In July 2012, the then head of the European Central Bank, Mario Draghi, said he would do everything to defend the euro against speculative attacks. His intervention calmed markets and solved the eurozone’s sovereign debt crisis, saving Italy from additional borrowing costs that could collapse an economy that was too big to fail and jeopardize the single currency. Exactly 10 years later, Mr Draghi’s untimely departure as Italy’s prime minister – necessitating snap elections in September – threatens to resurrect the debt demons of the past, along with a few others as a bonus.
According to recent polls, the autumn elections will form the most far-right government in Western Europe, consisting of Giorgia Meloni’s post-fascist Brothers of Italy party, the Nationalist League, and Silvio Berlusconi’s Forza Italia as a junior partner. As the leader of the largest party, Ms Meloni – whose illiberal policies are very similar to those of Hungarian Prime Minister Viktor Orbán – would be the favorite to be prime minister. This prospect would be alarming in any context. Against the continental backdrop of Vladimir Putin’s war in Ukraine, a related energy crisis and the threat of recession, it poses a threat to European unity on multiple fronts.
On issues like immigration and LGBT rights, a Meloni-Salvini axis would likely place Italy alongside countries like Poland and Hungary to aggressively challenge European norms. Echoing Brexit-style arguments, Ms Meloni has called for the reaffirmation of the supremacy of the Italian Constitution over EU law and an ‘Italians First’ policy on access to welfare and welfare. On Ukraine, Mr Draghi became a key figure in maintaining Western unity and supporting Kiev in response to Russian aggression. But the Italian right’s pro-Putin experience does not inspire confidence that such an approach would survive a winter dominated by a Moscow-rigged energy crisis. In 2019, the league’s chairman, Matteo Salvini, called the Russian president “the best statesman in the world”.
Europe’s insurance against a destabilizing shift to the right may lie precisely in Italy’s ongoing economic weakness. Whoever wins September’s elections will have to negotiate €200 billion worth of government debt rollovers by the end of the year. With interest rates rising to fight inflation and Italy’s borrowing costs heading towards levels seen since 2012, Rome may once again have to rely on the ECB’s generous bond purchases. The new government must also work to secure the next tranche of money from the EU recovery fund, which totals €190 billion and was originally negotiated by Mr Draghi. No future government will be forgiven for screwing this up. Economic pragmatism may therefore dictate building bridges to Brussels and Frankfurt, rather than demolishing them.
It would be better not to have to find out. The centre-left Democratic Party will run on a continuity Draghi platform. But the increasingly unpredictable Five Star Movement’s role in Draghi’s ouster may have quashed the possibility of an electoral alliance and paved the way to power for Ms Meloni and her allies. In 2019, the Brexit crisis propelled Britain into its first winter elections in a hundred years. Italy’s first summer election campaign in a century, fought in scorching heat, is also taking place amid emergencies. It can lead to a similarly disturbing result.