of the early 1990s was conscious of the
unsustainability of the traditional model and of the need to move towards
high-tech production, the dramatic political crisis of the time and the near
bankruptcy of the Italian state blocked attempts to define a new model of
development.
Since then no government has been able to define such a model
either, and consequently growth rates have declined.15 In certain sectors
such as metallurgy or cheap textiles, the number of factories and employees
and the scale of production have fallen dramatically, while some of the
sectors identified since the 1960s as the drivers of growth (e.g. chemicals)
have been beset by crisis after crisis with many large firms such as Ilva,
Montedison and Parmalat losing their leading role in the Italian economy.
Today, there are almost no large firms in Italy apart from Fiat. Instead,
certain medium-sized firms, such as Ferrero, Iacuzzi and Ducati, have
gained an international reputation while certain smaller firms have gained
leading positions internationally in niche markets as the manufacturers of
machinery for very specific production processes. While they represent
examples of the definition of new models of development this has not been
sufficient to compensate for the unemployment and reduction in growth
caused by the crisis of the early 1990s and the absence of reform of Italy’s
industrial structure.
The current crisis will probably be an opportunity for defining a new
model of development in Italy. However, it is essential to solve some
Italy and the Global Economic Crisis
11
critical problems. One of them is the lack of any strong connection between
research and production. It is impossible to move towards a high-tech
economy without a solid background of knowledge and the potential to
apply research results to production. In Italy few industries fund university
research and few industries or institutions have their own research
sections. Usually, Italian firms drain technicians and administrators from
universities and train them in-house for their specific functions. However,
research is of poor quality in small and medium-sized firms, apart from
those already involved in high-tech production. Also, several Italian firms
work with foreign patents and rely on foreign research activities.
The distortions in the Italian university system, and the tradition of
Italian firms of seeking to offload costs onto the state, explain the situation
in part. However, the lack of laboratories and university infrastructures, the
inability of Italian universities to attract foreign researchers, poor
investments in R&D activities and the almost bankrupt position of many
universities, make the problem worse. Until the early 1990s the gap had
been compensated for by the high standard of scientists and technicians
produced by universities, but reforms in the late 1990s reduced this
standard, and new graduates are not as well educated as the older ones.
Berlusconi’s government is trying to reform the university system through
the so-called Gelmini Reform, which provides for the introduction of
meritocratic criteria for the funding of universities.16 The reform introduces
new forms of governance and evaluation of research and teaching. A small
part of state finance to universities will depend on the results of this
evaluation. In the meantime, professors’ and researchers’ salaries will be
more closely tied to their performance and automatic pay increases will be
limited. Unfortunately some aspects of the reforms such as the absence of
more investment, and their timing, suggest that their main goal is simply
cutting the costs of public institutions.
Other problems are the costs of politics, and relations between
enterprises and the public administration. Italian administrative structures
suffer from a superimposition of levels of governance due to the
incomplete substitution of provinces by regions in the late 1970s. Provinces
continue to exist and this adds to administrative and employment costs and
the costs of elections. The Italian parliament, thanks to a so-called
redundant bicameralism giving Chamber and Senate the same functions
(Cotta and Verzichelli, 2007) is in a similar situation. Proposals for
abolishing the provinces have been blocked by the League which controls
many provincial administrations in Northern Italy. A proposal to reduce
dramatically the number of deputies and senators has not been carried
through. All these costs fall on the state budget and sustain high taxation
while reducing the funds available for investment. Red tape creates for
firms and entrepreneurs large numbers of administrative obligations many
of which are very expensive in terms of time and the fees of legal and
R. Di Quirico
12
administrative consultants. Many of the attempts to speed up the
bureaucratic procedures associated with the creation of new companies
have been unsuccessful – though the attempts are almost useless anyway if
other bureaucratic procedures and restrictions continue to obstruct
company operations. Last but not least, corruption and clientelism have
quickly reappeared since the late 1990s and have distorted competition.
Besides, complex bureaucratic procedures create opportunities for
extortion by public officials at the expense of entrepreneurs.
Finally, an essential requirement for the reorganisation of small and
medium-sized enterprises and their shift to high-tech production is a move
away from owner supervision to the supervision of skilled managers. Italy
is paying the costs of its initial model of growth. Many SMEs are too small
or under-capitalised to compete and produce efficiently. If not managed by
the children of their founders, they continue to be managed by their
founders – who were able to establish and consolidate the firms at a time
when hard-working entrepreneurs were able to manage businesses
notwithstanding their poor education. However, they do not have the skills
for managing the transition to medium and large-sized industries or to
high-tech production; and personal management obstructs company
mergers because of the resistance of founders who fear being marginalised
or excluded in the process.
Reorganising the SME sector could be the basis for starting a new
phase of development and for increasing employment. However, such
reorganisation requires a well-planned and efficient industrial policy which
governments hitherto have never had.
Berlusconi’s government declared that it would pursue various
objectives to address some of the problems described above. However it is
has performed poorly in this area. Institutional and administrative reforms
have been delayed and obstructed by opposition within the ruling
coalition; and agreement on specific reforms with the opposition parties
has been made impossible by these parties’ lack of trust of Berlusconi.
Reform of universities and the public administration seems mainly to have
been oriented towards cutting costs rather than supporting efficiency and
innovation; and there has been no innovation in government industrial
policy.17 Finally, the Government has devoted so much time to legislation
designed to protect specific interests (mainly Berlusconi’s) that it has had
little attention or time left to devote to initiating structural reforms.18
Social and political impact of the crisis and government policies
Both economic turmoil and government policies have shaped the reaction
of Italian society to the crisis. This reaction has influenced social behaviour
as well as electoral choices.
Italy and the Global Economic Crisis
13
Job losses have obviously been the most significant social impact of
the crisis. The unemployment rate remained almost stable during the initial
period of the downturn but increased dramatically in 2009, with further
increases expected in 2010 (see Table 1). In the meantime, inactivity rates
have increased, probably because of discouragement, and the disincentives
on the long-term unemployed to search for jobs. Although unemployment
in Italy is concentrated in the South, the reduction in employment has
mainly affected the northern regions (ISTAT, 2010b: 101). Moreover, the
rise in unemployment has been concentrated in certain categories (younger
people) in specific sectors (hotels, restaurants, construction, certain
industrial sectors) in specific types of employment (involving consultancy
and short-term contracts)19 and among small-scale entrepreneurs (smallbusiness
owners, craftsmen and the self-employed). In the latter case, small
entrepreneurs employing fewer than ten workers have often dismissed
some or all of them and continued their activity alone (ISTAT, 2010b: 111).
Finally, the crisis has caused a rise in part-time employment accepted by
workers seeking to keep their jobs despite falls in production (ISTAT,
2010b: 114).
Table 1: Main economic indicators
2006 2007 2008 2009
GDP1 1,429 1,485 1,544 1,572
Deficit4 49,403 23,191 42,575 80,800
Public debt3 1,559 1,590 1,644 1,729
Deficit/GDP (%) 3.6 1.5 2.7 5.3
Debt/GDP (%) 106.5 103.5 106.1 115.8
Industrial Production2 100.5 105.2 107.4 86.3
Notes: 1. Billions of euros; 2. January data; index numbers; 2005=100;
3. End of the year; billions of euros; 4 End of the year; millions of euros
Sources: www.istat.it/grafici_ra/crisi/pilue.html; www.istat.it/grafici_ra/crisi/
produzioneindustriale.html; www.istat.it/dati/catalogo/20100315_00/; ISTAT
(2010), Contabilità nazionale: Conti economici nazionali 1970-2008; Eurostat (2010), News
Release Euroindicators, 55, http://ec.europa.eu/ eurosta/euroindicators; Banca
d’Italia, Base informativa pubblica, http://bip.bancaditalia.it/4972unix/homebipita
.htm (all the web sources accessed 1 September 2010).
Poor employment prospects and prospects of future insecurity have
increased the marginalisation of certain social groups such as young people
in search of jobs or career opportunities. Young people are the main victims
of the rise in unemployment, which has increased continuously since 2007
(see Table 2). In fact, a large number of short-term workers and
collaborators, i.e. the categories most affected by the crisis, are young. They
R. Di Quirico
14
are also the main component contributing to the rise in the inactivity rate.20
We must also bear in mind that the category of active people includes
students, who are also of course mainly young. The crisis has dramatically
worsened their prospects of finding employment once they graduate.
Prospects have also worsened for those who have already graduated.
Table 2: Rates of unemployment (%)
Year Total1 Annual
variation
Juvanile2 Annual
variation
2004 7.9 23.7
2005 7.6 -0.3 23.6 -0.1
2006 6.2 -1.4 20.0 -3.6
2007 6.7 0.3 21.1 1.1
2008 6.8 0.1 22.8 1.7
2009 8.5 1.7 26.9 4.3
20103 8.7 0.2 29.2 2.3
Notes: 1. Figures for December; 2. 15–24 years old; 3. Figures for May
(provisional)
Sources: ISTAT, www.istat.it/salastampa/comunicati/in_calendario/occprov/
2010 0702_00/ (accessed 1 September 2010)
This is an outcome of the crisis only in part. The reduction in teaching
quality, mainly at universities, and the illusion that economic growth can
be supported by increasing the number of graduates, has induced
governments, in the last ten to fifteen years, to ‘dumb down’ instruction
and lower the standard of graduates. This, through the simplification of
exams, has resulted in grade inflation so that young graduates in Italy
today have fewer critical capacities and fewer skills, but higher grades,
than older graduates. However, many employers have stopped considering
final grades as reliable indicators of personal qualities and find it difficult
to choose among first-level graduates coming onto the labour market. So,
the most brilliant students have fewer job opportunities; many first-level
graduates continue their studies simply in order to gain more prestigious
qualifications, and many graduates find themselves in jobs for which they
are over-qualified. The result is discouragement and disappointment for
young people with a reduction, in the last few years, in enrolment in
universities.
Notwithstanding the concentration of unemployment among
younger workers, older workers have not been unaffected by the crisis. In
fact, if most of them have permanent positions, the threat of closure of their
Italy and the Global Economic Crisis
15
factories leaves them facing the possibility of being driven back into a
labour market where their prospects of competing are poor. Well-qualified
managers and white collar workers, if older than 40, have extreme
difficulty in finding alternative jobs.
Immigration and high birth rates among immigrants have reduced
the demographic impact of the crisis. Unfortunately, the large number of
legal and illegal immigrants in Italy has accentuated, among native Italians,
the traditional growth of xenophobia that takes place in times of crisis.
Rising unemployment and the Government’s inability to develop
new policies to tackle it, apart from the traditional industrial subsidies
aimed at keeping employees in work, have also shaped the development of
negotiations between employers and trade unions. Fiat, the main car
producer in Italy, recently promised to move production of a new model
from Poland to Pomigliano d’Arco, but asked the trade unions to agree to
changes in the rules governing workers’ obligations and strikes. The main
trade union in the car sector (FIOM/CGIL) opposed the request, fearful
that accepting the proposed new terms of employment could open the door
to a redefinition of labour relations generally in Italy.
Fiat and the trade union which accepted the car maker’s proposal
invited workers to participate in a referendum on the matter, but Fiat
insisted that the vote in favour would have to be overwhelming if it were to
keep its promise. Only 63 percent of workers voted in favour of the
agreement and this represented an unsatisfactory result as far as Fiat was
concerned. 21 The firm’s decision to move production from low-wage
countries like Poland to higher wage areas like Italy apparently seems
economically irrational. However, Fiat relies on the support of the Italian
government to keep people in work in the high-unemployment area of
Pomigliano, and more stringent contractual conditions may be sufficient to
cover the gap between staff costs in Poland and in Italy. So, the principal
ingredients of industrial strategy seem the same as those of fifty years ago:
low wages; limited rights for workers; state subsidies.
Global crisis has also shaped the political balance in Italy. High levels
of criminality attributed to immigrants; accusations that the central
administration is corrupt and inefficient; high levels of taxation: all these
have contributed to a growth in electoral support for the League. On the
other hand, the League’s prominent role in government and the evident
shift in government priorities towards policies the League champions
create political space for internal and external opposition to Berlusconi’s
coalition.
This seems the case with Fini, Berlusconi’s main ally until a year ago.
After the 2008 elections he became president of the Chamber of Deputies
and started to criticise Berlusconi and his government, mainly for its
policies on justice. It seems that Fini, frequently described as the natural
successor to Berlusconi, was intolerant of Berlusconi’s prominence in the
R. Di Quirico
16
new party into which Fini had driven the party he led (the National
Alliance). On the other hand, the electoral base of AN was located in
southern Italy so Fini could not accept dismantling of the central state of
the kind the League was seeking to achieve. The emergence, within the
PdL, of a faction led by Fini (Futuro e libertà), and the subsequent split, has
undermined the stability of Berlusconi’s government and immeasurably
increased its dependence on the support of the League. Consequently, the
crisis has empowered the League and weakened Berlusconi’s government
at the same time.
Conclusion: global crisis in Italy, a lost opportunity?
In Italy, the global crisis has impacted on a system that had deteriorated
following twenty years of political instability and economic decline. So, it
has only worsened conditions in a country already in crisis. The
circumstances responsible for Italy’s decline and the avoidance of structural
reforms have also prevented attempts to use the global crisis as a stimulus
for rescuing the country and reforming the system. These circumstances are
the long-term effects of the early 1990s collapse; of widespread corruption
(which blocks the application of meritocratic criteria and adds to business
costs); the absence of any new project for economic growth, and, more
generally, the lack of a governing class able to spearhead thoroughgoing
reform.
Berlusconi is part of the problem, not the whole problem. His
leadership is almost exhausted, and sexual scandals and long-standing
judicial problems make him a problem for his own party. His ambition to
create a hegemonic party, as the Christian Democrats had been in the past,
has failed and has resulted in a continuation of Italy’s decline instead of the
‘new Italian miracle’ he promised in the early years of his political career.
Moreover, the electoral coalition that gave him victory in 1994, 2001 and
2008 has disintegrated. It was based on a twin alliance with the League in
the North and AN in the South. The irreconcilable differences in the
interests of the electoral bases of the two allies made it difficult to balance
their influence but gave Berlusconi a pivotal role in the coalition. The
League’s growing influence in government undermined southern-based
parties and factions, such as Fini’s, or the Movimento per le Autonomie, a
small party influential in Sicily.
Unfortunately, the opposition parties seem unable to offer a potential
alternative government of high calibre or a new project for Italy, either.
Conflicts within the largest of the opposition parties (the PD) and the
decline in its voting support; irreconcilable policy differences between the
PD and the parties of the radical Left; the lack of innovative political and
economic ideas: all these render the Opposition weak, severely
undermining its capacity to compete with Berlusconi. The current
Italy and the Global Economic Crisis
17
government may therefore fall as a result of an internal collapse, but it
seems unlikely that it would in that case be replaced by any worthwhile
alternative.
In conclusion, therefore, the global crisis will almost certainly turn
out to have been a lost opportunity for Italy to reverse its economic and
political decline.
Notes
1 Marriages declined almost constantly from the 1970s and the trend has
continued since 2000, declining especially sharply between 2000 and 2004. The
proportion of marriages involving a foreign partner increased constantly during
the period from 2004 to 2008 (see ISTAT,
http://demo.istat.it/altridati/matrimoni/). Births of Italian children declined
almost constantly after 2000 while foreign childbirths (declared) in Italy increased
from 20,339 to 72,472 amounting to 94 percent of the total increase in births in Italy
during the period from 1999 to 2008 (see
http://demo.istat.it/altridati/IscrittiNascita/index.html). All web sources
accessed 1 September 2010.
2 Public health expenditure increased from €66,543 million to €106,505
million during the period 2000 to 2008 (see www.istat.it/sanita/sociosan/,
accessed 1 September 2010).
3 The coalition of the Right (PdL and Lega) won 344 seats of the 630 seats in
the Chamber of Deputies and 174 seats of the 315 in the Senate.
4 The Government proposed at least two ad personam laws designed to
enable Berlusconi to solve his judicial problems. The first was the so-called Lodo
Alfano proposed by the minister of justice, Angelino Alfano. The law granted
immunity from prosecution to people in prominent positions, such as the President
of the Republic and the Prime Minister himself. This law was then declared invalid
by the Constitutional Court. Another attempt to help Berlusconi was the so-called
legittimo impedimento (legitimate impediment). This law allows prominent
politicians (mainly ministers and the Prime Minister) under investigation to delay
court appearances if they clash with official commitments. In this way trials are
drawn out and thus more likely to have to be abandoned thanks to the statute of
limitations.
5 The Government responded to the risk of banking crisis by introducing law
no. 190 of 4 December 2008, and law no. 2 of 28 January 2009. These provided that
the Government would guarantee bank deposits to a maximum of €103,000 in the
event of a bankruptcy and that it would assure the payment of banks’ debts.
6 Bugamelli, Cristadoro and Zevi (2009: 11) estimate that in the period from
January 2008 to June 2009 production fell by more than 35 percent in sectors such
as electrical machinery, metallurgy, and cars.
7 During the period from 31 December 2006 to 31 December 2009 Italian
public debt increased from €1,559 billion to €1729 billion. In the same period the
deficit rose from approximately €49 billion to €81 billion (see Banca d’Italia, Base
informativa publica).
