Expensive government plans in Rome

The right-wing populist Lega Nord and the protest movement Cinque Stelle have signed a coalition agreement in Italy. The key points: renegotiation of the EU treaties, debt relief for Rome, tax cuts, a basic income and the repeal of the pension reform. Commentators fear Italy is heading towards a confrontation with the EU - and financial disaster.

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La Repubblica (IT) / 18 May 2018

Italy will leave itself isolated

Italy can't afford to adopt a Eurosceptical stance, rails Daniele Bellisario, foreign affairs expert for La Repubblica:

“The foreign policy of Lega and Five Star is based on the illusion that Italy will gain clout by being obstructive, that the defence of national interests requires not just an autonomous course but one that diverges from or even runs counter to that of Europe. Such sovereigntism is, however, not just a mistake for Italy but a luxury we cannot afford. In addition to the mountain of debt in public finances it will add a deficit in respectability in the bodies where decisions that affect Italy are made: economy, migration, infrastructure, security, aid funds. For Italy being obstructive means ending up isolated.”

The Economist (GB) / 18 May 2018

Who foots the bill?

The economic programme of the prospective new government in Rome is dreadfully misguided, The Economist warns:

“The pity is that neither the League nor M5S offers solutions to Italy's real problems. Italian productivity has scarcely risen since 2001. (In Germany it is up by 16%; in Romania, by 134%.) To put this right will require loosening labour laws, reforming the courts, investing in education and infrastructure, and attacking corruption. Although the League and M5S pay some attention to these issues, their chief plan seems to be a huge burst of stimulus from tax cuts and handouts, financed by wishful thinking.”

Ilta-Sanomat (FI) / 18 May 2018

Headaches for Berlin and Brussels

Ilta-Sanomat voices concern about the impact the government in Rome could have on EU reform processes:

“A relatively radical and openly Euro-critical government in the third-largest Eurozone member would give Europe's elites a whopping headache. The new government's downright costly economic programmes run counter to the EU treaties and will no doubt annoy not only Brussels but also Berlin - even if the parties that were only recently arguing in favour of exiting the Eurozone have now promised 'not to question' the single currency. With such a government in power it is hard to imagine that Germany would agree to a single reform that could be interpreted as an extension of mutual responsibility.”

La Stampa (IT) / 16 May 2018

The North is delighted

La Stampa warns that

“the most recent excesses and the anti-Europe rhetoric of Matteo Salvini and Luigi Di Maio could give the countries of Northern Europe exactly the alibi they need for the upcoming EU summit. Because they want to prevent the European Union from pushing ahead with integration and breaking new ground, in particular regarding the banking union and the mutualisation of deposit insurance. But we all know two things: these reforms are above all in our interest, and if we bungle the summit in June the topic will be shelved for the next three years. So that would be self-destructive behaviour. In any event, the northern countries are rubbing their hands in glee. They can block a project that would benefit us - and then pin the blame on Italy.”

Les Echos (FR) / 16 May 2018

Tailwind for France and Macron

The Italian debacle has a silver lining, Les Echos points out:

“The Italian horror scenario does have one advantage: it once again highlights France's position between a Germany and northern Europe that are hostile to any form of transfer payments within the Eurozone and an Italy whose new leaders vilify the European regulations and dream of exiting the euro. ... If a populist government similar to the ones in Eastern Europe now forms in Italy, the pressure on Angela Merkel will grow. And it could push her - let's hope it does - to accept certain reform projects put forward by Emmanuel Macron.”

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