Italy’s New Government: Business as Usual

Journal of Political Risk, Vol. 11, No. 1, January 2023

Lorenzo Ammirati

Poster of Giorgia Meloni, leader of the Brothers of Italy Party, 2022. Source: Duncan Cumming via Flickr.

Nationalist identarian right-wing party Fratelli d’Italia (“Brothers of Italy”) was the only major Italian party to oppose former European Central Bank President Mario Draghi’s “national unity” coalition government which governed Italy between February 2021 and September 2022. Among the key campaign promises made by Fratelli d’Italia’s leader and current Italian Prime Minister Giorgia Meloni during the electoral campaign of September 2022 was a break with the economic policies of the Draghi government. However, the first Italian female Prime Minister has thus far demonstrated the opposite orientation.

In fact, Meloni’s sphere of decision making on economic policy is severely limited. Italy’s extremely high levels of public debt (above 150% of GDP) coupled with weak trust from financial markets and the European Union’s tight fiscal rules make it very costly (both financially and reputationally) for any Italian government to finance new public policies. Additionally, investments are currently mainly being made through the European Union’s Recovery Instrument, an ad-hoc fund created after the COVID-19 pandemic which lends money for EU approved projects, greatly constraining the power of the Italian government.

The war in Ukraine and the consequent energy crisis are further restricting the scope for economic changes. Together with Germany, Italy is the European country most dependent on Russian gas imports, and the current government (like the previous one) is committing much of its resources towards shielding businesses and families from the price increases. In the Italian 2022/2023 budget law, two-thirds of the financial resources were allocated to fighting these price increases and mitigating the additional economic consequences of the war. These measures were ‘copy-pasted’ from the budget law drafted under the Draghi government.

The remaining third of the 2022/2023 budget law funds were allocated to policies benefiting those groups that supported Meloni and her right-wing coalition government allies. These symbolic policies included an increase in the minimum state pensions of roughly 20 euros per month for people over the age of 75 in 2023, tax breaks for some very restricted categories of self-employed workers, and a 5% VAT reduction on baby products.

These policies too were pushed forward inside the previous government by the two current coalition parties of Meloni, Forza Italia (led by former Italian Prime Minister Silvio Berlusconi) and Lega, which were also part of the coalition government led by Draghi, together with the center-left Partito Democratico and the populist Movimento Cinque Stelle.

Though little has changed on the economic front, something has indeed changed since Meloni’s government took power. The government’s approach towards migrants (especially sub-Saharan Africans) became tougher, public prosecutors and the justice system are facing increased pressure, and anti-abortion groups hope for the government to introduce restrictive measures in the near future. It is no coincidence that the common feature of these changes is that they require no government expenditure.

Both for structural and contingent reasons, Meloni’s government could not overturn the previous Italian government’s economic policies, despite campaigning on a platform of great discontinuity. It is yet to be seen what the Fratelli d’Italia-led coalition government will do once its hands are free from the energy crisis and the Ukrainian war. But thus far, governmental power has rendered far-right nationalist Meloni’s economic policies almost identical to the ones of a former European Central Banker, and there are few reasons to believe this will change in the future.


Lorenzo Ammirati holds a BA in Political Science from the University of Bologna, and an MA in International Relations from SOAS, University of London. He has worked in institutions, public affairs, and political risk consulting. Currently he works alongside an Italian MP.


 

China’s Sharp Power

Journal of Political Risk, Vol. 10, No. 8, August 2022

A series of paintings of communist leaders lined up along a Hong Kong road, 2016. Source: Flickr.

Roman Štěpař
Charles University

If we understand geopolitics as a “representation of space”, then the Indo-Pacific region can be seen as an emerging geopolitical hotbed in which major powers struggle not only for control but also for discourse of values and worldviews. In this particular geopolitical competition of values and mindsets, a sharp power is gradually gaining prominence, and in the Indo-Pacific region, China is at the center of the action.

After the collapse of the Soviet Union, the lessons of Gorbachev’s “failure” were passed on to Chinese citizens. They denounced Moscow’s ideological neglect for this catastrophe and warned that it was possible that it would happen in China as well. Chinese foreign policy has as a result been transformed. After 40 years of remarkable rise, China has now clearly demonstrated its desire to lead the world by reasserting itself in a position that its leaders consider “historically correct.”

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Chinese Lawfare in the South China Sea

A Threat to Global Interdependence and Regional Stability

Journal of Political Risk, Vol. 10, No. 7, July 2022

Map of the South China Sea, with 9-dotted line highlighted in green. Source: CIA.

Priscilla Tacujan, Ph.D.
U.S. Department of Defense

China’s expansionism in the South China Sea (SCS) is underway, despite opposition from small littoral states and regional powers in the area. China is seeking to change the legal order governing maritime conduct by engaging in “lawfare”[1] and infrastructure-building on disputed waters as part of its maritime strategy. Lawfare enables Beijing to undermine established elements of international law and delegitimize neighboring states’ maritime claims. Claimant countries and the U.S. have argued for the importance of a rules-based approach that offers clear and uniform rules for maritime conduct. However, in the absence of enforcement mechanisms, China will likely continue to undermine international law, prevent littoral states from advancing their maritime claims, and threaten regional stability and global interdependence.  Assessing and improving countermeasures currently in place, including enforcement mechanisms, existing maritime coalitions with regional allies and the U.S., and freedom of navigation (FON) operations may deter Chinese aggression and prevent the escalation of maritime conflicts in the SCS.

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The Old World Order Endures

Journal of Political Risk, Vol. 10, No. 6, June 2022

President Joe Biden addresses the nation in the Roosevelt Room, 2022. Source: CNN.

William R. Hawkins
President of the Hamilton Center for National Strategy

President Joe Biden has been using the term “inflection point” in his speeches. At the U.S. Naval Academy on May 27 he said, “Class of 2022, you are graduating at an inflection point not only in American history but in world history. And I mean it. The challenge we face and the choices we make are more consequential than ever. Things are changing so rapidly that the next 10 years will be the decisive decade of this century, because they’re going to shape what our world looks like and the values that will guide it not just for the immediate future, but for generations to come.” Yet, he didn’t lay out what those changes would be. He moved directly to a discussion of Russia’s invasion of Ukraine, “A direct assault on the fundamental tenets of rule-based international order. That’s what you’re graduating into.” He then told them “You’ll learn to crew the most advanced ships in the world, train the most elite combat units, conduct undetected submarine missions, fly the most advanced fighter planes. But the most powerful tool that you’ll wield is our unmatched network of global alliances and the strength of our partnerships.”

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Implications of China’s Pacific Dream for the United States, Australia, and Allies

Journal of Political Risk, Vol. 10, No. 6, June 2022

Chinese Foreign Minister, Wang Yi, and Solomons Islands Minister of Foreign Affairs and External Trade, Jeremiah Manele, 2019. Source: cnsphoto

Yan C. Bennett
Princeton University

John Garrick
Charles Darwin University

It is apparent that Xi Jinping’s Chinese Dream now includes the Pacific Ocean where his Foreign Minister Wang Yi has undertaken a Pacific Islands tour of broad scope and ambition. While  China’s economy is stagnating, it nevertheless continues to drive for increasing its world power as Minister Wang aims to finalise the China-Solomons Security agreement and has hosted a Pacific Island Foreign Ministers meeting whilst in Fiji. Wang’s proposals have prompted strong responses from the United States and its allies in the Indo-Pacific, in particular Australia and New Zealand.

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