R. Di Quirico
18
8 In 2009 the ratio of the budget deficit to GDP was 5.3 percent rather than
the 3 percent maximum provided for by the Stability and Growth Pact. The debtto-GDP
ratio increased dramatically from 106.1 percent in 2008 to 115.8 percent in
2009 (Eurostat, News Release Euroindicators, 55 (2010),
http://ec.europa.eu/eurostat/euroindicators (accessed 1 September 2010)).
9 ICI (Imposta comunale sugli immobili) is a tax paid by householders to
their municipalities. The tax was introduced in 1992 and partially abolished in 2008.
10 This was the case of Catania’s city administration and Campania’s
regional administration – where the Government had to intervene to deal with an
emergency in the waste collection service when the local administration proved
financially and logistically incapable of fulfilling their duties.
11 Article 28, law no. 448, 1998.
12 During the period from 1997 to 2008, the numbers of academic staff in
Italian universities grew from 49,187 to 62,768. In 2009 the number fell by
approximately 2,000 due to the retirement of full professors. In 2009 there were
17,880 full professors, 17,567 associate professors (senior lecturers) and 25,435
lecturers (data from the Ministero dell’istruzione, università e ricerca). This is an
abnormal distribution of academic positions, with an unusually large proportion of
full professors.
13 After debate in Parliament and protest by diplomats and judges, cuts were
rescinded for all but academics.
14 IRI (Institute for Industrial Reconstruction), established in 1933, and the
Ministero per le partecipazioni statali (Ministry for State Shareholdings),
established in 1956, were the main institutions managing the processes of state
intervention in the Italian economy. The Ministero per le partecipazioni statali was
abolished in 1993; IRI ceased to exist in 2002.
15 In 2002, 2003 and 2005 Italy’s GDP growth was lower than 0.3 percent.
16 Maria Stella Gelmini is the minister for education, universities and
research.
17 Following Minister Scaiola’s resignation in May 2010 Berlusconi added to
his duties as Prime Minister, those of minister for economic development ad
interim. This reduced dramatically the efficiency effectiveness of the ministry’s
operations.
18 From May to July 2010 political debate was monopolised by the so-called
legge bavaglio (gagging law) which proposed limits on what newspapers were
allowed to publish about the contents of police telephonic interceptions. This
problem affects various members of the Berlusconi government (and some
members of previous governments) whose telephone conversations, including
discussion of sexual and other personal affairs, had been intercepted.
19 63 percent of the total rise in unemployment is accounted for by job losses
among collaborators and temporary employees (see ISTAT, 2010b: 107).
20 In particular the rise in inactivity includes those under 30 who live with
their parents (ISTAT, 2010b: 121).
21 In late July 2010, Fiat announced its intention to abandon its investment
plans for Pomigliano d’Arco in favour of new plants in Serbia. It also created a new
company, the Fabbrica Italia Pomigliano, and separated the Pomigliano factory
from its Fiat Group Automobili. The new firm will not be a member of the Italian
association of industrialists (Confindustria), which means that labour contracts will
Italy and the Global Economic Crisis
19
be not regulated by the national contracts for mechanical workers. Fiat too plans to
leave the association (la repubblica.it, 29 July 2010) .
References
Bugamelli, M., Cristadoro, R. and Zevi, G. (2009), La crisi internazionale e il
sistema produttivo italiano:un’analisi su dati a livello di impresa,
Occasional Papers 58, Rome: Banca d'Italia.
Bull, M. and Newell J. (2006), Italian Politics: Adjustment Under Duress,
Hoboken (USA): John Wiley & Sons.
Cotta, M. and Verzichelli, L. (2007), Political institutions in Italy, Oxford:
Oxford University Press.
Eurostat (2010), News Release Euroindicators, 55, http://epp.eurostat.
ec.europa.eu/portal/page/portal/publications/collections/news_rel
eases (accessed 1 September 2010).
ISTAT (2010a), Contabilità nazionale - Conti economici nazionali 1970-2008,
Rome: ISTAT.
ISTAT (2010b), Rapporto annuale 2009, Rome: ISTAT.
Pasquino, G. (2008), ‘The 2008 Italian national elections: Berlusconi's third
victory’, South European Society & Politics, 13 (3), pp. 345–62.
Pasquino, G. (2009a), ‘The Democratic Party and the restructuring of the
Italian party system’, Journal of Modern Italian Studies, 14 (1), pp. 21–
30.
Pasquino, G. (2009b), ‘The formation of the fourth Berlusconi government’,
in J.L. Newell (ed.), The Italian General Election of 2008, London:
Palgrave.
Vassallo, S. (2007), ‘Government under Berlusconi: The functioning of the
core institutions in Italy’, West European Politics, 30 (4), pp. 692–710.
1
Italy and the Eurozone Crisis
Abstract
In 2008–13 Italy suffered a double crisis of long-term economic decline and shortterm
credibility, amplified by the international situation that endangered the
stability of the whole Eurozone. Italian public debt and bonds were the pivotal
elements of the Italian crisis and the crucial connection between it and the
Eurozone crisis. Thanks to the ECB action, the Italian crisis was contained but not
resolved.
The international financial crisis that started in the USA with the fall of Lehman
Brothers touched Europe and the EU through banking channels. Many European
banks were involved in the derivatives business and at risk of collapse. Meanwhile,
in some countries, a housing bubble similar to the American one put at risk the
stability of all financial institutes, including those not involved in the derivatives
market. So, the international crisis manifested itself in the EU in the first phase in
which the banking and financial sector was the most endangered. In fact, the
troubles that arrived from the USA were worsened by the transformation in the
inter-EU financial relations generated during the 2000s due to the Economic and
Monetary Union and the introduction of the euro. Interconnections between the EU
national financial systems and money transfer from Central European countries
(mainly Germany) to peripheral countries (primarily the Mediterranean ones)
increased dramatically during the 2000s and made the system more subject to
liquidity crisis. So, when the international crisis arrived, the whole system was
affected independently by the involvement of national financial entities in the
derivatives market and the housing bubble.
European governments had clearly in their minds the lesson of the 1930s crisis
and supported their banks with public money. However, some countries had a
fragile budgetary equilibrium that came to be in danger under the pressure of the
public support of the banking system and the reduction of fiscal entries. This
situation was more problematic in those countries with high public debt. So, doubts
about the sustainability of some EU countries’ public debts emerged, particularly
when Greece was revealed to be close to default. This generated a new phase of the
EU crisis sometimes called Sovereign Debt Crisis as part of a more general
Eurozone Crisis.
The Greek crisis dismantled the basic assumption that boosted the
Europeanization of the national financial markets in the 2000s when investors and
banks considered the risk of default almost non-existent in the Eurozone countries,
and the bonds of Eurozone countries almost trustable as the German ones. So, a
limited premium in the interest paid on non-German bonds was sufficient to attract
investors. The Greek crisis revealed that this assumption was not valid and that
bonds issued by highly indebted countries were much more exposed to default than
2
expected. The EU was then ready to enter the second phase of the international
crisis, those in which governments that saved their banks from bankruptcy became
themselves at risk of default. This possibility was more evident for a group of
countries originally denominated PIGS (Portugal, Ireland, Greece, Spain). Italy
joined the club quickly, and the potential impact of an Italian default made the
country the core of the mounting Eurozone crisis.
Italy was the third largest economy in the Eurozone and its public debt was the
largest one in a nominal term in the area. So, an eventual default or just the
collapse of Italian bond prices was not simple to manage either for the EU
institutions or for other member states who were involved in its rescue. Moreover,
the Italian economy suffered a decline that had started decades earlier and was
exacerbated by the national currency’s abandonment of joining the euro. Finally,
the rise in power of the Berlusconi government undermined Italy’s credibility on
the main financial markets. The government was internationally discredited by
Berlusconi’s style of government and the long list of scandals and judicial
procedure against him when the new government entered in charge. The previous
Berlusconi governments were remembered as Eurosceptic and poorly compliant
with the EMU rules and duties, particularly fiscal and budgetary aspects. So,
skepticism arose on international financial markets about the capability of the new
Italian government to solve the Italian problems and reduce public debt as required
by the EU. Doubts emerged about the sustainability of Italian public debt in the
long term. Summarizing, Italy suffered a double crisis of long-term economic
decline and short-term credibility amplified by the international situation, which
endangered the stability of the whole Eurozone.
During the initial phase of the Eurozone crisis, when banks were mainly
affected, Italy benefited from the marginal position of its leading banks in the
Eurozone financial system. Italian banks’ involvement in the derivatives business
was limited, and their main problems regarded liquidity reduction and the affiliated
banks in Central-Eastern Europe. However, the most dangerous menace to Italian
banks’ stability came from their portfolios and the considerable quantity of Italian
government bonds contained therein.
The composition of Italian banks portfolios was not surprising. Government
bonds were considered the surest investments because of the supposed
impossibility of an EMU member state default. So, they were a very convenient
tool for gaining interest in reserves and short-term funds. Besides, many clients of
the Italian banks invested their savings in government bonds. So, banks managed
bonds for their clients and acted as intermediaries between clients and the
secondary markets. However, the relevance of Italian bonds in banks’ portfolios
made their balance sheets and liquidity strictly dependent on the bond price on the
secondary market.
Consequently, a fall in Italian bonds price on the secondary market could
endanger banks’ liquidity and their reliability as debtor in the inter-banks’ capital
market. So, depreciations of Italian bonds could embitter the credit crunch still at
work in Italy because of the liquidity reduction caused by the American crisis.
Finally, during the 2000s, non-Italian banks in the Eurozone (mainly the French
ones) invested in Italian bonds because of the attractive interest rates and
accumulated substantial amounts of Italian bonds in their portfolios.1
So, French
and German banks were affected when doubts emerged about the sustainability of
3
Italian public debt and the Italian bonds’ prices declined on the secondary market.
The problems of Italy endangered the stability of the whole European financial
system.
The primary signal of the falling trust for Italian bonds was the spread on the
secondary market between the prices of Italian 10-year bonds and their German
equivalent. The spread enlargement demonstrated a diverging attitude of the
investors toward the Italian and German bonds. German bonds were considered
safer and more reliable. So, the amplification of the spread indicated the continuous
reduction of trust in Italian bonds and fed further depreciation of them on the
market.2
This amplified the difficulties of Italian banks and, consequently, those of
the Italian firms in finding credits (both at home and abroad) at a price that did not
reduce their competitiveness. At the same time, the Italian budget was endangered
by a double challenge. The tax collection decreased because of the economic crisis,
while the government had to pay more to support the banking system. When
increasing public debt became difficult due to the Eurozone crisis and the reduced
affordability of Italian bonds, a complex budgetary and balance of payment crisis
emerged in Italy due to the joining of pre-crisis weaknesses of the Italian economy
and the new financial problems that arose.
Italian public debt and bonds were the pivotal elements of the Italian crisis and
the crucial connection between it and the Eurozone crisis. Reducing public debt
and regaining credibility was a difficult job. In spite of the resignation of the
Berlusconi government in November 2011 and the call to former EU commissioner
Mario Monti to create a new government, there was a lack of trust in Italian bonds
and in the possibility of recovery. Also, public debt reduction was not a credible
option in the middle of a crisis. In fact, it appeared evident that a reduction in
public spending could generate a negative multiplier that would reduce tax
revenues more than public debt. So, acting on bonds prices and allocation was the
only strategy that could enable results. This was the strategy adopted by the
European Central Bank in the early phase of the Eurozone crisis, resulting in a
partially hidden renationalization of Italian public debt.3
The ECB action to save the Eurozone (and Italy in particular) was based on
collecting bonds on the secondary market. The fall of their prices was partly due to
the needs of investors to regain liquidity and partly to doubts about Italy’s ability to
pay its debts. Collecting bonds on the secondary market ensured that they were still
sellable and avoided a run to dismiss them from investors’ portfolios. The evidence
that the ECB supported the Italian bonds markets also reassured non-Italian
investors about the saleability of these bonds. The combined effect of collection
and reassurance finally permitted the Italian bond prices to stabilize. However, this
was feasible only by freezing bonds in “friendly” portfolios. Initially, the ECB
granted funds to non-ECB financial actors to do it, in particular to Italian banks
that were financed to renationalize bonds of their government. Later, the European
Stability Mechanism (ESM) was created to help EMU members purchase their
bonds.4
Finally, the launch of the ECB Quantitative Easing program permitted the
ECB to accumulate government bonds of the EMU member states, buying them on
the secondary market.
The European Central Bank also permitted neutralization of the mounting
balance of payments crisis that Italy was suffering due to the retirement of shortterm
loans and investments mainly by German investors. The crucial instrument
4
the ECB used for sterilizing hot-money outflows was the TARGET2 system.5
This
system permitted the balancing of debts and credits the European Monetary Union
members had with the ECB. Since 2011 enormous amount of money had
accumulated in the TARGET2 balances representing a massive retirement of funds
from Italy and Spain and an equivalent return of funds into German accounts.
However, the official creditor of Italy was the ECB, while the German creditors of
the ECB maintained the balances on the TARGET2 system granted by the ECB.
So, credits retired by non-Italian investors from Italian banks and firms became
credits toward the ECB for the foreign investors and debts with the ECB for the
Italians.
The combined action of bonds purchases and debt sterilization in the TARGET2
system allowed a crisis to be kept under control that risked destroying the whole
EMU. However, these solutions were temporary, while solving the crisis required a
more incisive arrangement. Again, it was the ECB action that was to be crucial in
containing the Italian crisis. The “whatever it takes” speech by Mario Draghi
revealed the adamant determination of the ECB governor to defend the EMU and
stop the Eurozone crisis. Then, the core of the problem remained: to keep the
Italian bonds market stable, to contain the spread, and to ensure that Italian banks
remained solvent. This was possible thanks to the Quantitative Easing program. At
the same time, the TARGET2 system continued to act as a buffer for funds
retirement from Italy.6
Thanks to the ECB action, the Italian crisis was contained but not resolved.
Italian debtor balances in the TARGET2 system continued to grow for years, and
the spread never returned to the pre-crisis minimum. Besides, the governments that
followed Berlusconi’s could not solve the structural problems that curbed the
Italian economy’s competitiveness and were the main reason for the Italian
crisis. In particular, the obsolescence of Italian production, the technological gap,
and the fragility of the Italian banking system continued to prevent the Italian
economy from being competitive. At the same time, public debt remained very
high and the fiscal policies adopted to reduce it were poorly effective and mainly
centered on cuts to the expenses instead of reforms and reorganization of the
budget as required by the European Commission.
SUGGESTED READINGS
About the unbalances and the pre-crisis problems of Italian economy, an important
explanation comes from S. Blavoukos and G. Pagoulatos G., “The Limits of EMU
Conditionality: Fiscal Adjustment in Southern Europe,” Journal of Public Policy
28, no. 2 (2008): 229–253; R. Di Quirico (2010), “Italy and the Global Economic
Crisis,” Bulletin of Italian Politics 2, no. 2 (2010): 3–19.
A general picture of the Eurozone crisis, its causes, and the transmission
mechanisms toward Southern European countries comes from R. Di Quirico,
Europe Apart. History and Politics of European Monetary Integration (Firenze:
European Press Academic Publishing, 2020).
More specific analysis of the Italian situation, the Italian structural problems
before the 2008 crisis, and the nature of Italy’s involvement in the Eurozone crisis,
can be found in J. Hopkin, “A Slow Fuse: Italy and the EU Debt Crisis,” The
International Spectator: Italian Journal of International Affairs 47, no. 4 (2012):
35–48; E. Jones, “Italy’s Sovereign Debt Crisis,” Survival 54, no. 1 (2012): 83–
5
110; L.S. Talani, The Political Economy of Italy in the Euro: Between Credibility
and Competitiveness (London: Palgrave Macmillan UK, 2017).
A crucial study about the financial mechanisms of instability transmission in the
Eurozone is M. Minenna et al., The Incomplete Currency: The Future of Euro and
Solutions for the Eurozone (Chichester: John Wiley & Sons Ltd, 2016). Here, the
Italian case is studied in detail, and crucial information is given about the ECB
strategy to face the Italian crisis.
Other relevant data about the financial flows that characterized the Eurozone
crisis are in A. Hobza and S. Zeugner, “The ‘Imbalanced Balance’ and Its
Unravelling: Current Accounts and Bilateral Financial Flows in the Eurozone,”
Economic Papers 520 (July 2014), Brussels: European Commission.
Finally, the spread issue and data about the timing of the Italian sovereign debt
crisis can be found in E. Zoli, Italian Sovereign Spreads: Their Determinants and
Pass-through to Bank Funding Costs and Lending Conditions, IMF Working Paper
(2013).
1
Referring to the Bank of International Settlements, the New York Times in May 2010
estimated Italian debts toward France as 511 billion US dollars while the debt toward
Germany was 190 billion US dollars (New York Times, “Europe’s Web of debts”, May 1,
2010). Probably a large part of the French assets were government bonds, while the
German credits were short-term funds and commercial credits.
2
The spread between the 10-year Italian bonds and the equivalent German bonds was
usually lower than 100 points before the 2008 crisis. Later it increased but remained under
200 points until June 2011, when it skyrocketed to more than 500 points due to the
dramatic situation that culminated with the resignment of Berlusconi’s government. See
Zoli (2013).
3
On the renationalization of Italian public debt, see Minenna et al. (2016), 142–150.
