Italy, the Meloni government confirms its shift towards Europeanism

Giorgia Meloni

Just a month and a half away from the final approval of the General State Budget (PGE) for the year 2023, the government headed by President Meloni has confirmed what was already expected when she received the "incarico" of forming a government from President Mattarella: that she would abandon Euroscepticism to progressively move towards Europeanism. This has been confirmed by the draft budget that the Minister of Economy and Finance, the "leftist" Giorgetti, has submitted to the EU authorities, which makes it clear that the two key men of the transalpine economy, former premier Mario Draghi and the man who before Giorgetti headed the key portfolio in the economic area (Daniele Franco), have been behind the drafting of these budgets. 

In fact, it was well known that the programme with which the centre-right coalition contested the last general elections was full of unrealistic promises, and hence the move to much more realistic budgets that would not generate any controversy with a European Commission that, once it has verified the democratic disposition of Meloni and her ministers (abandoning its initial fears that they were extreme right-wing or post-fascist), has adopted an attitude of maximum collaboration with the eurozone's third largest economy. The roadmap had been in place for almost two years, when Draghi, then newly appointed Prime Minister, presented his full programme of reforms (the famous "PNRR") in exchange for which his country would receive huge amounts of European funds.  

In reality, the only noteworthy component of this draft budget in relation to the Meloni government's electoral proposals is none other than the lowering of Value Added Tax (VAT) on products intended for newborns, as well as the increase in the length of maternity leave. But apart from that, there is little else to be found of what Meloni promised. 

Thus, among the most relevant elements of the draft budget, which must now be examined by the European Union, is the existence of a kind of "remission" for those who have debts with the tax authorities of up to 1,000 euros and that this debt, in turn, dates back to before 2016. In line with what are usually centre-right policies, Meloni will lower the level of taxation on the taxpayer, although the margin is rather narrow considering that the public debt to GDP is at very high levels and that the growth forecast for 2023 is not exactly going to be good: it has already gone from +6.3% in 2021 to +3.2% in 2022, and by 2023 it is very likely to go straight into recession. Italy is experiencing the same situation as Germany: the energy problem caused by the war in Ukraine is affecting not only domestic consumption, but also the numerous factories that are currently working at full capacity in regions such as Lombardy and Veneto. 

What the Meloni government has benefited from, like other European executives, is the possibility of increasing public spending: the European Union is allowing it to spend 35 billion more next year, although on condition that 21 billion of this 35 billion is earmarked for families and businesses in the face of rising energy prices. Likewise, in order to raise more money, the tax on the extraordinary profits of energy companies could be increased to 35%, with a deadline of July 2023. 

What the president of the Council of Ministers will be able to present as a real personal triumph and the fulfilment of a commitment to the centre-right electorate is the progressive abolition of the controversial "citizens' income". We say "progressive" because, if it were up to Meloni, this "citizenship income" would not even appear in her first budgets as "premier", but, with a view to greater social assimilation, and bearing in mind that her party received many votes in the main regions where this controversial subsidy is most heavily paid, she cannot do it with the stroke of a pen, but rather set in motion a transitional period of one year so that it disappears definitively in the 2024 State Budget. 

In reality, the "citizenship income" has never become what was promised at the time: when the Five Star Movement contested the general elections in March 2018, the party's commitment was that around five million families without resources would receive it; for a maximum amount of around 750 euros; and for a maximum period of two years. The reality was, firstly, that setting up the structure to finance this measure required a "go-ahead" that was never obtained from the European Union, since the then government led by Luigi di Maio and Matteo Salvini needed the deficit to be taken clearly beyond 3%, when the commitment of the previous executive (the Gentiloni government, December 2016-May 2018) was to go to the 0.8% deficit target, taking into account how bulky the public debt was. In the end, this deficit target remained at 2.04%, a real "Pyrrhic victory" for what was then known as the "government of change". 

