Italy Finds Itself in Another Deadlock
Image courtesy of Dario Veronesi via Unsplash
On the eve of the elections for Italy’s new prime minister, news outlets worldwide reported about Giorgia Meloni’s likely election into power and worried of a subsequent wave of far-right policies that would be enacted in Italy in case of a successful election. And while Meloni proved to be successful and was sworn into office in late October, Italy has since been running almost the same way as before. Naturally, Meloni has not been fully immobile, with the Prime Minister quickly proposing reforms that would slash unemployment benefits and greatly curb immigration. However, this is far from the wave that both the public and the media was bracing for. While some of the silence is simply due to the short timespan that Meloni has been in power, there have been plenty of actors that have come in the way of new reforms being implemented. Mainly, Italy’s political scene is facing a three-way deadlock from Meloni’s own political coalition, the Chamber of deputies, and even the European Union.
Because Meloni was able to rise to the role of Prime Minister by creating a coalition to form a majority government, her biggest achievement can quickly turn into an astounding weakness. Other notable parties in her right-wing coalition, such as Forza Italia and Lega, can easily leverage their seats in parliament to remove said majority. Granted, this has been true for any coalition government in Italy since the country became a Democratic Republic in 1946. However, the current leader of Lega Matteo Salvini already started threatening to abuse this mechanic if he was not assigned a significant role in Meloni’s government less than a month after Meloni took power. Salvini’s threat to remove his party from the election-winning coalition and to call for a vote of confidence granted him a spot as both the Minister of Infrastructure and the vice president of Meloni’s government. Most of the left wing parties currently represented in the chamber of deputies are also waiting for the coalition to collapse so they can swiftly remove Meloni from power.
In addition to the domestic strife, Meloni’s inaction is also partially due to the few objections brought forth by the European Union. These objections hold particular weight because of the European Union’s threat to withhold hundreds of billions of Euros in Recovery funds theoretically destined to aid Italy’s damaged economy. Through the Recovery Fund, the European Union has been able to centralize its decision making power by threatening to not fund countries that act out of line. Just in December 2022, when Meloni was about to remove the obligation for all businesses to accept card payments, the European Union prevented her from doing so on the grounds that all European Union member states are forced to comply with that law in an attempt to reduce tax evasion.
Because of said conflicts both on the international and domestic level, all Meloni can really do is wait until the European Union grants Italy its much needed funds. This stalling will not fare well with any hope held by the country to make a financial recovery through the funds, as the Italian economy has not made any significant growth since adopting the Euro in 1999. Landmark events like the 2008 financial crisis alongside the country’s total lockdown in 2020 have only exacerbated Italy’s conditions, with the country boasting one of the worst economic growths, labor productivity, and education system amongst its European peers.
To address these problems, Italy has planned to invest roughly 180 billion euros in reforms aimed at modernizing the country. Some examples of these reforms include accelerating Italy’s lagging digitalisation, facilitating its transition to greener energy resources, and addressing key macroeconomic challenges like its low labor market participation and the aforementioned sluggish economic growth. Given that the European Union is requesting all countries to make use of the funding by 2026, it is highly likely that Meloni’s government will be the one executing the recovery plans which were drafted by her technocratic predecessor Mario Draghi. Hopefully, the upcoming cascade of reforms spurred by the recovery fund will be the key necessary to unlock the ongoing stalemate between Meloni and her opposition.
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