4
The European Stability Mechanism (ESM) was decided in 2011 and created with a Treaty
in early 2012. It is a financial entity funded by the ECB. Among its functions is collecting
public bonds of the EMU member states on the secondary market.
5
The Trans-European Automated Real-Time Gross Settlement Express Transfer System 2
(TARGET2) is the system used by the ECB and the national central banks to manage the
intra-EU money transfer.
6
Italy’s TARGET2 balances moved from a credit of 3.4 billion euros at the end of 2010 to
a debt of 191 billion euros at the end of 2011 and remained between 200 and 250 billion
euros during 2012–15. Later Italy’s debtor balances almost doubled to 491 billion euros in
2018. This demonstrates that the Italian structural crisis was not resolved by the end of the
Eurozone crisis. See ECB Statistical Data Warehouse.
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Contemporary Italian Politics
ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/rita20
Challenging the Euro: The politics of anti-Euro
parties in Italy during the first Conte government
Roberto Di Quirico
To cite this article: Roberto Di Quirico (2020): Challenging the Euro: The politics of antiEuro
parties in Italy during the first Conte government, Contemporary Italian Politics, DOI:
10.1080/23248823.2020.1793073
To link to this article: https://doi.org/10.1080/23248823.2020.1793073
Published online: 24 Jul 2020.
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ARTICLE
Challenging the Euro: The politics of anti-Euro parties in Italy
during the first Conte government
Roberto Di Quirico
Department of Mechanical, Chemical and Materials Engineering, University of Cagliari, Cagliari, Italy
ABSTRACT
The first Conte government, which led Italy from 2018 until early
September 2019, was the first government in the EU to express
a negative attitude to the Euro. Both parties that formed the
government (the Lega and the Movimento 5 Stelle) opposed the
Eurozone and the common currency and repeatedly proposed to
take Italy out of the Euro or at least to consult Italian citizens about
this possibility. Although anti-Euro proposals disappeared from the
Government’s programme, EU institutions and the financial markets
perceived a concrete risk of Italexit. The fear of Italexit and the
confrontational approach to the EU institutions adopted by the new
government generated financial tension and a rise in the spread on
Italian government bonds, thereby contributing to internal conflict
within the Italian government and its final collapse. This article
analyses the rise of anti-Euro sentiments in Italy, their role in shaping
the European policy of the first Conte government, and the
reasons for the changing attitudes of the Movimento 5 Stelle to the
Euro and Italexit during its period in office. This article also demonstrates
the relevance of external constraints and the prudent but
firm negotiation style adopted by the EU Commission to frustrate
the ambitions of radical anti-Euro campaigners. Finally, the article
considers the implications the Italian experience will have in the
event that other anti-Euro governments take office in Italy or in
other Eurozone member states, in particular in those countries
where support for anti-Euro parties is growing quickly.
KEYWORDS
Euro; political parties;
european Union; populism;
euroscepticism
Introduction
The Eurozone crisis facilitated the rise of new parties or a drastic transformation of old
minority parties, which adapted their electoral programmes to the new policy issues, the
crisis having proved crucial for many electors. These issues, the policies proposed by
these new or reformed parties, and the communication strategies they adopted to
promote their proposals, influenced the terms that scholars used to identify them.
Categories such as ‘anti-system’, ‘populist’ and ‘sovereigntist’ were used to describe
these parties. None of these categories covers the whole set of new parties, even though
the general label ‘populist’ is widely used to distinguish them from the traditional (or
mainstream) parties that have ruled the EU countries up to the present time.
CONTACT Roberto Di Quirico diquirico@unica.it Via Marengo, 3 09123 Cagliari (Italy)
CONTEMPORARY ITALIAN POLITICS
https://doi.org/10.1080/23248823.2020.1793073
© 2020 The Founding Editors, Contemporary Italian Politics
While the populist label derives from the ideological and communicative schemes
adopted by the parties, other definitions stress the core political attitudes or the main
political proposals advanced by them. The anti-system label emphasizes the declared
aims of certain parties to remove from office mainstream parties and overhaul their styles
of government. Sovereigntism, instead, is a self-assigned definition of certain parties,
mainly originating from former right and far-right parties, which identify renationalization
of politics as the means to solve the many problems they attribute to
the supra-nationalization of European politics (De Spiegeleire, Skinner, and Sweijs 2017;
Basile and Mazzoleni 2020).
The relevance of these new parties has increased quickly, and some of them have
gained power in certain Eurozone countries such as Greece, Spain and Italy, while in
other countries they have become the main opponents of the governments in power, as
has happened in France and Germany.
This article focuses on those new parties in the Eurozone that share a declared hostility
towards the Euro. This specific attitude is particularly relevant for European politics and
the Eurozone’s internal equilibria. In fact, the rise in power of anti-Euro parties in
Eurozone countries could shape these countries’ European policies and generate systemic
risks for the whole European architecture. This is the case in Italy, where a coalition of
two anti-Euro parties – the Movimento 5 Stelle (Five-star Movement, M5 s) and the Lega
(League) – formed a government in 2018 that made opposition to the Eurozone rules an
essential element of its political programme and a crucial communicative topic in the
search for popular support. This coalition collapsed in September 2019 when the M5 s
formed a new government with the Partito Democratico (Democratic Party, PD) and
Liberi e Uguali (Free and Equal, LeU), while the League became the main opposition
party. Then, the M5 s adopted a pro-European position while the League maintained its
anti-European attitude, mainly centred on opposition to the Euro.
This article presents the initial results of a broader research project on anti-Euro
parties in the Eurozone and their influence on the EU and the member states’ European
policies. Because of this research perspective, parties have been studied here in an
unconventional way, at least when compared with traditional studies of party politics.
Such elements as party organization and the characteristics of the parties’ electors have
only a marginal role here with the main focus being on the construction, communication
and application of an ideological framework centred on the Euro and its consequences.
What matters here is not the electoral impact and performance of anti-Euro parties in
Italy, but their impact on Italian politics and on the troubled relationship with the EU
institutions that resulted from the assumption of power by the M5 s–League government.
Analysis of the M5 s–League government is crucial to understanding how anti-Euro
parties, when in power, influence the European policy of a Eurozone member country
and the reactions of both EU institutions and other Eurozone members to that country.
During the last few years, many books and articles have been published on the rise and
transformation of both the M5 s and the League (Gualmini and Corbetta 2013; Lanzone
and Woods 2015; Passarelli and Tuorto 2018; Bordignon and Ceccarini 2013; Biorcio and
Natale 2013). However, almost all these works focus on the rise, electoral results or
internal organization of these parties. Insufficient attention has yet been paid to the
impact of anti-Euro attitudes on Italy’s European policy during the M5 s-League government.
Yet that experience is a significant example of what happens when an anti-Euro
2 R. DI QUIRICO
government gains power in a Eurozone member state, something that has so far only
happened in Italy.
The international crisis and the politicization of the Euro
Europe is witnessing a surge in populism as a consequence of both widespread popular
discontent with mainstream political parties and economic crisis. Demand-side explanations
for the rise of populism abound (Kriesi 2014; Inglehart and Norris 2016). However,
it has been widely argued that economic crises facilitate populism (Kriesi and Pappas
2015; Stavrakakis 2014; Morlino and Raniolo 2017). Such events have ‘catalysing effects’
that intensify long-standing problems. Such are the long-term trends of increasing
economic inequality and social exclusion that have accompanied technological displacement;
profound changes in the world of work and welfare, and the adoption of neoliberal
economic policies. Peripheral and disparate anti-establishment actors have recently
received sizable electoral support in some Eurozone countries. In Italy, the M5 s and
the League won the 2018 elections and came together to form a government (D’Alimonte
2019). In France, growing support for the Rassemblement National (National Rally, RN)
resulted in Marie Le Pen coming second in the 2017 Presidential election, while in Spain,
the new party Podemos was for a while the most popular party in the country (Ivaldi,
Lanzone, and Woods 2017). In Greece, SYRIZA gained power in January 2015 and kept it
until the 2019 elections (Spourdalakis 2014; Stravakakis and Katsambekis 2014). In
Austria, the migrant emergency and the refugee crisis favoured the far-right
Freiheitliche Partei Österreichs (Freedom Party of Austria, FPÖ) (Heinisch 2016;
Moreau 2018), while in Germany the success of Alternative für Deutschland
(Alternative for Germany, AfD) is changing the national political framework (Grimm
2015; Reher 2017). In Finland, too, similar parties are gaining support (Hattaka, 2017).
Almost all the parties cited above are usually classified as populist parties and analysed
according to schemes developed to study these kinds of parties. The populist label is
probably misleading in describing so many different parties and in understanding their
policy choices. This label derives mainly from the communication style and rhetoric
adopted by these parties but barely covers their policy proposals and their attitudes
towards specific issues. The Euro is one of these issues and an example of the different
and sometimes conflicting views that characterize the various parties simplistically
labelled as populist. In fact, not all populist parties share anti-Euro attitudes. In some
relevant cases like Podemos and SYRIZA, critical attitudes towards the EU have not
evolved into anti-Euro positions. Consequently, in this article we will disregard the
widespread tendency to study the M5 s and the League as populist parties and will
focus instead on other specific aspects of their political programme, namely their antisystem
attitudes and hostility to the Euro.
Since the early 2000s, discontent arising from the consequences of the introduction of
the Euro has fed anti-EU forces.1
Thus, the Euro became one of the preferred targets in
their political discourse and electoral programmes (Serricchio, Tsakatika, and Quaglia
2013; Hobolt and Wratil 2015). Many of these forces share hostile attitudes to the
common currency and propose (sometimes vehemently) to leave the Eurozone.
Therefore, a common target, the Euro, and a shared hostility to the EU institutions
CONTEMPORARY ITALIAN POLITICS 3
have become the trait d’union among a varied group of political actors including the
League in Italy, the RN in France and AfD in Germany.
The politicization of such a technical issue as the Euro and its impact on Eurozone
countries’ national policies is due to many factors. One of these is the pivotal role of the
Eurozone rules in frustrating demands for radical change in the economic policies of the
most troubled countries. Parties that gained support because of the economic crisis
needed to offer their supporters an economic programme capable of solving the main
problems they face – problems like growing unemployment, welfare cuts, rising taxation
and, more generally, the consequences of austerity policies. The solutions offered by these
parties have not been as innovative as their proponents believe. They mainly support
deficit-spending policies to create jobs and infrastructure and to pay subsidies to unemployed
persons and firms. Unfortunately, these measures collide with Eurozone rules and
mechanisms and this has made the Euro the main obstacle to the economic policy
proposals presented by these new parties. Therefore, abandonment of the Euro has
become a crucial policy issue in the attempt to make their economic programmes appear
credible and feasible.
Moreover, the Euro represents the most important result of European integration in
the last thirty years. It is therefore understandable that it has become the preferred target
of anti-EU forces, most of them located on the right and far right of the political
spectrum. Right-wing and far-right parties, traditionally hostile to European integration
and the supra-nationalization of politics, have used the Euro from the beginning as an
example of how European pervasiveness in domestic policies has acted against ‘the will of
the people’ and the ‘nation’. In the meantime, far-left parties have seen in the Euro crucial
evidence of the neo-liberal nature of European integration and an example of the
financial capitalism they fiercely oppose (Calossi 2016). These parties have thus developed
anti-Euro attitudes similar to those of the far-right parties, in spite of their
diametrically opposed political positions.
Finally, the patterns of diffusion and the ideological nature of anti-Euro attitudes are
crucial to understanding their success. Widespread hostility to the Euro has been
facilitated by the new and central role of individuals and social media in elaborating
and transmitting the anti-Euro message (Aalberg et al. 2016) and creating an anti-Euro
ideology. Social media communication and ideology construction are the primary
connectors between new technologies, hostility to the Euro and the changing hierarchy
of political participation in which individual and distant participation have gained
relevance. The rise of new modes of political participation, communication, socialization
and the autonomous collection of information have changed the traditional
pattern of ideology building. It has marginalized the party as a channel for the
transmission of political proposals. Thus, mental processes of logical systems construction
and concept re-elaboration, as well as how external stimuli (speeches, scientific
theories, and media messages) are perceived, determine in part the political behaviour
of politically active Web users. The Euro represents a perfect link that could easily
connect the unsatisfactory economic situation that frustrates anti-system parties’ supporters
and the construction of an ideological framework capable of justifying the
parties’ policy proposals.
4 R. DI QUIRICO
Hostility to the Euro in Italy and its ideologists
The ideological self-construction process emerges clearly from our case study of the antiEuro
parties. In fact, anti-Euro arguments need specific knowledge of monetary economics,
international political economy and EU law that those hostile to the Euro for the most
part lack. Thus, they search the Web for the necessary knowledge, information and
literature, which they adapt to their mental and cultural outlooks and use this information
(in many cases fake news or misleading explanations) to rationalize their political
reasoning. On the Web, they have found websites and blogs created by activists and
opinion leaders that offer their readers a simple and (apparently) coherent theoretical
framework to justify their anti-Euro attitudes.
Economists voiced criticism of the introduction of the Euro and warned of the perils of
a common currency for so many different countries applying for Eurozone membership, in
the 1990 s. Thus, cultural hostility to the Euro already existed before the introduction of the
currency and was influential in countries like Italy with a long tradition of extremist parties
inherited from the Fascist period and widespread support for the Communist Party.
The rise and diffusion of anti-Euro attitudes in Italy was a multi-layered process where
new forms of hostility joined and overlapped the older ones. We can distinguish three phases
of the process. The first was the adoption of anti-Euro attitudes by the far-right and far-left
parties in the 1990 s. Far-right parties opposed the common currency as a logical consequence
of their anti-integration attitudes, while far-left parties saw monetary integration as a neoliberal
manoeuvre to curb welfare and workers’ rights. The second wave of anti-Euro
sentiment started after the introduction of the common currency. In Italy and other
countries, mainly in Southern Europe, the early months of the Euro’s circulation resulted
in an increase in prices that affected consumers and strongly irritated the middle classes and
pensioners. This made hostility to the Euro a communication tool for those parties remote
from power and in search of issues powerful in mobilizing votes. Finally, hostility to the Euro
spread widely and dramatically during the economic crisis, in particular, during the sovereign
debt crisis. At that point, hostility to the Euro became an anti-system policy proposal that
attracted both extremists and supporters of the new anti-system parties. This process emerges
clearly from the Eurobarometer surveys of popular attitudes towards the Euro. During the
period from 2013 to 2019, significant proportions of Italian citizens were hostile to the Euro,
while anti-Euro parties gained increasing electoral support (Table 1).
Table 1. Answers to the Eurobarometer question, ‘Is having the Euro a good or bad thing for your
country?’, and votes for anti-Euro parties in Italy.
2013 2014 2015 2016 2017 2018 2019
Good 52 43 49 41 45 57 55
Bad 38 47 41 47 40 30 36
Rank among the 19 Eurozone countries:
Good 17 18 19 18 18 17 19
Bad 1 1 1 1 2 4 2
Votes for anti-Euro parties (%)a
31.96 35.00 - - - 57.30 60.47
a. National elections (2013 and 2018) and European elections (2014–19) Source: European Parliament, European Elections
National Results, https://www.Europarl.Europa.eu/election-results-2019/en/national-results-overview/; NSD –
Norwegian Centre for Research Data, European Election Database, http://eed.nsd.uib.no/webview/index.jsp?
study = http://129.177.90.166:80/obj/fStudy/ATEP2009_Display&node = 0&mode = cube&v = 2&cube = http://
129.177.90.166:80/obj/fCube/ATEP2009_Display_C1&top = yes; European Commission, Flash Eurobarometer, n. 386,
405, 429, 446, 458, 473, 481.
CONTEMPORARY ITALIAN POLITICS 5
It was in particular during the most recent upsurge of anti-Euro sentiment that
a number of intellectuals and professionals proposed an apparently coherent justification
of it by pointing to the single currency as an explanation for the crisis and
Italy’s economic decline. Their interpretation mainly centred on the damage created
by membership of the Eurozone. The most influential ‘intellectual fathers’ of Italian
anti-Euro sentiments were economists inside or outside the academic world. The
most important were Alberto Bagnai, Paolo Savona, Antonio Maria Rinaldi and
Claudio Borghi. The relevance of many of these ‘anti-Euro intellectuals’ was not
a reflection of their academic influence or scientific excellence. Bagnai is an associate
professor with a low ranking among Italian economists, while Borghi is a former
financial trader and bank manager who once gave a small number of university
courses. Neither is Rinaldi a prominent academic. He was a manager in the banking
sector who offered classes in a number of Italian universities as a non-tenured
professor. Only Savona is a famous economist and a high-ranking politician, having
been a minister in the Ciampi government during the early 1990 s. Instead of
academic channels, almost all of them have used non-academic publications, TV
talk shows and blogs to spread their visions of the Euro and to establish a direct
linkage with anti-Euro campaigners.
It was Alberto Bagnai who proposed the best-structured version of the case
against the Euro in Italy, both in his book, Il tramonto dell’Euro (The Euro sunset),
which became the bible of anti-Euro campaigners in Italy, and through the blog
Goofynomics (goofynomics.blogspot.com), which he created and manages. The key
points in the anti-Euro ideology, as well as some crucial policy proposals, emerge
from Bagnai’s books (Bagnai 2012, 2014). He saw the end of public debt monetization
in 1981 (the so-called divorce between the Bank of Italy and the Italian
Treasury) and capital liberalization as the real cause of the dramatic increase in
the Italian public debt, and saw the adoption of the Euro as a sort of German and
French plot against Italian industry and its competitiveness. He also tried to
demonstrate the unsustainability of the Euro, using the Frenkel cycle model,
which explains the mechanisms underlying the Asian financial crisis at the end of
the 1990 s (Bagnai 2012, 134–64). Finally, he proposed a strategy for exiting the
Euro based on the unilateral withdrawal of Italy and the introduction of a national
currency without prior agreement with the Eurozone partners.
