The New Geopolitics of Energy
Last month, Matteo Salvini, leader of Italy’s right-wing populist Lega party, attempted a Machiavellian power move. Hoping to take advantage of his soaring popularity, he brought down his own government, with the clear intention of forcing elections that would return him as Italy’s uncontested strongman. To his own and most Italians’ surprise, his jilted coalition partner, the Five Star Movement, turned around and formed a new government with the center-left Democratic Party (DP), until then the government’s principal opposition.
And so Salvini had transformed what appeared as a moment of historic triumph for the right into a major opportunity for the left. Salvini had committed what the Italians call an autogol, a soccer term for accidentally kicking the ball into your own net.
“The idea of saving our country from a swerve into dangerous populism based on hatred prevailed,” said Nicola Zingaretti, the secretary of the Democratic Party. When the new coalition was announced, many commentators breathed a sigh of relief that Italy had prevented what some feared would be the “Orbanization” of Italy, or the emergence of a far-right government, led by Salvini, that would follow the neo-authoritarian model of Hungarian Prime Minister Viktor Orban.
But whether the new government halts the rise of right-wing populism more than temporarily will depend on its ability to improve Italy’s standard of living and reverse some negative trends that have made the country one of the weaker links in the European Union. To fix all this would be a tall order for any government, let alone one composed of two parties—each riven by serious internal divisions—that were bitter rivals until a few weeks ago. In other words, if Italy does not begin to address the problems that paved the way for Salvini’s ascendancy, the country will have him to contend with whenever elections are held next.
In the early 1990s, Italy’s GDP was on a par with that of the United Kingdom. Now it is more than 30 percent smaller. In fact, it is still about 10 percent below what it was before the financial crisis of 2007–08. Since the crisis, Italy has also become the favored destination for refugees looking to reach Europe from North Africa. In 2012, only 13,267 illegal immigrants arrived in Italian ports. That number rose to 170,000 in 2014 and 181,436 in 2016. At the same time, nearly as many younger Italians were leaving the country to seek their fortunes elsewhere—a serious brain drain that reflects widespread pessimism among many Italians about their future.
Salvini has transformed what appeared as a moment of historic triumph for the right into a major opportunity for the left.
Although migration into and migration out of Italy were causally unrelated, together they created, for the average Italian, the impression of a country headed in the wrong direction. This malaise provided the perfect opportunity for Salvini, who campaigned with the Trumpian slogan “Italians first!” and promised to put a stop to illegal immigration. It also fueled Five Star, an antisystem party founded by the comedian Beppe Grillo, to wage a long “Up Yours!” campaign against Italy’s political establishment.
The face of that establishment was the DP, the main party in power between 2013 and 2018. Successor to the old Italian Communist Party, the DP had over time become the party of fiscal responsibility. In government, it had tried desperately to reform the Italian economy while respecting the spending restraints imposed by Brussels and European banks, imposing austerity measures that sapped its popularity.
In the national elections of 2018, Five Star emerged as Italy’s largest party, with more than 32 percent of the vote. Salvini’s Lega won 17 percent of the vote, up from four percent in 2013, and emerged as the natural junior partner in a Five Star–Lega coalition. Once in government, however, Salvini stole center stage. He shrewdly demanded for himself the position of minister of the interior and began turning back boatload after boatload of refugees, enraging humanitarian organizations but gaining credit with his fellow Italians.
On the strength of his increased popularity, Salvini was able to push his coalition government further to the right. He was also able to split the base of Five Star, a heterodox movement made up of disillusioned leftists, disaffected young people, and older working-class voters angry about trade and the European Union—a mix of Bernie Sanders and Donald Trump voters, in American terms.
The change in the balance of power became apparent in the European elections held in May. Lega nearly doubled its share of the vote, taking 34 percent, while Five Star dropped to 17 percent. On the strength of this result, in what some have described as “a delirium of omnipotence,” Salvini brought his own government down on August 8. He assumed that new elections would follow, in which he would emerge as the most powerful politician in Italy.
