Again on the new Italian government
On Sunday, the new Italian government refused to let a rescue boat with more than 600 migrants dock in an Italian port. The same ship eventually docked in a Spanish port. As the Italians have long thought they have been left alone by European partners in “managing” (attempting to) waves of refugees coming from North Africa, this fact was celebrated widely and certainly strenghten the new government reputation for resolve. It also showed there is a potential for tension developing among the right wing (Northern League) and the left wing (Five Stars Movement) of the government majority, as their positions on immigration and welfare tend to be different.
I’ve written a piece for our sister blog, the Law & Liberty website, a few days before this event. I see the two “populist” parties finding a common ground in their longing for bigger government.
If we look at the new government’s economic agenda, on the other hand, there’s not much there that will foster Italy’s growth. The Italian economy grew by 1.7 percent in 2017; not much, but at least positive growth. Lowering the retirement age, reintroducing labor-market restrictions, “punishing” businesses that move abroad (a recent proposal by Five Star’s Luigi Di Maio) will not help wealth-creation. But Italians are used to bad government, and bad government may look good to markets and foreign investors if everybody is taking it as preferable to catastrophic government (quitting the euro, bank runs, bank nationalizations, capital controls).Perhaps the saddest part of this picture is that Italy would need some sort of a credible alternative—and it has none. The “moderate” parties are still in shambles, the political leaders of the immediate past aren’t credible, newcomers on the scene seem to believe they can win votes by acting like more presentable alternatives to populists, but without challenging their own ideas. This was, in a way, the game played by Renzi, of the Democratic Party, who inadvertently legitimized the anti-European rhetoric of his opponents as he entered into fights with Brussels to be allowed to increase deficit spending.