Savona is a more cautious opponent of the Euro and demonstrates a realistic
perception of the risk for the Italian economy in leaving the Euro (sometimes called
Italexit). Although he has expressed criticism of the Eurozone in several authored
and edited books, sometimes cooperating with Rinaldi, the most politically relevant
contribution of Savona comes from the so-called ‘Plan B’, a study on Italexit
prepared by a group that included Paolo Savona.2
‘Plan B’ is probably the most
sound plan for an Italian exit from the Eurozone. It is also the most realistic in
describing the problems and consequences of Italexit, especially if it is not agreed
with the other Eurozone partners. So, Savona saw Italexit as the least-best option for
responding to the Italian crisis in the Eurozone if no changes came about, in
contrast to the more aggressive solutions proposed by the other anti-Euro
intellectuals.
6 R. DI QUIRICO
The main contribution from Borghi to the anti-Euro debate derives from a booklet in
which he answered a number of general questions concerning an Italian exit from the
Eurozone. However, many other contributions to the Italian anti-Euro ideology came
from blogs and websites such as Goofynomics, Scenarieconomici.it, the fiercely anti-Euro
stopEuro.news, and most importantly, from the M5 s leader’s blog, www.beppegrillo.it.
What makes the anti-Euro intellectuals’ activity relevant is its role in creating and
disseminating an anti-Euro ideology based on controversial ideas and distorted or
simplistic representations of economic mechanisms. This activity is crucial in winning
support for anti-Euro parties. The Web and blogs have been revealed as formidable tools
for anti-Euro ideology building and dissemination. It was mainly through blog debates
involving direct participation by electors that anti-Euro sentiments became a crucial
topic in populist discussions of the economic crisis in Italy and how to overcome it.
Anti-Euro intellectuals also influenced public discussion (mainly from the League
side) of monetary affairs. In fact, the anti-Euro debate shaped the strategies of anti-Euro
parties when they gained power. The parties that lacked an anti-system intelligentsia then
tried to put into practice the main ideas and plans proposed by the anti-Euro ‘maîtres à
penser’. The most important and influential of them joined the League or indirectly
supported it.3
This choice made hostility to the Euro a pivotal issue in the League’s
political programme while it is probably one of the reasons for the Five-star Movement’s
abandonment of its hostility following the end of its alliance with the League.
Hostility to the Euro and the political programme of the League and the M5 s
There are various anti-Euro parties in Italy. Some of them, like the League, the M5 s
and Fratelli d’Italia (Brothers of Italy, FdI), have seats in Parliament. Others, like the farright
parties, Forza Nuova and Casapound, participated in the last parliamentary elections
but did not gain parliamentary representation. In this article, attention is almost
wholly devoted to the M5 s and the League because they formed a government. Until
today, it has been the only example of an anti-Euro government in the Eurozone. This
anti-Euro stance generated concern both in the EU institutions and in the Eurozone
member states, prompting a reaction.
One of the most important research questions we face in studying the two main Italian
anti-Euro parties is what explains the different trajectories taken by their hostility to the
Euro. While the League was fiercely hostile to the Euro and made such hostility a core
element of its electoral and government programme before, during and after its period in
office (Ivaldi, Lanzone Woods, 2017),4
the M5 s toned down its hostility to the Euro after
it gained power, and later wholly abandoned it.
The different attitudes of the League and the M5 s to the Euro have various and
in some respects complementary explanations. First, the origins of hostility to the
Euro in the two parties are different. The League opposed the Euro from the late
1990s because it represented a threat to the competitiveness of northern Italian
industry (Huysseune 2010), which was the core electoral base for the League at that
time.5
In the early 2000s, the League used anger at the increase in the prices of
consumer goods that followed the introduction of the single currency to mobilize
electoral support. So, when the international financial crisis broke, resulting in the
Italian economy slowing down for several years, the League had all the political and
rhetorical capital required to argue that Italy’s problems were a consequence of the
introduction of the Euro. Consequently, hostility to the Euro became the one-sizeCONTEMPORARY
ITALIAN POLITICS 7
fits-all solution in the League’s economic policy, making the party the main antiEuro
formation in Italy.
The Five-star Movement’s path to hostility to the Euro was different. Created in 2009
as a movement that refused to call itself a party, the Movement’s political programme
shifted from a focus on a small number of points mainly concerning environmental
issues, to a broader focus covering a range of topics suggested by the dramatic economic
crisis. It was mainly the rhetoric of M5 s guru, Beppe Grillo, which was responsible for
introducing a critical attitude towards the European Union, its policies and its neoliberal
soul.6
Consequently, M5 s hostility to the Euro was mainly a result of both its leader’s
critical attitude and the need to present a coherent political programme to M5 s
supporters.
Second, the function of hostility to the Euro in the political programmes of the
League and the M5 s is different. Initially, the League adopted hostility to the Euro
as a powerful means of spearheading discontent and mobilizing new voters. Later,
hostility to the Euro helped the League to redefine its political programme and its
main goals. It faced an existential crisis during the early 2010s because of financial
irregularities and corrupt management of the party by the League’s founder and
historic leader, Umberto Bossi. In 2013 Matteo Salvini became the new leader of the
party. He reversed the regionalist nature of the League, renouncing separatism and
its anti-centralist goals (Albertazzi, Giovannini and Seddone, 2018). Meanwhile, he
realigned the League towards anti-immigration and anti-European positions, recovering
and emphasizing hostility to the Euro as part of a general overhaul of the
party’s ideology and political programme. In contrast, the M5 s used hostility to the
Euro as a component of its anti-system attitude. Mainstream Italian parties and
almost all the parties that had governed the country in the previous decades were
pro-European and, in some cases made European integration a key element of their
political platforms. Consequently, for the M5 s, fighting the system and contesting
the traditional pillars of Italian politics implied also contesting European integration.
When, after it joined government, the M5 s became part of the system, antiEuropeanism
was no longer a tactical need, nor was it crucial to attracting electoral
support due to the confluence of many former left-wing voters, traditionally in
favour of European integration, in the M5 s electoral basin. When the M5 s-League
coalition took office, the new government was accused of wanting to lead Italy out
of the Eurozone. To counter these accusations, the M5 s attenuated its hostility to
the Euro while the League merely hid it. Later, when the League–M5 s government
fell, and a new government was created by the M5 s and the pro-European parties,
the PD, LeU and Italia Viva,7
hostility to the Euro was no longer useful for
government economic policy or for sustaining an economic ideology that the
M5 s was not capable of implementing by itself.
This last circumstance is closely linked to the third explanation for the diverging
anti-Euro attitudes of the League and the M5 s. The M5 s draws most of its antiEuro
ideology from sources external to the party, such as the so-called ‘anti-Euro
intellectuals’, or from adapting to its political programme statements from internationally
prominent economists like Stiglitz and Krugman.8
Instead, the League
recruited to its ranks the main Italian anti-Euro ideologists and assigned them
relevant positions in the party and the government. Notwithstanding the
8 R. DI QUIRICO
appreciation demonstrated by supporters of the M5 s and other political forces close
to them for the anti-Euro arguments of Bagnai,9
there were some points of friction
between the M5 s political narrative and leading anti-Euro intellectuals. In the Fivestar
Movement’s explanation of Italy’s crisis and decline, corruption and clientelist
deficit spending policies play a central role. M5 s leaders justified their anti-system
approach as the fight of citizens against the ‘casta’ (caste) which includes mainstream
parties and part of the administrative structure. During the early years of the
Five-star Movement’s existence, its members made honesty, good governance and
abolition of privileges the core of their political programme and their primary
strategy for dealing with the country’s problems. Unfortunately, this explanation
clashed with the leading explanation offered by Bagnai, Borghi and other anti-Euro
intellectuals who undervalued or denied the role of corruption and bad governance
in Italy’s decline. Instead, they insisted on a proudly nationalistic view of the crisis
in which external constraints (the Eurozone rules and the Euro in particular) played
the most critical role.10
Thus, a fundamental contradiction emerged between hostility
to the Euro and anti-system politics in the Movement’s ideology. This contradiction
and the traditional tendency of M5 s supporters to ‘follow the leader’, Grillo,
in his U-turn revisions of party strategies, facilitated the abandonment of hostility to
the Euro by the M5 s when the alliance with the League was broken, and government
responsibilities required a more collaborative approach to European
institutions.11
Then, Grillo himself abandoned harsh criticism of the PD and the
Euro to support the creation of the new government based on the M5 s–PD alliance.
However, not all M5 s supporters accepted the new course charted by Grillo and the
M5 s. Anti-Euro sentiments survived in the ranks of the M5 s and this probably
helped to move votes from the M5 s to the League.12
Hostility to the Euro in power and the dilemma of government
The case of Italian anti-Euro parties is such a relevant one because two of these parties
have had governing responsibility in one of the main Eurozone countries. This was
a severe test for their economic ideologies and created tensions between the Italian
government and the EU with negative consequences for the stability of the Eurozone
as a whole.
When the 2018 election in Italy resulted in victory for the M5 s, a great success for the
League and a dramatic defeat for the mainstream parties, the PD and Forza Italia (FI),
forming a new government proved to be an exceptionally complicated puzzle.13
The M5 s
participated in the electoral competition without joining a coalition or anticipating
alliances with other parties. In contrast, the League formed part of a centre–right
coalition with Berlusconi’s party, FI, and FdI. This coalition gained more seats than
their competitors, but it failed to win sufficient seats to sustain a government in office.
Due to the hostility between the M5 s and FI, and the opposition within the PD
to an agreement with the M5 s, the only governing solution possible was an alliance
between the M5 s and the League. Such an arrangement required tortuous negotiations
regarding both the choice of Prime Minister, and the government programme.
Finally, a ‘contratto di governo’ (government contract) was signed by the M5 s and
the League,14
and Professor Giuseppe Conte became Prime Minister with the leaders
of the M5 s and the League (respectively Luigi Di Maio and Matteo Salvini) both
becoming deputy Prime Ministers. However, tensions emerged between the
CONTEMPORARY ITALIAN POLITICS 9
government leaders and the President of the Republic, Sergio Mattarella, concerning
the members of the Cabinet, in particular, the proposed Finance Minister, Paolo
Savona, who was known for his hostility to the Euro and his support for Italexit.
Savona’s anti-Euro attitude confirmed the anti-Euro and pro-Italexit stances of the
new government, which President Mattarella could not accept. In the end, a new list
of ministers was proposed with Savona as Minister for European Affairs and
Giovanni Tria as Finance Minister.15
Due to the M5 s-League government’s weak foundations, the ‘contratto di governo’
became the key programmatic document sustaining it. In the final version of the document,
there are no direct references to anti-Euro policies. However, some of its provisions
suggest that the Government’s hostility to Europe was merely kept hidden for
reasons of expedience.16
The European policy of the M5 s–League government and, more generally, its
relationship with the EU institutions and the EU partners, were among the most
problematic issues the Government had to face. While the Italian government and
the Minister of the Interior, Salvini, directly challenged both the European Commission
and other EU countries over the immigration issue and the problem of the redistribution
of refugees among EU member states, conflict in economic matters and the
Eurozone rules was softer because of the mediation role played by Tria. However,
these conflicts were more dangerous for the structural integrity of the Eurozone area.
Hence, concern for the Italian government’s attitudes towards the Eurozone rose and
placed in danger Italy’s financial stability. Italian fiscal and budgetary policy, in
particular, became a battlefield between the Italian government and the EU institutions
as well as an element of division within the Italian government itself. An expansive
budgetary policy and a deficit spending strategy were the obvious consequences of the
economic programme of the M5 s–League government. The three main economic
proposals of the M5 s and League, the ‘reddito di cittadinanza’,17
the ‘quota 100ʹ,18
and the ‘flat tax’ (15%), were expensive measures that could not be financed via an
increase in tax revenues or by significant budget cuts, both of which were excluded by
the M5 s and League electoral programmes. Hence, outflanking the Eurozone budget
rules and increasing the deficit and public debt were the only possible ways to mobilize
resources.
The ‘battle for the budget’ between the Italian government and the European
Commission embroiled the M5 s–League coalition in an unpropitious contest. Since
the 2018 general elections, it had been apparent that there was widespread international
discomfort with the political situation in Italy and with the new government coalition.
International public opinion depicted the M5 s–League government negatively and
began to debate the risks for Italian financial stability. Meanwhile, tension was mounting
in the financial markets, resulting in an increase in the spread on Italian and German
government bonds.19
While this increase had an impact on the Italian economic policy
debate, creating concern among the public and reinforcing hostility to the M5 s–League
government on the part of its opponents, the increase in interest rates endangered the
sustainability of both the Italian public debt and the Italian banking system. In fact, as
a consequence of the Italian sovereign debt crisis in the early 2010 s, Italian banks had
large numbers of Italian bonds in their portfolios. This made these banks sensitive to the
bonds’ depreciation because of the effect on their asset values and the solidity of their
10 R. DI QUIRICO
budgets, as well as the negative influence on interest rates payable on loans from foreign
banks.
On the public debt side, soon after the start of the new government’s term of office it
became evident that the increased spread had annulled the effects of the measures to
increase revenue to fund the new government’s policy initiatives. This problem became
much more evident when conflicts with the European Commission arose concerning the
Italian budget. The spread increased with every further step in the Government’s fight
against the European Commission. Meanwhile, the evident embarrassment and hostility
to the Government’s anti-EU policy of Finance Minister, Tria, and the growing uncertainty
of Prime Minister, Conte, was accompanied by the feeling on the part of many
M5 s parliamentarians, ministers and supporters that it was ineffective.
Conflict emerged between the M5 s and the League about the negotiation strategy with
the EU. The League and its anti-Euro experts supported a sort of blackmail strategy based on
fear of the impact of Italian bankruptcy on the Eurozone as a whole. This strategy reflected
the belief of anti-Euro theorists supporting Italexit that Italy could leave the Eurozone with
limited damage. In their view, only a drastic shift in the costs and benefits involved in
membership of the Eurozone could justify the continued renunciation of monetary sovereignty.
In addition, the critical role assumed by hostility to the Euro in League propaganda
meant that such a strategy represented a consistent application of League electoral promises.
In contrast, diminished hostility to the Euro, and concern over the growing stature of the
League in government decisions and in voting intentions polls, made the M5 s reluctant to
follow the League on the anti-Euro path.20
In fact, a sound public budget was crucial to
funding the Movement’s expensive welfare measures and it became clear to the M5 s that
the increase in interest payments on the public debt made their objectives financially
unsustainable. The League did not have this problem because the decrease in revenue
due to the flat tax it supported could be covered by cuts in other sectors, welfare included.
A final contrast between League hostility to the Euro and the more cautious attitudes
of the M5 s arose with the so-called ‘minibots’21
issue. The issue emerged during the final
months of the M5 s–League government and created concern at international level and
tensions inside the government. The League (Borghi in particular) suggested issuing lowdenomination
bonds (minibots) paying no interest, to be used for paying government
debts with commercial suppliers. The wide circulation of minibots would in effect create
a parallel currency potentially useful as a substitute for the Euro in the event of an Italexit
(The Economist, 2019). An acrimonious debate began, involving the leaders and
a number of influential members of both the League and the M5 s (including Di Maio,
Salvini, Giorgetti and Di Battista) who defended the minibot plan, and leading economists
who opposed minibots. They included Tria; Bank of Italy governor, Ignazio Visco;
the President of the Italian Banking Association, Antonio Patuelli, and European Central
Bank president, Mario Draghi (the Economist, 2019; la Repubblica 2019a, 2019b, 2019c,
2019d). In the end, minibots were not introduced, falling victim to the political crisis that
led to the collapse of the M5 s–League government.
Economic matters played a role in this crisis. The agreement between the Italian
government and the EU Commission did not allow for the enlarged deficit that had
been planned.22
It therefore became difficult to cover the cost of the expensive
flagship policies pursued by the M5 s and the League. While the M5 s saw its
flagship policies (reddito di cittadinanza and quota 100) restricted but approved, the
CONTEMPORARY ITALIAN POLITICS 11
League saw its crucial electoral promise (the flat tax) placed in danger. The latter
was crucial to the League’s attempts to attract votes from professionals and drain
support from FI, then the League’s main competitor for leadership of the centre
right. For Salvini, capturing leadership of the coalition held out the prospect of his
becoming the fulcrum of Italian politics with the option of forming a government
with the M5 s as a minority partner or a centre-right government under his
leadership. In August 2019, he attempted to bring down the Government and
force the holding of fresh elections. However, the M5 s and the PD reached
agreement on the formation of a new government under the continued leadership
of Giuseppe Conte, thus relegating Salvini and the League to the opposition.
Conclusion
The experience of the M5 s–League government represents the failure of a policy of
hostility to the Euro and, more generally, proof of the difficulty involved in attempting to
outflank the constraints of the Eurozone either by ignoring them or by contesting them.