He had forgotten that in the current Italian Parliament, Five Star and the DP have more than enough seats for a working majority. And although their coalition is a marriage of convenience, the match is less unlikely than it might appear. More Five Star voters identify with the left than the right. The DP had desperately sought an alliance with Five Star in 2013, but Five Star contemptuously rejected the entreaty, forcing the DP to govern with former Prime Minister Silvio Berlusconi’s Forza Italia. Five Star’s move was a cynical one at the time, based on the calculation that a left-right coalition would have trouble governing and that its failings would discredit the DP with the public. But once Five Star’s own popularity tumbled, the party was more than ready to bargain.
Salvini’s unforced error may yet work to his advantage. The advent of a new government saves him from having to own the modest results of his coalition’s 14 months in power. Although the problems that propelled his rise were real enough, his solutions were largely empty demagoguery.
Turning back immigrants proved much easier than jump-starting the Italian economy. The centerpiece of Lega’s economic plan was to lower Italy’s retirement age from 66 and in some cases to encourage workers to retire in their late 50s or early 60s. The intention was to free up jobs for younger people, but reducing the retirement age in a rapidly aging society is a catastrophically poor idea. A diminishing number of younger workers would then have to support an increasingly large number of retirees. To simultaneously stanch the flow of immigrants, who are generally of working age, pushes folly into madness. Rather than grow, the Italian economy began to shrink during the 14 months of Five Star–Lega government.
The new Five Star–DP government can fix this situation only at great risk. Italy’s national debt is 132 percent of its GDP—about 50 points higher than the EU average—leaving the country very little margin for borrowing or spending to stimulate growth. Italy spends about half of what other industrialized nations do on research and development. Only 23 percent of Italians graduate from university, compared with 33 percent of Americans and 40 percent of British citizens. At the same time, Italy’s personal tax rates are among the highest in the world. Reversing the country’s economic decline before the next scheduled elections, in 2023, will be a herculean task. The job would be difficult even for a unified government with a powerful mandate, let alone one comprising two parties with a long history of mutual distrust.
Yet the Italian electorate may soon forget the mediocre performance of the Lega–Five Star government. In 1994, Berlusconi—the rising populist of that era—became prime minister. Several months later, his coalition partner, Lega, pulled the rug out from under him and formed a government with the left. Many gloated. “The effect of his seduction dance is wearing out,” said Marco Formentini, the mayor of Milan, while lifting a glass of champagne during a 1994 Christmas toast. The journalist Indro Montanelli, however, warned that the Italians had not yet had enough exposure to Berlusconi to build up an immunity to him. He was right: Berlusconi was reelected in 2001 and again in 2008.
One external factor that could make an important difference in Salvini’s fortunes is the European Union. The leaders in Brussels would make a serious mistake if they assume that they can return to business as usual now that an EU-friendly government is back in place. In part, right-wing populism has grown because the social compact within many European countries has broken down. Tone-deaf EU bureaucrats have appeared more concerned with fiscal rigor than the quality of life in member countries. They have had little patience with countries such as Italy that have struggled to meet EU deficit targets. At the same time, the EU has left Italy (and other frontline countries such as Greece) alone to contend with mass migration from Africa.
In order to seriously undercut Salvini—and those like him—Europe must revisit the Dublin Regulation, which established that demands for asylum must be handled by the countries in which the applicants arrive, placing an unfair burden on Italy, Greece, and Spain—also the countries that were hardest hit by the crash of 2007–08. Europe must act collectively to reduce the flow of refugees, combat human trafficking, and process the cases of asylum seekers. In the same spirit, it needs to show greater flexibility about spending limits, worry less about inflation, and pursue a more growth-oriented economic policy. Paradoxically, the recent slowdown of the German economy might favor this prospect.
In other words, unless the current government and its allies in Brussels take concrete, meaningful steps to improve the lives of ordinary Italians, Salvini’s power grab may turn out to have been delayed but not denied.