Italian gold and populist publicity
Italy’s Deputy Prime Minister Matteo Salvini has revived a five-year-old proposal to use his country’s gold reserves to bring down the budget deficit. The idea is problematic for several reasons – but that is not the point. Mr. Salvini is likely using this controversial plan to make headlines and burnish his populist credentials ahead of the European Parliament elections. While he may take the gold idea further, his real goal is to enlarge and lead a pan-European alliance of euroskeptics.
GIS Dossier: The Italian case
Politically and financially, Italy has come to be regarded as a weak link in the European Union. Its shaky banks and enormous public debt almost blew apart the euro area during the debt crisis of 2010-2012, and could still do so. Its government, a marriage of populists on the left and right, claims to be the precursor of a protest wave that will sweep this year’s European Parliament elections. But as usual, it is hard to tell whether Italy is headed for disaster or more of the same.
2019 Global Outlook: The volatile Moscow-Kiev-Brussels triangle
In 2019, the geopolitical interplay between Russia, Ukraine and Europe will depend on their leaders. In Russia, President Vladimir Putin will have to decide whether to continue his assertive foreign policy. In Ukraine, the presidential election could bring the mercurial Yulia Tymoshenko to power – how she will deal with the war in the east remains a mystery. In Europe, the Franco-German alliance is losing traction. Rifts in the EU will deepen, making it impossible to present a united front on the challenges Russia and Ukraine present.
2019 Global Outlook: Europe’s year of living dangerously
There are plenty of signs of trouble ahead for the European Union in 2019. Unstable leadership, rampant populism, strikes and demonstrations, migration disputes, security challenges, Brexit, an economic slowdown and the makings of another financial crisis are just a few of the challenges that await. For EU institutions, perhaps the biggest test will come with the European Parliament elections in May, which could overturn the grand coalition that has governed the bloc since the 1980s.
Will Italy make it?
Italy’s public finance situation is worrying global markets, just as the newly-elected populist coalition is plotting its economic course. The coalition made dramatic promises to voters that could blow past deficit targets and push Italy toward default, bailout or an exit from the euro. But despite their recklessness, the Five Star Movement and the League are more likely to moderate their economic programs — that is, if they can manage to keep their alliance together.