With almost 70 changes of government since 1946, a reputation for corruption, a massive debt and a struggling economy, Italy faces serious political and economic challenges. There is, however, another Italy — the Italy famous for fast cars, its cafe culture and great food; the Italy of Rome, of empire and of ancient civilization; the Italy that is a much-loved destination for millions of holidaymakers every year. Indeed, with around 58 million visitors a year, Italy is the third-most visited country in Europe, after France (87 million) and Spain (82 million).
Of course, an Italy with a struggling economy is as much a true reflection of the country as is the one so admired for its cultural and historical achievements. And its economic woes seem so urgently in need of a fix.
One of the world’s biggest economies
Jörg Buck, head of the German–Italian Chamber of Commerce, accepts the fact that Italy has major economic challenges. However, he says that Italy’s strengths are all too often overlooked. “Who is aware,” Buck asks, “that Italy is the second-biggest manufacturing country in Europe?” And he adds that it is easily forgotten that Italy has a very strong industrial sector. He points to record trade figures in 2018 between Germany and Italy, “driven by the automotive sector, steel, electronics, space and aviation, machine production and the supply industry”.
Salvatore Viola, originally from Sicily and now managing editor of Adesso, Spotlight’s Italian-language magazine, is also keen to stress that Italy has a lot going for it. After all, he points out, “Italy is the eighth-biggest economy in the world”. Still, there is an inevitable “but” that brings even the most positive thinker to a sudden stop: Italy’s staggering public debt. “We have a problem with debt — to such a degree that, in Europe, only the Greeks are more indebted than Italy,” Viola says. Figures released in 2018 showed that Italian public debt had risen to more than 130 per cent of GDP.
In April of 2019, Carlo Alberto Carnevale-Maffè, professor at the Bocconi University School of Management in Milan, explained to Deutsche Welle that the situation is actually worse than the government estimates. As well as Italy expecting “zero or even negative growth” in 2019, Carnevale-Maffè said that “robust” exports are “the only positive component of our GDP”. Every year since 1999, GDP growth in Italy has lagged behind the euro-area average, and there is little to suggest it has recovered from the financial meltdown of 2007–08. In late 2018, the economy again entered a recession (the only EU economy to do so). News that Italy had recorded 0.2 per cent quarterly growth in early 2019, ending its recession, was hardly reason to celebrate.
Struggles with the European Commission
It’s not difficult to find analysts predicting Italy’s economic meltdown, with the country leaving the eurozone and creating shocks to economies well beyond Europe. Worries about its high debt prompted the European Commission on 5 June 2019 to inform Italy officially that it would take action by punishing the country, likely in the form of a huge multi-billion-euro fine.
And it’s not just now, but also in the medium and longer terms, that Italy faces ongoing economic problems. In the EU “Digital Economy and Society Index” for 2018, Italy came 25th out of 28 EU member states. The report noted: “Italy still does not have a comprehensive digital skills strategy.” A lack of skills to match the needs of the modern economy doesn’t offer much hope for a country with an unemployment rate of more than ten per cent since early 2012. And when the European Commission lowered its growth forecast for Italy in 2019 from 1.2 to 0.2 per cent, it cited “uncertainty related to the government’s policy stance and rising financing costs”. In other words, the Commission placed at least part of the blame on Italy’s populist government.
Compounding Italy’s problems is corruption, with an estimated €150 billion in unpaid taxes in 2018. The European Commission said that in 2014, out of a total of €159.5 billion in lost VAT revenues across the whole of the EU, Italy was responsible for €36.9 billion.
Right-wing populism
A few months after the March 2018 Italian election, the radical right-wing League joined the anti-establishment Five Star Movement (M5S) to form an uneasy coalition government. Ostensibly, the government is led by M5S’s prime minister, Giuseppe Conte, and one of his two deputies, the M5S leader, Luigi Di Maio. In reality, the main driving force is the second deputy prime minister (and interior minister), Matteo Salvini, head of the League.
Much of Salvini’s political energy is spent demonstrating how vehemently anti-migrant he is. As if to prove the point, in his press conference after the League placed first in the May 2019 EU elections, Salvini was quoted as saying: “The migrant question will be our first battle in Europe.” Such rhetoric is profoundly worrying to Andrea Mammone, a historian at Florence’s European Institute and the UK’s Royal Holloway, University of London. Mammone, an expert on the far right, says that “Salvini and others in the League are challenging migration all of the time”, with the result that the wider society “starts scapegoating migrants”.
Salvini’s apparent strength, however, will be tested now that 2019 EU elections are out of the way. To a degree, the May elections jolted the seemingly inexorable rise of European populism, especially in Denmark, the Netherlands and Germany — where populist, far-right parties failed to do as well as predicted. In Italy, though, Salvini’s League took 34.3 per cent of the vote, while his coalition partners, M5S, got just 17.1 per cent. An emboldened Salvini has also played a central role in creating a European group of far-right parties under the banner of Identity and Democracy (ID) in the European Parliament. These include Germany’s AfD, France’s National Rally and Finland’s Finns Party.
Nowhere to hide
The League may have emerged from the EU elections strengthened, but Salvini now has a challenge in that he can no longer hide behind the fig leaf that he is the junior partner in Italy’s coalition. Indeed, expectations for Salvini are growing, and he is increasingly seen as being responsible for the direction of Italy, its economy and other policies that influence the everyday lives of ordinary Italians. If he fails, Salvini and his right-wing governing coalition could easily become just another ephemeral post-war
Italian government.
In August 2019, the rows within the coalition culminated with Salvini calling for early elections. People like Mammone, however, are afraid that before losing power, Salvini and the League will do substantial damage. “I don’t think there is a direct threat to democracy, but certainly there is a threat that illiberal policies could be implemented in Italy,” he says. The question, he adds, is whether or not Italian society will be strong enough to reject them.