Losing the ‘battle for the budget’ against the Commission, and pressed by financial markets,
the M5 s and the League were forced to acknowledge that their economic policy was
unsustainable or merely a bluff. However, external and internal institutional action played
a determining role in emasculating the policy of hostility to the Euro. The open opposition
of President Mattarella to the policy, and the patience and inexorability with which the
Commission diverted the Italian government from the path of blackmail to one of negotiation,
dismantled the anti-Euro design. However, the risk of Italexit was concrete and
remains a policy option if a centre–right coalition under League leadership regains power.
The vicissitudes of Italy’s anti-Euro parties and the M5 s-League government suggest
three main conclusions. First, hostility to the Euro involves resistance to external constraints.
However, this depends on the financial situation of the country concerned and
the possibility of funding expansive economic policies. Anti-Euro governments in financially
sound countries may be able to avoid external constraints on their budgetary
policies. Hostility to the Euro is less attractive in financially sound countries because
Eurozone rules do not prevent moderately expansive economic policies. Therefore, if
anti-Euro parties gain power in Germany or Finland, it is probable that hostility to the
Euro will lose relevance in their economic policy.
Second, the political relevance of hostility to the Euro resides mainly in its ideological
function. Thus, hostility to the Euro may play a more critical role in the electoral
programmes and communication patterns of anti-Euro parties than in their economic
policies. This means that if anti-Euro parties gain power in other Eurozone countries, their
commitment to implementing their electoral and ideological plans may outweigh the
economic convenience of adopting anti-Euro policies. Thus, exiting the Euro remains
a possibility for all those countries where anti-Euro parties could gain power in the future.
Third, the role of EU institutions in resisting hostility to the Euro is crucial, but
its impact is felt mainly on the political side and by informal governance strategies.
The rejection of the Italian budget proposal by the Commission was essential in
confronting the Italian anti-Euro challenge, but its effectiveness lay not in EU
economic governance tools or European semester procedures. The link between
the EU institutions and international markets was what made M5 s–League antiEU
policy economically unsound. Seemingly, the positive attitude of the
Commission to the second Conte government (or the M5 s–PD–LeU government)
12 R. DI QUIRICO
has strengthened internal political cohesion and marginalized anti-Euro campaigners.
In other words, the political action of EU institutions and its impact on
financial markets was what facilitated the abandonment of hostility to the Euro by
the M5 s, and the collapse of the M5 s–League government. This strategy could be
much less effective if applied to countries less dependent on international financial
markets.
Notes
1. The term ‘anti-EU’ used in this article fits better with the vehement hostility to the EU
shown by some political parties than does the traditional term, ‘Euroscepticism’. In fact,
Euroscepticism refers to a negative attitude towards further integration, not to open
opposition to the EU with the (declared or implicit) aim of dismantling it, as in the case
of many anti-Euro parties.
2. See Savona (2015) and the slides with the Plan B explanation at https://scenarieconomici.it/
il-piano-b-per-litalia-nella-sua-interezza/(consulted 19 October 2019).
3. Bagnai, Borghi and Rinaldi were elected to Parliament in 2018 as League candidates. Bagnai
became the president of the Senate Finance Committee while Borghi was elected president
of the Chamber of Deputies’ Committee for the Budget, the Treasury and Economic
Planning. Borghi is also the League’s spokesperson for the economy.
4. In November and December 2019 the League attacked the new Conte government for its
support for revision of the European Stability Mechanism (ESM), accusing it of being
subservient to EU powers, even though League leader, Matteo Salvini was deputy Prime
Minister when discussion of the revision started and a basic agreement was found at
intergovernmental level. This attack and the subsequent acrimonious debate in
Parliament show that hostility to the Euro remains a key weapon used by the League to
gain power and divide its opponents, mainly because of its appeal to those M5 s parliamentarians
who share the League’s anti-Euro ideology.
5. For decades, the League was a regionalist party with an electoral base almost exclusively
centred in Northern Italy. Independence for Padania (a mythical nation the League identifies
with the population of northern Italy) was its main political objective. It was only with
the rise of Matteo Salvini as party leader that the League abandoned regionalism and gained
a nation-wide electoral base.
6. Since before its rise to power, M5 s hostility to the Euro was less vehement than the League’s.
The main demonstration of hostility to the Euro by the M5 s was the proposal for
a consultative referendum on leaving the Euro advanced in 2014 by Grillo who repeatedly
expressed his hostility to the common currency and Eurozone rules (Franzosi, Marone, and
Salvati 2015: 113–15; Garcia Lupato and Tronconi 2016). Other anti-Eurozone proposals
had been included in the M5 s electoral programme for the 2014 European election entitled
‘Seven Points for Europe’ (Franzosi, Marone, and Salvati 2015, 113–14).
7. Italia Viva is a party created in September 2019 by the former Prime Minister, Matteo Renzi,
who left the PD with approximately 35 other PD parliamentarians.
8. Grillo frequently refers to Stiglitz and other internationally known economists like
Krugman and Fitoussi as intellectual referees for the M5 s. In 2013 there were ambiguous
statements (which it seems were not true) by Grillo concerning his collaboration with
Stiglitz in writing the M5 s economic programme. The three economists are frequently
cited on Grillo’s blog (http://www.beppegrillo.it), and some of their articles have been
published (in Italian) there.
9. This was the case of Italia dei Valori (Italy of Values, IdV), a party founded by the wellknown
public prosecutor, Antonio Di Pietro. Due to mismanagement, the party lost most of
its supporters to the M5 s. Although the new IdV secretary, Ignazio Messina, was hostile to
CONTEMPORARY ITALIAN POLITICS 13
the M5 s, he and the IdV executive committee saw Bagnai and his theories as being the main
point of reference for IdV’s economic and European programme .
10. It was Bagnai, in particular, who stressed this point, rejecting corruption and bad governance
in the previous decades as an explanation for Italy’s economic decline. Instead, he
stressed the hegemonic role of Germany and its ability to bend EU policies and the
Eurozone architecture to German interests (Bagnai 2012, 2014).
11. An example of the change in M5 s attitudes to the EU and its institutions was the
Movement’s support in the European Parliament for Ursula von der Leyen as the new
President of the European Commission. On that occasion, the M5 s MEPs voted together
with the PD and against the League MEPs even though they were allied in the Italian
government.
12. This was the case of Senator Gianluigi Paragone, who abandoned the M5 s and immediately
after resumed his promotion of anti-Euro sentiments.
13. At the 2018 Italian general election, the League won 125 seats in the Chamber of Deputies
and 58 seats in the Senate as part of the centre–right coalition whose constituent parties had
a combined total of 265 deputies and 137 senators. The M5 s won 227 deputies and 112
senators. The results meant that the M5 s was the winning party and the centre right the
winning coalition (D’Alimonte 2019, 116).
14. See the final version of the contract at https://bit.ly/2rWVt6v (consulted 19 October 2019).
15. Tria is a pro-EU academic and a supporter neither of the League nor the M5 s. His
appointment was designed to provide the reassurances, demanded by Mattarella, of the
Government’s adherence to the Eurozone rules, and to calm the nerves of the international
financial markets and Italy’s Eurozone partners.
16. In an earlier draft of the document, the anti-Euro nature of the policy programme is more
accentuated. In the section devoted to the European Union (p.35) the anti-Euro attitude of
the new government is clearly depicted. In fact, the contract states: ‘The framework of
European economic governance (the Stability and Growth Pact, Fiscal Compact, EMS and
so on) based on market predominance and the respect of stringent, economically and
socially unwarranted and unsustainable constraints, must be radically changed.
Meantime, in order to allow member states to initiate procedures leading to an agreed
exit [from the Eurozone] in the event of a clear popular desire to leave, specific economic
and juridical technical procedures must be introduced to allow member states to withdraw
from the monetary union and so regain their monetary sovereignty, or to stay out [of the
Eurozone] by means of a permanent opt-out clause’ (author’s translation). See Huffington
Post, 2018 ‘Un Comitato di conciliazione (parallelo al Consiglio dei ministri)’, 15 May 2018,
https://bit.ly/2k3bCmx (consulted, 19 October 2019).
17. The ‘reddito di cittadinanza’ (citizens’ income) is a subsidy to citizens on low incomes and
sits alongside the ‘pensione di cittadinanza’ (citizens’ pension) for the elderly. Both subsidies
are designed to increase the total incomes of the beneficiaries to €780 per month.
18. ‘Quota 100ʹ concerns a reform of the pension system that allows workers with global
seniority (the sum of their age and the years of paid contributions) of 100 (e.g. workers
of 62 years of age who have paid social security contributions for 38 years) to retire.
19. The spread rose dramatically from May 2018 to November 2018, initially as a consequence
of the markets’ fear that the new M5 s–League government might take Italy out of the
Eurozone, and later because of the rejection of the Italian budget by the European
Commission. Starting from approximately 130 basis points immediately after the 2018
elections, the spread touched 326 points at the end of November 2018. Later, it declined
mainly because tensions between the M5 s–League government and the Commission
softened, and an agreement on the Italian budget was reached.
20. Surveys that suggested a dramatic increase in electoral support for the League and a drastic
decline in votes for the M5 s were confirmed by the 2019 European election results when the
League won 38% of the votes and the M5 s only 17.1%.
21. The acronym ‘BOT’, stands for buoni ordinari del Tesoro, or Treasury bills. The best
translation of ‘minibots’ is, therefore, ‘low denomination government bonds’.
14 R. DI QUIRICO
22. The Italian government accepted a reduction of the planned deficit from the proposed 2.4%
of GDP to 2.04%. It also agreed to significant increases in VAT rates if the budget provisions
were not respected.
Disclosure statement
No potential conflict of interest was reported by the author.
Notes on contributor
Roberto Di Quirico is a tenure Lecturer in Political Science and Aggregate Professor of
International Relations at the University of Cagliari (Italy). A former Jean Monnet Module
professor at the University of Florence, and visiting Lecturer at the University of Bath (UK). His
research interests focus on monetary integration, the EU economic governance, and democracy in
Southern Europe. His principal publications in English are Italy, Europe and the European
Presidency of 2003, Paris, Notre Europe, 2003, preface by Jacques Delors, A Europe Apart.
History and Politics of European Monetary Integration, European Press Academic Publishing,
2020, and The Road to Brexit: European integration, the UK and the failure of the “malign neglect”
strategy toward the EU, in A. Bongardt, L. S. Talani and F. Torres (eds.), The Politics and Economics
of Brexit, Edward Elgar, 2020.
ORCID
Roberto Di Quirico http://orcid.org/0000-0002-7487-5788
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CONTEMPORARY ITALIAN POLITICS 17
185
1. Introduction
Politics in the European Union during the 2010s was shaped by the
consequences of the international economic crisis and the rise of populism.
These events changed politics and electoral competition in the EU member
states. While the economic crisis delegitimized mainstream parties and
favoured the rise of new ones, the rise of populism transformed political
competition from intra-systemic to pro vs anti-systemic1
. In other words,
many of the new parties that appeared in the 2010s or were reinvigorated
by the economic crisis and by popular discontent proposed themselves as
anti-system parties, contesting the whole system and offering themselves as
alternatives to the parties in governments and their choices.
Moving to anti-system positions means delegitimizing the existing system
and proposing to change it dramatically. A working strategy for anti-system
parties, which had already been tested in the 1930s and the 1970s, is to depict
the nature of the existing system as the main cause of its crisis. As happened
in the past with communist and fascist parties, contesting the system needs to
propose an alternative and better system as a substitute. The necessity to do so
made new policy aims, political beliefs and a systemic critique indispensable.
In other words, anti-system parties had to create a new ideology apparently
coherent for capturing and convincing new supporters. In the 2010s, they
took advantage of the impressive expansion in online political participation
and the latest social media role in shaping political preferences.
The rise of populism and the transformation in European party politics
advanced with the politicization of new issues previously neglected, and
became relevant because of the crisis. This was the case with European
monetary integration and its most important symbol: the euro. The euro issue
became an essential element in the construction of an anti-system ideology
1. Cfr. H. Kriesi, The Populist Challenge, in «East European Politics», vol. 37, n. 2, 2014,
pp. 361-378.
Fake News, Economic Ideologies
and the Rise of Anti-Euro Parties
Roberto Di Quirico
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186
in many Economic and Monetary Union (EMU) countries and inspired the
political programme of important parties that gained growing consensus
during the 2010s. Such relevance of the euro and monetary policy added to the
crucial issue of the Eurozone crisis and the strategies for economic recovery
that were central in the political programmes of the populist parties and in
their political communication. So, economics became crucial in proposing
a new ideology to attract supporters. However, alternative economics (or
populist economic ideology) is required to appear coherent to be credible
and applicable for supporting populist policy proposals.
The need for coherence also permitted to amplify the effect of the
“echo chambers” that characterizes the populist debates online. A network
of hyperlinks connecting blogs and papers created a loop in which online
activists navigate in a self-assessing context. Each post or article confirms
the conclusions of the others that are parts of the network while dissenting
and critical texts are marginalized or excluded by the debate.
The specific case of anti-euro parties and the construction of their
economic ideologies is relevant to study the complexity of populism
diffusion in the 2010s. Two essential elements emerge from this case.
First, it is crucial distinguishing the cultural background of populists.
Often, populists are pictured as illiterate or poorly educated persons who
support simplistic political proposals, sometimes mislead by fake news
and propaganda. Instead, the case of anti-euro parties and the construction
of economic ideologies show how educated persons had been attracted by
populism and contributed to creating and reinforcing complex economic
ideologies. Second, this case study suggests distinguishing between “fake
news” and “fake economics” when studying populism. While fake news
usually deal with a specific event or persons, “fake economics” is much
more complex because it is the attempt to create a (looks like) coherent
network of fake news or misleading analysis. Also, while in many cases
fake news are made deliberately as fake and later diffused by believers, fake
economics results from a complex interaction in which scientific and nonscientific
pieces of evidence are connected by many actors and adapted to
support political proposals. So, the main aim of the creators and contributors
of fake economics is not the diffusion of fake news to cheat naïve persons but
instead the creation of a coherent set of views to amplify the echo chambers
effect for educated persons, particularly those educated in disciplines other
than social sciences. This strategy worked for both populist and traditional
anti-EU parties
This chapter illustrates the early results of broader research on anti-euro
parties in EMU countries. The term “anti-eurist” for opponents of the EMU
and supporters of the anti-euro parties is preferred to the more intuitive
‘anti-euro’ to avoid confusion between specific hostility against the common
currency and the more generic opposition to the EU or other euro-level
activities. Similarly, the term “anti” has been preferred to the more ambiguous
BORZONI.indd 186BORZONI.indd 186 22/11/21 11:0622/11/21 11:06
187
term “sceptic” (e.g. anti-EU instead of Eurosceptic) to stress a considerable
opposition against the EU, the EMU and European integration.
The main ambition of this chapter is explaining the connection between
new forms of political participation and the diffusion of anti-euro parties
during the 2010s. We suggest here that the main step in establishing this
connection was the creation of an ideology capable to offer an apparently
choerent framework where populists and other opponents of the euro can
justify their policy proposals. The construction of this ideology will be
analized in section 2. A clear definition of anti-eurism and its different levels
is required to study these parties, and it will be proposed in the section 3. This
definition allows in section 4 creating a list of anti-euro parties in the EMU
that will help study their main characteristics, potentialities, and relevance in
their country’s politics and the European Parliament. Despite the scarcity of
literature on the anti-euro parties as a category2
, in section 5, a first attempt to
understand the relevance of anti-eurism and explain its rise will be proposed
in a comparative perspective.
2. The economics of anti-eurism: explaining the Eurozone crisis to
“digital” citizens
The international economic crisis started in the USA in 2008 with the
collapse of Lehman Brothers, and the following Eurozone crisis were the
main engines of populism widespread in the EU. Still, the international
economic crisis and its impact on the EU member states focalized political
tensions in the economic side of policy and boosted anti-systemic attitudes
of electors. This process created electoral space for new parties capable of
proposing themselves as an alternative to mainstream parties and the political
establishment. However, other reasons, as the crisis of mainstream parties
and the invasiveness of EU governance, help to explain the rise and diffusion
of populism.
The economic crisis in Greece and the dramatic impact of the Troika
measures and rescue plans widespread concern about the economic future in
the EU and the soundness of economic policies carried on by the governments
in power. Many populist leaders saw the rise of Syriza in Greece and the fight
against the Troika as a sign of a mounting “anti-EU revolution”3
. Later, when
2. In contrast, there is extensive literature on the single anti-euro parties, particularly the
most successful ones like the German Alternative für Deutschland, the Italian Lega and the
French Rassemblement National. Also, the political relevance of “concern about the euro”
has been debated in the literature. Cfr. A. Chadi, Concerns about the Euro and Happiness in
Germany during Times of Crisis, in «European Journal of Political Economy», vol. 40, 2015,
pp. 126-146.
3. The Greek crisis had a relevant impact on anti-Europeanism and anti-eurism. It appeared
in the eyes of EU citizens as a demonstration of the EMU failure and the unacceptable cost
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the crisis became a general European crisis that put at risk the existence of
the whole Eurozone, fears about an economic collapse widespread in the
EU and added to the high levels of unemployment in feeding dissatisfaction
against governments in charge and, more generally, on the economic policies
in the EU, both those carried on by member states governments and those
supported by the EU. So, new and vast political space opened for those new
parties capable of offering alternative visions of the economics and new
economic policies to solve the problems of the Eurozone, at least those
problems perceived by the electors as affecting their lives negatively.
