Challenging the Euro: The politics of anti-Euro parties in Italy during the first Conte government

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

Disclosure statement

No potential conflict of interest was reported by the author.

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 well-known 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 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’.

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.

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Roberto Di Quirico

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.