On the other hand, Luigi di Maio, who was to personally handle this matter, appointed in June 2018 as Deputy Prime Minister and Minister of Labour (to which he added the portfolio of Economic Development), did not know until the spring of 2019 what the real number of requests for this income was, which was concentrated in most of southern Italy, but which also received a veritable flood of requests in northern Lombardy, where 26-27% of the transalpine population lives (16 of the 60 million inhabitants). The first consequence of all this? That in the successive elections to the government of the region (Sardinia, Trentino-Alto Adige, Basilicata, etc.), the Five Star Movement was going from setback to setback against its coalition partner, Matteo Salvini's League, which, if in March 2018 had received 17.1% of the votes in the general elections, in May 2019, on the occasion of the European elections, had already risen to 34% of electoral support. Faced with this chaos and management delays, the consequences were not long in coming: the same Luigi di Maio who in March 2018 had won 32.6% of the vote for his party, at the end of January 2020, just before the crucial elections for the Emilia-Romagna region (which were finally won by the centre-left PD against Salvini's party, albeit narrowly), presented his resignation as party leader. And by that time the "citizenship income" was already beginning to be collected, but in a much smaller amount and with a much smaller number of people than those who had applied for it.  

The problem is that this controversial measure, as has been proven in recent years, encourages people not to work: better to declare a lack of resources, receive the full (or at least a substantial part) of the income and then earn money in "b" which the state would not even know about, let alone pay the corresponding taxes, than to try to earn a living by working, which is what people had been doing until Five Star included this promise in its electoral programme in March 2018. This has created a very serious problem in sectors such as the hotel and catering industry, where waiters are not to be found in many places because those who used to do this work have preferred to become beneficiaries of the aforementioned "citizenship income". 

The most striking thing about all this is that the greatest detractor of this subsidy was not, paradoxically, Prime Minister Meloni, nor even less so Matteo Salvini, who voted in favour of it when he was part of the coalition government with the Five Star Movement for a year. In reality, the staunch opponent was the former Prime Minister Matteo Renzi, who, as "premier" for 1,020 consecutive days (between February 2014 and December 2016), knew that the European Union would never give its "green light" to this disproportionate subsidy: he knew this from the three times he had to negotiate budgets with the Union when he was Prime Minister of the Council of Ministers. But since Renzi is now in the opposition, as his parliamentary group ("Il Terzo Polo") only won three dozen parliamentarians out of the 600 seats at stake between the two chambers, he has had to see how the until recently "sovereigntist" Meloni was the one who began the process of liquidating the "citizenship income". 

In fact, even Mario Draghi, when he took over the government in mid-February 2021, would have already liquidated it, but he could not do so because in the "maggioranza" that supported his government was precisely the Five Star Movement. Now, with the latter also in opposition (and as opposed as usual to Matteo Renzi), the "citizenship income" is on its way to disappearing. And the fact is that, as has already been mentioned above, what is most evident in this draft General State Budget Law is that those who really govern the transalpine economy are Draghi and Franco, given Giorgetti's lack of authority in economic affairs. Budgets that will pass through both the EU authorities and the Italian Parliament without any problem, and which are logically no more than the starting point for a policy response to the extremely serious consequences of the war in Ukraine on energy, exports and the rising cost of living.  

But one thing is clear: Meloni is, in practice, beginning to abandon Euroscepticism and embrace Europeanism. Just ask the British: in the "referendum" on Brexit, 51.6% voted to leave the European Union, and now... only 31.9% think it was right to leave the European integration process. And, along the way, four political corpses: David Cameron, Theresa May, Boris Johnson and Liz Truss, four presidents of governments that have fallen in little more than six years. Meloni, who was for years the "travelling companion" of British eurosceptics, has taken good note of this and now there she is: more pro-European than Alcide de Gasperi himself, the "founding father" of the current EU. Seeing is believing. 

Pablo Martín de Santa Olalla Saludes is Professor of International Relations at Nebrija University and author of the book 'Historia de la Italia republicana' (Madrid, Silex Ediciones, 2021).