The Eurozone crisis also favoured the diffusion of anti-Europeanism that
already mounted in the early 2000s, in particular after the introduction of the
euro. The moving from “permissive consensus” to “constraining dissensus”
originated in part from the growing pervasiveness of EU governance and
rules in member states policies4
, in particular in the fields of economics and
of the euro for democracy and freedom. Also, citizens in other troubled EU countries saw the
Greece situation as their possible future if the EU policies were applied to all debtor countries.
On the other hand, citizens in the creditor countries saw at the protest and claims of the Greece
government a demonstration of the costs that can come for creditor countries due to the poor
budget policies and corruption in Southern Europe. For an overview of the Greek crisis and
its impact on the EU public opinion, cfr.: G. Pagoulatos, C. Triantopoulos, The Return of the
Greek Patient: Greece and the 2008 Global Financial Crisis, in «South European Society and
Politics», vol. 14, n. 1, 2009, pp. 35-54; K. Featherstone, The Greek Sovereign Debt Crisis
and EMU: A Failing State in a Skewed Regime, in «Journal of Common Market Studies»,
vol. 49, n. 2, 2011, pp. 193-217; M. Mitsopoulos, T. Pelagidis, Understanding the Crisis
in Greece: From Boom to Bust, Palgrave Macmillan, New York, 2012; D. Debomy, EU no,
Euro yes? European public opinions facing the crisis (2007-2012), Policy paper n. 90, Notre
Europe – Jacques Delors Institute, Paris, 2013; B. Clements, K. Nanou, S. Verney, “We
No Longer Love You, but We Don’t Want To Leave You”: The Eurozone Crisis and Popular
Euroscepticism in Greece, in «Journal of European Integration», vol. 36, n. 3, 2014, pp. 247-
265; M. Spourdalakis, The Miraculous Rise of the “Phenomenon Syriza”, in «International
Critical Thought», vol. 4, n. 3, 2014, pp. 354-366; Y. Stavrakakis, G. Katsambekis, Left-wing
Populism in the European Periphery: The Case of Syriza, in «Journal of Political Ideologies»,
vol. 19 n. 2, 2014, pp. 119-142; R. Di Quirico, A Europe Apart. History and Politics of
European Monetary Integration, European Press Academic Publishing, Firenze, 2020.
4. Permissive Consensus and Constraining Dissensus are the two concepts introduced
in the 2000s to explain the shift from Europeanism to Euroscepticism in the EU and the
limits this shift imposed to EU policies and further integration. Accordingly with the leading
proponents of this theory, permissive consensus facilitated integration for the early decades
of the process. When European citizens were not touched too much by the consequences of
the European Economic Community policies. This permitted the governments to go ahead
toward further integration without having to face popular opposition. All changed when the
MaastrichtTreaty and the rise of the EMU made the communitarian policies more pervasive and
EU-related issues entered the domestic political debate. Then, the widespread Euroscepticism
demonstrated by the failure of the French referendum on the so-called European Constitution
constrained the EU member states government to avoid further steps toward deeper integration
because of the popular dissensus. Cfr. L. Hooghe, G. Marks, A Postfunctionalist Theory of
European Integration: From Permissive Consensus to Constraining Dissensus, in «British
Journal of Political Science», vol. 39, n. 1, 2009, pp. 1-23.
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189
welfare. This transformation in the citizens’ attitudes toward the EU and
European integration helped populists convey the general dissatisfaction of
European citizens to criticism against the main economic result of European
integration; it means the euro. So, monetary integration became crucial to
explain the economic crisis in the EU and the specific problems of some
member states.
The crucial dichotomy that resumes the political use of anti-eurism in the
2010s is the contrast between the so-called “Northern Saints” and “Southern
Sinners”5
. This dichotomy derives from the North-South divide that emerged in
economic performances and debtors/creditors positions being how this divide
has become a politicized issue, particularly in the creditor countries. In many
representations, in particular the public opinion of Germany and other creditor
countries, Northern Saints are those countries that work well in the EMU and
that financially supported the Southern Sinners; it means those countries that
renounced to keep in line their budget and economic policies to fit with the
EMU rules. So, the sins of the Southern EMU member states could result in
financial costs for the good citizens in the Northern (Saints) countries.
The same divide seen by the Southern perspective looks like a “Northern
Exploiters” and “Southern Victims” contrast. Creditor countries are accused
of being the engineers of an exploitation system that aims to cut the Southern
countries economic competitiveness and create the condition for worsening
their debtor position. So, the EMU appears as an exploitation tool for
financially enslaving Southern countries and curbing permanently their
possibility of recovering and becoming competitive in intra-EU trade6
. So
both for Northern Saints and Southern Sinners, the euro is the problem.
Due to such diverging interpretation of the EMU and the euro role in
causing and feeding the Eurozone crisis, anti-eurism has been adopted by
parties with opposite aims. In Southern Europe, anti-eurists criticize the
EMU as the reason for economic troubles and loss of competitiveness. Most
importantly, euro and EMU are presented as the primary tools Germany
used to gain economic and financial predominance in Europe and curb the
competitiveness of the other economies. Instead, in Germany and other
“Northern Saints”, anti-eurists saw the euro as the link between virtuous and
vicious countries and the channel by which citizens’ money could flow from
virtuous to vicious countries.
These rough and simplistic pictures of the economic and financial
relationship inside the EMU derive from more sophisticated analyses
5. Cfr. M. Matthisjs, K. McNamara, The Euro Crisis’ Theory Effect: Northern Saints,
Southern Sinners and the Demise of Eurobond, in «Journal of European Integration», vol. 37,
n. 2, 2015, pp. 229-245.
6. This is a rough description of the different positions adopted by anti-eurists regarding
the role of the EMU in generating and feeding the North-South divide. Also, it is essential
to keep in mind the difference between media and populists in picturing the matter and the
different impacts on public opinion.
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proposed by academics who saw mainly the economic side of the problem to
offer political solutions that attracted anti-eurists. So, their work was crucial
to build the anti-eurist ideology and to spread it on the media.
The “academic fathers” of anti-eurism include economists who criticized
the EMU for scientific purposes only, and other scholars who emphasized the
EU monetary integration’s distortions and weakness deliberately, and aiming
to propose policy solutions. It is essential to keep in mind that the anti-eurist
implications of economists’ criticism of the EMU were not stressed by the
economists themselves in many cases. Instead, the intermediation of other
actors was crucial, mainly opinion leaders, bloggers, and politicians who
referred to famous economists to give scientific legitimacy to their political
proposals. World-renowned academics like Stiglitz and Krugman, who
criticized the working of the EMU and stressed the problems created by the
euro to some countries in crisis (e.g. Greece), had been cited frequently by
anti-eurist leaders and echoes of their theories can be found in the anti-eurist
literature7
. However, their analysis is usually oversimplified or distorted by
anti-eurists or not coherently connected with the anti-eurists policy proposals.
On the other hand, some academics can be considered anti-eurists
because they added to their scientific analysis some policy proposals that
have an anti-eurist nature. Among these academics, Hans Werner Sinn is the
most important both as scientist and contributor to the anti-eurist literature.
In his writings8
, Sinn explains who the EMU really works in technical terms
and suggests that these technicalities are critical. In particular, Sinn said that
the TARGET2 system for inter-EMU payments is the channel through which
debtors countries impose to Germany to lend them its money9
. This is a
7. On Stiglitz and Krugman criticism to the EMU, cfr. P.R. Krugman, Ending Greece’s
Bleeding, available at: www.nytimes.com/2015/07/06/opinion/paul-krugman-ending-greecesbleeding.html
(last accessed September 1, 2021); Id., Europe’s Impossible Dream, available at:
www.nytimes.com/2015/07/20/opinion/paul-krugman-europes-impossible-dream.html (last
accessed September 1, 2021); Id., Annoying Euro Apologetics, available at: krugman.blogs.
nytimes.com/2015/07/22/annoying-euro-apologetics/ (last accessed September 1, 2021); J.E.
Stiglitz, The Euro: How a Common Currency Threatens the Future of Europe, W.W. Norton
& Company, New York, 2017.
8. H.W. Sinn, Farewell to the Euro?, available at: www.project-syndicate.org/commentary/
farewell-to-the-euro, 30-6-2011 (last accessed September 1, 2021); Id., Should Germany
Exit the Euro?, available at: www.project-syndicate.org/commentary/should-germany-exitthe-euro-by-hans-werner-sinn?barrier=accesspaylog,
23-4-2013 (last accessed September
1, 2021); Id., The Euro Trap. On Bursting Bubbles, Budgets, and Beliefs, Oxford University
Press, Oxford, 2014.
9. The Trans-European Automated Real-Time Gross Settlement Express Transfer System
2 (Target2) is the system used by the ECB and the national central banks to manage the intraEU
money transfer. Debts and credits of each central bank toward other central banks of
the EMU are charged by the ECB and transformed into debts or credits of the central banks
toward the ECB. So, the idea proposed by Sinn that the massive debts of Italy and Spain inside
the TARGET2 system are the equivalent of the massive German credit (so a debt Italy and
Spain have with Germany) is not technically correct.
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crucial contribution to the Northern Saints vs Southern Sinners controversy
because it offered a helpful technical insight to validate a feeling deeply
rooted in the public opinion since the early days of the EMU and that saw
at the EMU as a risk for German citizens’ savings. Also, the scientific
contribution of Sinn suggests the EMU impossibility to work as it is and the
difficulties to reform it.
Sinn is not a political activist and his personal contribution remains
confined to the scientific debate. However, Sinn is just the best-known
example of widespread opposition to the euro in the German academy10
.
From this sector of German economics, Bernd Lucke emerged to create
Alternative für Deutschland, the main anti-eurist party in Europe in the early
2010s.
In Italy, anti-eurism draws most of its theoretical bases from the work of
Alberto Bagnai. He proposed an interpretation of Italian economic history
in which the Italian economic decline is explained by the damages and
constraints imposed by the euro. Bagnai defines the Italian membership in
the EMU as a trap organized by Italy’s main competitors (mainly Germany)
to curb Italian economic competitiveness. Also, Bagnai suggests that EMU
membership is a self-powered mechanism that increasingly and irreversibly
reduces Italy’s competition capability11
. So, the only possibility to save the
country from inexorable stagnation and debt slavery is leaving the euro. A
large part of Bagnai’s argumentation does not survive a scientific reading
by experts. However, the narrative style adopted by Bagnai, his work and
success as a blogger, and the need anti-system parties had to give scientific
legitimacy to their economic policy proposals made of Bagnai the leading
theoretician of anti-eurism in Italy and the referee for both the two main
anti-eurist parties in Italy during the 2010s; it means the Lega and the M5S.
In the case of Greece, academic contribution to anti-eurism was
10. However, opposition to the euro in Germany originated many years before. Since
1992 a group of German economists publicly distrusted the Maastricht plan for monetary
integration, and in 1998 160 German economists signed a declaration expressing concern
about the introduction of the euro. Such rooted support for opposition against the euro granted
the initial backing of some academics and industrialists to Alternative für Deutschland. Cfr.
S. Reher, German Euroscepticism: Alternative für Deutschland in 2014, in M. Franklin, J.H.
Nielsen (eds.), The Eurosceptic 2014 European Parliament Elections, Palgrave Macmillan,
London, 2017, pp. 37-56; J. Kim, The Radical Market-oriented Policies of the Alternative
for Germany (AfD) and Support from Non-beneficiary Groups: Discrepancies between the
Party’s Policies and Its Supporters, in «Asian Journal of German and European Studies», vol.
3, n. 6, 2018, pp. 1-24 (in particular p. 12); P. Moreau, Le national-populisme en Autriche
et en Allemagne: approche comparative de l’AfD et du FPÖ, in «Revue d’Allemagne et des
pays de langue allemande», vol. 50, n. 1, 2018, pp. 159-182; L. Rensmann, Radical RightWing
Populists in Parliament. Examining the Alternative for Germany in European Context,
in «German Politics and Society», issue 128, vol. 36, n. 3, 2018, pp. 41-73.
11. A. Bagnai, Il tramonto dell’euro. Come e perché la fine della moneta unica salverebbe
democrazia e benessere in Europa, Imprimatur, Reggio Emilia, 2012.
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anomalous. The country was a laboratory for both anti-eurism and antiEuropeanism.
However, the debate on the problems of the EMU and the
contribution to anti-eurism mainly came in Greece from abroad and moved
from Greece to the rest of the Eurozone, instead of contributing to creating
a robust anti-euro movement in the country. The main contributor to the
debate on the Greek crisis and the euro was the Greek economist and former
Finance Minister Yanis Varoufakis, who acted as the primary economic
expert for Syriza and joined the government when the party gained
power and its leader Tsipras became Prime Minister. The contribution of
Varoufakis to the widespread of anti-eurism is not ispired by a deliberate
rejection of the common currency as in Bagnai. Instead, Varoufakis
emphasize the limits of the EMU and its political consequences. Also, his
contribution is mainly devoted to search for arrangements that can solve
the Greek and the Eurozone crisis12
. However, the Greek crisis’s enormous
echo in the EU public opinion and the visibility offered by Varoufakis
proposals to non-orthodox economists as James Kenneth Galbraith and
new economic theories about monetary economics and budget policies
resulted in the widespread of some elements of the Greek debate to the
anti-eurist literature.
3. Defining anti-eurism and identifying anti-euro parties
A crucial problem in this study is defining what anti-eurism means
and what criteria may be used to distinguish between anti-eurist and nonanti-eurist
parties.
Anti-eurism is here defined as a negative attitude towards the Economic
and Monetary Union and, more specifically, the euro. The intensity of this
attitude became the most important discriminant to identify and classify
anti-euro parties. Many parties criticize monetary integration and the
introduction of a common currency for so many countries with different
economic structures. These critics can be vehement and harsh, but it does
not mean that all these parties propose dismantling the EMU or abandoning
the euro. So, a definition of anti-euro parties can be centred on the level
of opposition to the euro and the party’s political proposals on the topic. A
classification inspired by the system proposed by Taggart and Szczerbiak
for Euroscepticism follows13
.
12. Cfr. Y. Varoufakis, S. Holland, J.K. Galbraith, Modeste proposition pour résoudre la
crise de la zone euro, Les Petit Matins, Paris 2014; Y. Varoufakis, Adults in The Room: My
Battle with Europe’s Deep Establishment, Bodley Head, London, 2017.
13. Cfr. P. Taggart, A. Szczerbiak, Opposing Europe? The Comparative Party Politics of
Euroscepticism, Oxford University Press, Oxford, 2008.
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Table 1: Classification criteria for the levels of anti-eurism in political parties’
programmes
Level of
anti-eurism Abb. Description
Light L These parties ask for reorganizing the euro area and to change the
Maastricht parameters to make EMU rules less stringent.
Medium M These parties propose conceding an opting-out option for those EMU
member-states that ask to exit the euro. However, this option should be
regulated by EU treaties (to be reformed) and do not imply dismantling
the EMU or the abandonment or permanent exclusion of the exiting
countries from the EU and the EMU.
Medium-High M-H These parties propose the abandonment of the EMU by their countries
with or without the approbation of the other member states explicitly.
High H These parties propose dismantling the EMU and, in many cases, the EU
too.
Following the classification proposed above, a party is here considered
anti-eurist when its level of anti-eurism is classified as medium-high to high;
this means that its political proposals about EMU reform or abandonment is
not constrained in the EU treaties framework14
.
This classification, to be applicable, needs identifying affordable
indicators of the anti-eurist nature of the party political proposals. While
public speeches and law proposals can reveal the anti-eurist nature of a party,
the most affordable documents for classification are electoral programmes
and, occasionally, government programmes when released. Also, electoral
programmes are collectively agreed upon by the party leaders and are
specifically written to send electors clear messages and political proposals.
Finally, electoral programmes also indicate the timing of the proposals and
their significance at the time.
Timing is another essential element to consider for a working identification
of the anti-euro parties. Many parties gain consensus thanks to specific issues
that characterize them for a certain period. However, it is possible that the
same issue changes its relevance to the party programme and loses or gains
importance over a while. This is the case for some parties that explicitly
declared their hostility or harsh criticism against the EMU and later softened
their negative feeling for convenience or political programme redefinition15
. In
14. The two categories had been kept separated because this solution permits to trace
better oscillations in the anti-eurist level of parties’ programmes that could change to fit better
with the party’s priorities of the moment.
15. This is the case for the Italian Movimento 5 Stelle (Five Star Movement or M5S), which
could be considered an anti-euro party until the aftermath of its rise in power in Italy in 2018.
However, having to face governmental duties and the ineffectiveness of anti-euro policies, the
M5S softened its anti-euro attitudes drastically. Cfr. P. Franzosi, F. Marone, E. Salvati, Populism
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addition, various anti-euro parties emerged after the start of the international
crisis and collapsed a few years later16
. Therefore it is essential to distinguish
between existing anti-euro parties and defunct anti-euro parties. The former
can still influence politics, while it is helpful to know about the latter in
analyzing political choices in the recent past.
For the reasons given above, in this chapter, the anti-eurism level of a
party has been evaluated referring to electoral programmes (2013-2019),
recent elections (2014-19) and only for parties still at work in January 2019.
