Could Italy’s election result spell the end of the EU as we know it?
Matthew Elliott, senior fellow at the Legatum Institute and senior political advisor to Shore Capital, says YES.
Presidents Macron and Juncker have spent the past six months trying to shift the EU in a more integrationist direction, so the election of a populist, eurosceptic government in one of the EU’s founding member states is not good news for them. (Neither, incidentally, is the anti-integrationist speech from Dutch Prime Minister Mark Rutte this week).
Crucially, Italy’s new government will be unable to make the hard decisions necessary to improve the country’s economy. With a chaotic coalition, a severely indebted state and a weakened banking sector, both Italian companies and individuals will keep their money parked in northern Europe, leaving local banks unable to lend, resulting in continued recession.
Unlike Greece, Italy is too big to fail. The outcome, at some point in the future, will be for some of the southern European states to kickstart their economies by leaving the Eurozone and devaluing their currencies. This alone will spell the end of the EU as we know it. And the Italian election result has brought that day forward.
Beatrice Faleri, Italian economist and freelance writer, says NO.
The results of Sunday’s vote are anything but surprising. That Matteo Renzi’s popularity had plummeted since last year’s constitutional referendum and that the public discourse around Europe, immigration, and the economy had taken a nationalistic turn were both common knowledge well before election day.
The implications for the EU are, however, not that straightforward to draw. Even supposing that the new government will be formed entirely of eurosceptics (which is unlikely, considering that the prospect of a coalition between the Northern League and the Five Star Movement seems farfetched), a Brexit-like referendum is not on the cards, unless major constitutional reform is brought forward.
Regardless of which of the two major parties makes it into government, it will be in coalition with political forces that are more or less explicitly pro-EU.
Undeniably, the election result will ensue some soul-searching in Brussels, but, much like in the aftermath of Brexit, may induce the EU governance to show a united front and reiterate their commitment to the European project.