Recent data of the Manifesto Project database and the 1999-2014 Chapel
Hill Expert Survey has been used for preparing a list of potentially anti-euro
parties17
. For each of these parties, electoral programmes (particularly those
for the 2014 and 2019 European elections) have been analyzed to determine
the anti-eurism level of the party. Only those with an anti-eurist grade of M-H
and H have been included in the final list of truly anti-euro parties in the EMU
countries (Table 2). However, light and a medium level of anti-eurism can
indicate a potential evolution towards a more radical anti-eurism in the future.
Of course, classifying anti-euro parties requires a certain level of discretion.
Some parties explicitly declare their attitudes toward the euro. Still, in many
other cases, this attitude must be inferred by more general declarations or
as a consequence of different political positions more clearly exposed. The
latter is the case for many far-left wing parties that oppose the whole capitalist
system without declaring a specific position about the euro. However, not
all far-left parties are explicitly proposing the abandonment of the euro and
cannot be considered anti-eurist by default. Some of these parties saw a critical
acceptance of the EMU as a tactical and temporary approach to the matter.
They were resistant to the idea of proposing a radical transformation of the
existing economic structure in the short term. Consequently, there are far-left
wing parties considered soft-anti-eurist or not anti-eurist at all.
Another element that makes it challenging to prepare an exhaustive list
of anti-euro parties in the EMU countries depends on the parties’ evolution.
and Euroscepticism in the Italian Five Star Movement, in «The International Spectator: Italian
Journal of International Affairs», vol. 50, n. 2, 2015, pp. 109-124 (in particular pp. 113-114).
16. A relevant example is the Team Stronach für Österreich, an Austrian party created in
2012 by the businessman Frank Stronach and dissolved in 2017. The party fit the characteristic
of an anti-euro party and gained 11 deputies in the Austrian legislative elections in 2013.
Cfr. J. Schärdel, P. König, Professors, Comedians and Billionaires: An Empirical Analysis
of Newspaper Coverage of New Eurosceptic Parties in Three 2013 National Elections, in
«Comparative European Politics», vol. 15, n. 2, 2017, pp. 310-335.
17. The list includes parties with a value <3 of the indicator ‘Position’ in the Chapel Hill
dataset and a value >3 of the indicator ‘per 110’ in the Manifesto Project dataset. Few other
parties suggested by the literature have been added to the list. Cfr. R. Bakker, E. Edwards, L.
Hooghe, S. Jolly, G. Marks, J. Polk, J. Rovny, M. Steenbergen, M. Vachudova, 2014 Chapel
Hill Expert Survey version 2015.1, available at: www.chesdata.eu (last accessed September 1,
2021); Id., Measuring Party Positions in Europe: The Chapel Hill Expert Survey Trend File,
1999-2010, in «Party Politics», vol. 21, n. 1, 2015, pp. 143-152.
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Although this research is confined to the 2010s, during this period many
parties changed their names, joined with other parties in new parties or
federations, or simply disappeared. Some of them interrupted their activities,
while others changed from party to non-electoral associations18
. Table 2 and
Table 3 only include parties still existing on 1st
January 2019. However, some
anti-euro parties disappeared during 2019. Others started to act as political
movements or proto-parties still in the organization phase, making the
parties’ list need a continuous upgrade19
.
4. Describing anti-euro parties
The most important anti-euro parties are not issue-led parties, and
anti-eurism is just one of their anti-systemic attitudes. The main exception
is the German party Alternative für Deutschland (AfD)20
, which was created
as an issue party devoted to contesting German membership in the European
monetary union. However, after its initial success, the party moved toward
a more complex and far-right oriented political programme, and anti-eurism
became just one of the core political proposals21
.
Notwithstandingtheconcomitanceoftheanti-eurismflameandthediffusion
of populist parties, anti-euro parties are not exclusively populist parties. Most
of them came from the traditional left-right axis and integrated their political
programmes with populist issues and communication methods. So, we must
keep in mind that distinguishing between populist and non-populist parties is
not essential for the study of anti-eurism. In fact, notwithstanding the emphasis
proposed in the academic literature on the transformation of the European party
system due to the rise of populism, the latter is much more a characteristic of
political programmes than a distinguished character of the party22
. Instead, it
18. This is the case of the Italian far-right party CasaPound that changed its nature from
party to movement after discouraging electoral results in the 2019 European elections.
19.An example is the Italian proto-party Vox Italia, led by the anti-euro philosopher Diego
Fusaro, which is attracting members from other far-right parties. Another Italian anti-euro
party was founded in July 2020 by former M5S senator Paragone. After his expulsion from
the M5S he created a party named No Europa per l’Italia – ItalExit con Paragone, which
deliberately aims to drive Italy out of the EU and the euro.
20. Alternative für Deutschland was created in 2012 as Wahlalternative 2013 (Electoral
Alternative 2013). It changed its name to Alternative für Deutschland in 2013. The economist
Bern Lucke became the leader of the party. Cfr. N. Berbuir, M. Lewandowsky, J. Siri, The AfD
and Its Sympathizers: Finally a Right-Wing Populist Movement in Germany?, in «German
Politics», vol. 24, n. 2, 2015, pp. 154-178.
21. Cfr. R. Grimm, The Rise of the German Eurosceptic Party Alternative für Deutschland,
in «International Political Science Review», vol. 36, n. 3, 2015, pp. 264-278; R. SchmittBeck,
The “Alternative für Deutschland in the Electorate”: Between Single-Issue and RightWing
Populist Party, in «German Politics», vol. 26, n. 1, 2017, pp. 124-148; L. Rensmann,
Radical Right-Wing Populists in Parliament, cit.
22. Many of the larger parties defined as populist in the EU are pre-existent parties that
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could be helpful to classify populist parties (or former parties now become
populist) as right-wing and left-wing populists accordingly to their history or
the main issue they deal with in their political programmes. Also, it is essential
to distinguish the traditional far-right parties from the new European far-right.
The latter arose from established parties’ transformation and reorganization
processes and was mainly activated by the economic crisis. These processes
favoured the transition of some former traditional far-right parties to a new
strategy of communication of their political proposals and to hidden neofascist
origins. Meanwhile, other parties that were not originally neo-fascist
moved towards far-right positions, attracted by the opportunity to gain electoral
support. However, it seems that the fake economic we described in the previous
sections is mainly a characteristic of populist parties later accepted and used by
traditional parties that moved toward populism23
.
The list of anti-euro parties proposed in Table 2 allows us to understand
better the nature of these parties and, in part, the origins of their anti-eurist
attitudes. Most of them can be classified according to their position on
the right-left axis. Numerically and in terms of electoral results, the most
relevant anti-euro parties belong to the right and far-right wings. Left and
far-left wing parties constitute the second group, while the remaining few are
from the centre and centre-right wing. Almost all the major anti-euro parties
(Table 3) come from the right/far-right side24
, with the relevant exception
of the Akel party of Cyprus and Cdu in Portugal. Instead, many anti-euro
parties from the centre to the far-left wing are small and unable to gain a
significant share of votes (here considered at least 1 per cent) and seats in the
Parliament (both national and European parliaments).
The predominance of right and far-right wing parties among the anti-eurist
category is not surprising. Euroscepticism and anti-Europeanism had been
widely diffused in that faction for decades. Also, most of the new wave of
populismthatroseinthe2010sfavouredpartiesthatusedpopulardissatisfaction
regarding the economic crisis to reinforce their political programmes. However,
being a far-right party does not mean being anti-eurist by default. There are
relevant cases of far-rightist parties that declare to be Europeanist or not antiEuropeanist
and do not claim anti-eurist proposals25
.Also, it is essential to note
elaborated their political programmes in a populist form. This is the case of the Italian Lega
Nord that moved from regionalism to the far-right populist position or the Front National and
Fratelli d’Italia, two former far-right parties that adopted elements of populism. Probably
populist issues already existed in all these parties, and the situation in the 2010s just suggested
recovering and redefining them for attracting new electors.
23. This hypothesis works for the main populist anti-euro parties but it is still in need of
confirmation for extreme right and left parties.
24. The dimension of parties is evaluated using as an indicator the vote percentage gained
by the party in domestic and European elections. Ten per cent is considered the limit to exceed
to be regarded as a major party among the anti-euro ones.
25. This is the case for Vox, a Spanish party that gained broad electoral support during the
late 2010s. The party supports strident nationalism and other ideas such as anti-Islamism traBORZONI.indd
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197
that there is no complete equivalence between populism, anti-Europeanism
and anti-eurism. Some important new political parties, such as Podemos in
Spain, led their countries’ governments and are considered populist, but not
hard anti-eurist or anti-eurist at all. Besides, other parties such as Syriza in
Greece had bitter conflicts with the EU without moving to hard anti-eurism.
Dis-homogeneity also emerges in the origins of the parties. While some of
them had been founded decades ago (Akel in 1926 and the RN in 1972), others
wereborninthe2000sorlaterasAfD.Moreover,manyofthemhaveexperienced
in the last 20 years a reorganization that has involved political programmes and
have included the adoption of anti-eurism26
. In the case of left and far-left parties,
anti-austerity arguments have reinforced anti-eurism attractiveness27
.
Table 3 shows the major anti-euro parties in the EMU member states.
Apart from the prevalence of the right to far-right parties, dis-homogeneity is
the most relevant characteristic. Some parties experienced drastic changes in
electoral results but in different directions. While the Italian Lega augmented
its votes spectacularly, the PVV lost votes significantly in the 2019 European
elections. Instead, the French RN shows a trend similar to the Italian Lega.
Electoral results for national and European elections (Tables 4 and 5)
suggest different dynamics for anti-euro parties’ results for different EMU
member states, both in national and European elections. Hard anti-euro
parties’ shares of votes in national elections did not change dramatically
during the period 2008-19, apart from the cases of Italy and Germany. In
the European elections, anti-euro parties did not gain many votes during the
period 2009-14. Sometimes, they lost a percentage of the votes, still with
the relevant exception of Italy. Soft anti-euro parties too did not gain more
support in the European Parliament elections during the same period, apart
from Portugal, and in some cases, they lost support.
ditionally defended by far-rightist parties. However, the party programme explicitly affirms
that the party is Europeanist, and anti-euro statements are entirely absent.
26. This is the case for the Rassemblement National in France and Fratelli d’Italia in Italy.
The first changed its original name from Front National to the actual one in 2018 to complete
a transition process from the old neo-fascist party led by Jean Marie Le Pen to the new farrightist
party of his daughter Marine. Fratelli d’Italia is an Italian party, which rose in 2012 as
a successor of Alleanza Nazionale, a far-right party direct successor of the leading Italian neofascist
party Movimento sociale italiano destra nazionale (MSI/DN). Both parties reorganized
their structure and adapted their political programmes to the new context determined by the
crisis. They made anti-eurism and sovereignism two pillars of their political agenda. Cfr.
G. Ivaldi, M.E. Lanzone, From Jean-Marie to Marine Le Pen: Organizational Change and
Adaptation in the French Front National, in E. Heinisch, O. Mazzoleni (eds.), Understanding
Populist Party Organization: A Comparative Analysis, Palgrave Macmillan, Basingstoke,
2016, pp. 131-158; G. Ivaldi, M.E. Lanzone, D.Woods, Varieties of Populism across a LeftRight
Spectrum: The Case of the Front National, the Northern League, Podemos and Five Star
Movement, in «Swiss Political Science Review», vol. 23, n. 4, 2017, pp. 354-376.
27. Cfr. E. Calossi, Anti-austerity Left Parties in the European Union. Competition,
Coordination and Integration, Pisa University Press, Pisa, 2016.
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Table 2: List of Hard Anti-euro Parties in the EMU Countries
Country Acronym Party name (in English) Party name Level28
Austria FPO Freedom Austrian Party Freiheitliche Partei
Österreichs
M
Austria BZO Alliance for the Future of
Austria
Bündnis Zukunft Österreich M-H
Austria EUAUS EU Exit Party for Austria EU-Austrittspartei für
Österreich
M-H
Austria NFÖ Neutral Free Austria
Federation
Bündnis Neutrales Freies
Österreich
H
Belgium VB Flemish Block Vlaams Belang H
Cyprus AKEL Progressive Party of Working
People
Ανορθωτικό Κόμμα
Εργαζόμενου Λαού
M-H
Estonia EIP Estonian Independence Party Eesti Iseseisvuspartei H
Finland PS True Finns Party Perussuomalaiset M-H
France RN National Rally Rassemblement National
(ex Front national)
M-H
France PG Left Party Parti de Gauche M-H
France NPA New Anticapitalist Party Nouveau Parti
anticapitaliste
H
France DLF France Arise Debout la France H
France LO-LCR Workers’ Struggle –
Revolutionary Communist
League
Lutte Ouvrière/Ligue
communiste révolutionnaire
H
France FI France insoumise Unbowed France M-H
Germany NPD National Democratic Party of
Germany
Nationaldemokratische
Partei Deutschlands
H
Germany AFD Alternative for Germany Alternative für Deutschland H
Germany REP The Republicans Die Republikaner M-H
Germany LKR Liberal Conservative
Reformers
Liberal-Konservative
Reformer (formerly
Allianz für Fortschritt und
Aufbruch, Alfa)
H
28. Level of anti-eurism: H= high; M-H= medium to high.
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Country Acronym Party name (in English) Party name Level28
Greece KKE Communist Party of Greece Kommounistikó Kómma
Elládas
H
Greece XA Golden Dawn Laïkós Sýndesmos – Chrysí
Avgí
H
Greece ANTARSYA Front of the Greek
Anticapitalist Left
Antikapitalistiki Aristeri
Synergasia gia tin Anatropi
H
Greece EPAM United Popular Front Ενιαίο Παλλαϊκό Μέτωπο M-H
Greece LAE Popular Unity Laïkí Enótita H
Italy LN Northern League Lega Nord H
Italy Casa Pound Casa Pound H
Italy FN New Force Forza Nuova H
Italy PCL Workers’ Communist Party Partito comunista dei
lavoratori
H
Italy PDCI/PCI Party of Italian Communists
(now Italian Communist
Party)
Partito dei Comunisti
Italiani (now Partito
Comunista Italiano)
H
Italy FDI Brothers of Italy Fratelli d’Italia M-H
Italy RC Communist Refoundation
Party
Partito della Rifondazione
Comunista
H
Latvia LSP Socialist Party of Latvia Latvijas Socialistiska partija M-H
Luxembourg KPL Communist Party of
Luxembourg
Kommunistesch Partei
Lëtzebuerg
H
Netherlands PVV Party for Freedom Partij voor de Vrijheid H
Netherlands FvD Forum for Democracy Forum voor Democratie H
Netherlands SP Socialist Party Socialistische Partij H
Portugal CDU Unitary Democratic Coalition Coligação Democrática
Unitária
H
Portugal PCTP/MRPP Portuguese Workers’
Communist Party/
Reorganized Movement of
the Party of the Proletariat
Partido Comunista dos
Trabalhadores Portugueses/
Movimento Reorganizativo
do Partido do Proletariado
H
Slovakia KSS Communist Party of Slovakia Komunistická strana
Slovenska
H
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Table 3: Selection of the Major Anti-euro Parties in the EMU Member States29
Country Acronim Party name Position30
Votesinmostrecent
nationalelections31
(%,)
VotesinEuropean
Election2014
(%atnationallevel)
VotesinEuropean
Election2019
(%atnationallevel)
SeatsintheEuropean
Parliament(2019)
Belgium VB Flemish Block
(Vlaams Belang)
FR 12.0 4.3 11.7 3
Cyprus AKEL Progressive Party
of Working People
(Anorthotikó Kómma
Ergazómenou Laoú)
FL 25.7 27.0 27.5 2
Finland PS True Finns Party
(Perussuomalaiset)
R-FR 17.5 12.9 13.8 2
France RN National Rally
(Rassemblement
National)
R-FR 13.2 24.9 23.3 22
Germany AfD Alternative for
Germany (Alternative
für Deutschland)
R-FR 12.6 7.1 11.0 11
Italy LN Northern League
(Lega Nord)
R-FR 17.4 6.2 34.3 28
Netherlands PVV Party for Freedom
(Partij voor de
Vrijheid)
R-FR 13.0 13.3 3.5 0
Portugal CDU Unitary Democratic
Coalition (Coligação
Democrática Unitária)
L-FL 6.3 13.7 7.41 2
29. Source: www.europarl.europa.eu/election-results-2019/en.
30. FR = Far Right; FL = Far Left; R-FR = Right to Far Right; L-FL = Left to Far-Left.
31. National elections held between 2015 and 2019.
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Table 4: Electoral Results of the Anti-euro Parties in the EMU Member States:
European Parliament32
Hard anti-euro parties Soft anti-euro parties
2019 2014 2009 2019 2014 2009
Austria 0.00 0.47 4.58 17.20 19.72 12.71
Belgium 11.68 4.26 9.85 5.57 2.47 0.43
Cyprus 27.49 26.98 34.90 0.00 0.00 0.00
Estonia 0.00 0.00 0.00 0.00 0.00 0.00
Finland 13.80 12.90 9.79 0.00 0.00 0.00
France 33.94 30.24 14.15 2.49 6.33 6.00
Germany 11.40 8.50 1.32 7.70 8.90 9.16
Greece 11.42 17.08 9.24 25.78 32.72 11.85
Ireland 0.00 0.00 0.00 0.00 1.81 2.76
Italy 43.81 13.85 16.30 17.06 21.15 0.00
Luxembourg 1.14 1.49 1.54 0.00 0.00 0.00
Netherlands 17.86 22.92 24.07 10.85 11.88 10.28
Portugal 8.23 15.38 11.84 15.80 7.03 12.22
Slovakia 0.00 1.51 1.65 0.00 0.00 0.00
Spain 0.00 0.00 0.00 10.07 9.99 3.71
Table 5: Electoral Results of the Hard Anti-euro Parties in the EMU Member States:
National Parliaments33
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Austria 10.70 - - - - 3.51 - - - - - Belgium
- - 7.80 - - - 3.70 - - - - 12.00
Cyprus - - - 32.70 - - - - 25.70 - - Estonia
- - - 0.40 - - - 0.20 - - - Finland
- - - 19.00 - - - 17.60 - - - 17.50
France - - - - 21.61 - - - - 26.12 - Germany
- 2.20 - - - 6.20 - - - 13.00 - Greece
- 8.16 - - 12.03 - - 17.08 - - - 8.48
Ireland - - - - - - - - - - - Italy
8.60 - - - - 6.36 - - - - 24.60 Luxembourg
- 1.40 - - - 1.60 - - - - 1.30 Netherlands
- - 25.40 - 19.70 - - - - 23.90 - Portugal
- 7.90 - 7.90 - - - 8.30 - - - 6.30
Slovakia - - 0.80 - 0.70 - - 0.00 0.62 - - Spain
- - - - - - - - - - - -
32. Source: www.europarl.europa.eu/election-results-2019/en/national-results-overview/
33. Source: eed.nsd.uib.no/webview/index.jsp?study=http://129.177.90.166:80/obj/fStudy/
ATEP2009_Display&node=0&mode=cube&v=2&cube=http://129.177.90.166:80/obj/
fCube/ATEP2009_Display_C1&top=yes
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202
5. Explaining the rise of anti-euro parties
Intuitively, the politicization of such a technical and financial issue as
the euro suggests a strong relationship between the rise of anti-eurism and
the economic crisis, a relation very similar to the ones suggested by many
authors for the rise of populism and anti-Europeanism34
.
Surprisingly, the severity of the economic crisis does not seem to be
exhaustive in explaining the rise and consolidation of anti-euro parties.
Apart from Italy, Cyprus and Portugal, in not one of the other countries most
affected by the sovereign debt crisis or the austerity measures imposed by
the Troika rescue plans, is there a powerful anti-euro party. In Greece, hard
anti-euro parties did not gain such electoral strength as to create or joining a
government. The far-right party Golden Dawn gained electoral consensus in
Greece as a consequence of the crisis, but its success was not so spectacular
as the rise of SYRIZA35
. Golden Dawn it was never close to gaining power
as happened for ANEL, a small soft anti-euro party that joined SYRIZA and
the government after the first 2015 Greek elections. In Spain and Ireland,
no hard anti-euro parties emerged, and anti-eurism did not gain relevant
support in Spain despite many new parties appearing during the 2010s and
won votes because of the crisis. Explaining the weakness or irrelevance
of hard anti-euro parties in countries so dramatically touched by the crisis
and austerity measures remains a relevant question for future studies on
anti-eurism in Europe.
The strength of anti-euro parties in Cyprus and Portugal could appear an
obvious consequence of the crisis. However, the two main anti-euro parties in
those countries,AKEL and the CDU, are traditional parties established decades
ago. Probably they adopted anti-eurism as part of an electoral programme
updating strategy to fit better the new political context created by the crisis.
The case of Italy is particular. Although Italy never had to surrender to the
Troika or ask for a rescue plan, the impact on the country of economic and
sovereign debts crisis was devastating. It opened the doors to the spectacular
electoral success of the Movimento 5 Stelle and the increase of votes for the
Lega and Fratelli d’Italia, the two main anti-euro parties in the country at that
34. H. Kriesi, E. Grande, The Euro Crisis: A Boost to the Politicization of European
Integration, in S. Hutter, E. Grande, H. Kriesi (eds.), Politicising Europe, Cambridge
University Press, Cambridge, 2016, pp. 240-276; L. Morlino, F. Raniolo, The Impact of the
Economic Crisis on South European Democracies, Palgrave Macmillan, London, 2017.
35. G. Bistis, Golden Dawn or Democratic Sunset? The Rise of Far Right in Greece,
in «Mediterranean Quarterly», vol. 24, n. 3, 2013, pp. 35-55; A.A. Ellinas, The Rise of
Golden Dawn: The New Face of the Far Right in Greece, in «South European Society and
Politics», vol. 18, n. 4, 2013, pp. 543-565; Id., Neo-Nazism in an Established Democracy: The
Persistence of Golden Dawn in Greece, in «South European Society and Politics», vol. 20, n.
1, 2015, pp. 1-20; M. Spourdalakis, The Miraculous Rise of the “Phenomenon Syriza”, cit.;
Y. Stavrakakis, G. Katsambekis, Left-wing Populism in the European Periphery: The Case of
Syriza, cit.
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203
time36
. In 2019 European elections, the Lega duplicated its votes and became
the larger party in Italy and the main anti-euro party in the EMU.
Italy’s case is salient for another reason. In fact, Italy was the first and
only EMU member-state that experienced an anti-eurist government. In
Greece, Syriza and ANEL, here classified as soft anti-euro parties, joined
in a government that never proposed anti-eurism as an option and fought to
avoid expulsion from the euro area. Instead, in 2018 in Italy, a coalition of
two anti-euro parties (the Lega and the Movimento 5 Stelle) gained power. It
established a government in which echoes of anti-eurism were relevant and
inspired a challenging attitude against the EU37
.
The case of “Nordic anti-eurism” also suggests that austerity policies
and the reaction against Troika constraints cannot explain anti-eurism
exhaustively. The Flemish Block, True Finns Party (Perussuomalaiset),
Alternative for Germany, and the Party for Freedom (Partij voor de Vrijheid)
gained relevant electoral consensus even though the crisis only had a limited
impact on their countries in comparison with Southern Europe and recovery
started earlier38
. However, these parties adopted anti-eurism as a relevant point
in their electoral programmes or, astonishingly, introducing for the first time
the issue in EU politics as Alternative for Germany have done since 2013.
Nordic anti-eurism may be interpreted as a mirroring of Southern European
anti-eurism inspired by the so-called Northern Saints vs Southern Sinners
contrast rooted in creditor countries’ public opinion. So, the politicization
of the euro in Northern Europe could be boosted by fears of having to pay
for the other EMU members’ crises. This fear made the euro and anti-eurism
a sensitive political issue that populist parties emphasized to reinforce their
political programmes and legitimize their anti-system attitude.
However, this explanation fits poorly with the case of Alternative for
Germany. The party had a crucial role in diffusing anti-eurism and the
German version of opposition to monetary integration in other EMU
countries. Therefore, it was not an attempt to reinforce a populist political
programme in attracting AfD towards anti-eurism. In fact, AfD was created
as an issue party mainly concentrated on the euro and its problems. Instead,
probably it was the success of Alternative for Germany in inducing populist
36. R. D’Alimonte, How the Populists Won in Italy, in «Journal of Democracy», vol. 30,
n. 1, 2019, pp. 114-127.
37. The Movimento 5 Stelle was classified as a soft anti-euro party in 2019, but it has
been a mid to highly anti-euro party since its rise in power. Later, the party abandoned
anti-euro arguments to propose more moderate economic policy measures. Cfr. R. Di
Quirico, Challenging the Euro: The politics of anti-Euro parties in Italy during the first Conte
government, in «Contemporary Italian Politics», vol. 13, n. 1, 2021, pp. 64-80.
38. Cfr. N. Hatakka, When Logics of Party Politics and Online Activism Collide: The
Populist Finns Party’s Identity under Negotiation, in «New Media & Society», vol. 19, n. 12,
2017, pp. 1-17; R. Heinisch, O. Mazzoleni (eds.), Understanding Populist Party Organisation,
cit., pp. 19-47.
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204
parties in other Northern European countries to include explicit anti-eurist
proposals in their political programmes.
The dichotomy between Southern and Northern anti-eurism suggests
different economic rationales and different versions of economic ideologies
for anti-euro parties in the two sides. While in Southern Europe, anti-eurism
is a crucial passage to challenge fiscal constraints that block deficit spending
policies usually proposed by anti-systemic parties to solve the economic
crisis, in Central and Northern Europe, anti-eurism is part of a nationalist
economic programme inspired by distrust toward “Southern Sinners” and
the effectiveness of European economic governance in compelling them
to respect the rules and avoiding discharging the costs of their poor fiscal
discipline on the virtuous people of the North39
.
A problem that remains unexplained by the North-South paradigm is
the rise of anti-eurism in France. Neither the rescue plans and anti-austerity
policies, nor the fear to be damaged as a creditor country, can explain
anti-eurism in France and its political relevance. France’s financial position
was more balanced than both the Southern EMU countries and the Northern
ones. The country did not have to face any dramatic sovereign debt crisis
or rescue plans. At the same time, there was no enthusiastic support among
French people for austerity measures in the Southern EMU, probably
because of the risk of having them extended to France in case of financial
troubles. So, the Saints vs Sinners dichotomy works poorly in France.
Probably, the RN adopted anti-eurism to integrate its anti-Europeanism in a
more sophisticated electoral programme.Also, the RN alliance with the Lega
made fierce anti-eurism a point of convergence for a shared platform for
the possibly rising new European sovereignist far right. However, both the
Lega, when in charge in the Italian government and the Front National (now
RN) after Le Pen’s defeat in the 2017 French presidential elections, softened
their anti-eurism. While in Italy, government responsibilities explain a more
cautious approach of the Lega to the euro issue, in France, this change has
been explained as a consequence of French savers’ hostility against policies
that could endanger their savings40
.Again, anti-eurism appears as a rhetorical
tool used to attract voters and is dismissed when it contrasts with other party
priorities or is unuseful for electoral aims.
39. It is curious to note that the same North-South paradigm based on the virtues of
Northern people and the vicious way of life in the South was the core of the Lega Nord
programme in the 1980s and 1990s.
40. In Italy, popular support for anti-eurism was hit severely by the failure of the Tsipras
attempt to resist the Troika requests in summer 2015. The dramatic situation of Greek savers
made Italians more cautious about the euro issue, and anti-euro leaders softened their tones on
the matter for a couple of years. Cfr. S. Pattanaik, French Savers Are Likely to Reject Le Pen’s
Anti-Euro Message, available at: www.nytimes.com/2017/05/03/business/ dealbook/marinele-pen-france-euro.html
(last accessed September 1, 2021); R. Di Quirico, Challenging the
Euro, cit.
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205
Purely economic or geographical explanations do not permit an exhaustive
explanation of the rise of anti-euro parties as a single phenomenon. They
suggest common elements that can apply to some countries, but with different
relevance for each of them and not for all those countries touched by the
phenomenon of anti-eurism.
The same conclusion works for ideological roots. Anti-eurism can be
explained as a consequence of nationalist or Marxist-Leninist ideology
adopted by many anti-euro parties and confirmed by their distribution in
the right/far-right and left/far-left wings. However, this is not a generally
applicable explanation because some anti-euro parties, particularly those
most recently created, adopted it when they were not ideologically well
defined.
While there are various explanations for the rise of certain anti-euro
parties and the adoption of anti-eurism by others, it seems there are no single
explanations that work for all anti-euro parties. However, pieces of evidence
suggest that the rise of anti-eurism can be explained as a process resulting
from the interaction between other processes.
We hypothesize here that the redefinition of party programmes imposed
by the impact of monetary integration and the resulting politicization of
the monetary issue made latent anti-eurism already included in traditional
extreme wings parties more salient. So, the rising hostility towards the
pervasiveness of EMU rules and, later, the impact of the international crisis
magnified the relevance of anti-eurism in the political programmes of those
parties that already encapsulated other elements of anti-Europeanism.
The sovereign debt crisis and the enlargement of the ideological bases
of anti-eurism to non-extreme wing parties, testified by the activities of
various liberal economists and the rise of AfD, liberated anti-eurism from
strict dependence on extreme parties and ideologies. This made anti-eurism
acceptable and relevant for the new parties, which surged after the early 2010s
crisis. Meanwhile, the solid arguments of early anti-eurism offered to former
far-right parties elements to redraw their political programmes, redefining
concepts and political proposals usually considered characteristic of the
far-right parties in a more moderate version41
. This permitted the recovery
of elements of anti-Europeanism, reinforcing them with what looked like
scientific arguments, in particular economic ideologies. In other words,
anti-eurism contaminated various parties, all of which were in search of new
political proposals to attack mainstream parties in government and eroding
their electoral base.
41. An example of this conceptual redefinition is the adoption of sovereignist ideology
that permits the new far-right to avoid using words and concepts like “nationalism” and “antiEuropeanism”,
usually adopted by traditional far-right parties. This helps the new populist
parties draw votes in the electoral basin of traditional far-right parties or attract support from
people usually hostile to neo-fascist movements.
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206
On the other hand, the prevalence of right/far-right parties among the
major anti-euro parties does not depend only on the nature of anti-eurism.
Both the case of AfD and the Lega show that these parties were dragged
towards the far-right by their political success or internal reorganization
dynamics42
. Meanwhile, the decline or moderate relevance of anti-eurism
in left and left-populist parties may be explained by the rise in power of the
most important of them and their need to change their political approach
from anti-systemic to intra-systemic, sometimes splitting from the extremist
wings more prone to anti-eurism43
. Thus, a transformation process interacted
with anti-eurism diffusion as part of a general process of party reorganization.
Besides, some anti-euro parties developed strict contacts and co-operated
at the international level. Then, anti-eurism became a point of convergence
that helped coordination and compatibility in political programmes. In
particular, anti-eurism fitted well with sovereignism, a concept that became
the ideological base of the new European far-right.
So, it could be hypothesized that it was the ideological versatility of
anti-eurism and its fitting with the need of new populist parties and extremewing
parties to consolidate the digital channel of political participation and
consensus attraction to explain the success of anti-eurism and its adoption
by many parties in many countries. As Marxist economics or neoliberalism
were the ideological frameworks of so many parties in Europe in XX century,
so the ideological framework of “fake economics” created by few influential
authors permitted to adapt different forms of anti-Europeanism and further
collective interests in other parts of the EU to a common strategy of attraction
of digital citizens. The latter searched for an economic coherence capable of
justifying new political proposals advanced by the new populist and antisystem
parties. The block of anti-eurist fake economics offered a useful
ideological framework for both populist and traditional anti-system parties.
42. Both the Lega Nord under the rule of its founder Bossi and AfD during the Lucke
leadership kept their distance from the far-right even though they supported policy proposals
similar to the far-rightists’ ones and attracted support from that electoral pool. It was
prevalently under their successors (Matteo Salvini in Italy and Frauke Petry in Germany) that
both parties moved towards declaring new far-right positions and won even larger support
from traditional or ‘unconscious’ far rightists. Cfr. F. Decker, The “Alternative for Germany”:
Factors behind its Emergence and Profile of a New Right-Wing Populist Party, in «German
Politics and Society», vol. 34, n. 2, 2016, pp. 1-15; L. Rensmann, Radical Right-Wing
Populists in Parliament, cit., pp. 53-57.
43. This was the case for the Greek party Popular Unity (Laïkí Enótita) which in 2015 split
from Syriza and adopted anti-eurism. In Germany, something similar happened where Lucke
abandoned AfD in 2015 to create a new party named Liberal-Konservative Reformer. See L.
Rensmann, Radical Right-Wing Populists in Parliament, cit., p. 46. In this case, the new party
was a moderate one and the split also depended on the transition of AfD towards the far right.
In France also, the anti-euro extremist wing of the then Front National led by Florian Philippot
left the party. This suggests that the RN could soften its anti-eurism. Cfr. S. Bastow, The Front
National under Marine Le Pen: A Mainstream Political Party?, in «French Politics», vol. 16,
n. 1, 2018, pp. 19-37.
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207
6. Conclusions
Anti-eurism and the fortune of anti-euro parties derived from the
combination of 3 processes, all activated by the International crisis in
general and the Eurozone crisis in particular. The “digitalization” of political
participation and debates through social media and blogs involved electors
in complex economic matters they poorly understand. This opened vast
space for misleading personal interpretations (sometimes based on academic
literature) and deliberate manipulation by opinion makers and political
leaders. They built “economic ideologies” based on fake news, misleading
and disorientating analysis, and simplistic policy proposals that attracted
“digital electors” toward new or reorganized parties. The latter adopted
many elements of the “fake economics” elaborated and diffused in the social
media and blogs. Anti-eurism was one of the most successful among these
rhetorical elements mainly because it was so flexible to adapt to opposite
policy proposals depending on the party and the country where the proposal
has to attract voters. As a rhetorical tool, anti-eurism was easily dismissed or
softened when new issues or government duties required a more realistic and
pragmatic approach to the EU and EMU.
The Covid-19 pandemic was a decisive element in dismissing anti-eurism
in the EU countries, particularly those more touched by the economic slump
caused by the pandemic. However, anti-eurism remains a powerful rhetorical
tool for the future when the emergency will leave the room for restoring
the EU economic governance and the Stability and Growth Pact, and rules
derived by the Next Generation EU recovery plan will have to be respected.
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