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.


 

An Oligarch, A Think Tank And The Rise Of American Kleptocracy?

Journal of Political Risk, Vol. 7, No. 10, October 2019

Industrialist Len Blavatnik at the 2018 Blavatnik Awards for Young Scientists. Source: Wikimedia Commons.

Bertie Harrison-Broninski
Oxford University

Ukrainian-born billionaire Lenonard Blavatnik has ignited controversy once again with his lavish donations to British and American institutions. This time, it is by giving $12 million to the Council of Foreign Relations (CFR), an influential thinktank with close ties to senior business, government, intelligence and foreign-policy communities in the US.

The move has prompted a series of open letters signed by “U.S., European and Russian foreign policy experts and anti-corruption activists”, who fear that such donations are “a means by which Blavatnik exports Russian kleptocratic practices to the West”. Many of them are CFR members themselves, and their letters are rounded off with footnotes demonstrating Blavatnik’s links to Putin’s inner circle and questioning the sources of his wealth. Their second letter states that the impact of the donation “extends far beyond the potential value of the money…beyond even CFR. That impact will touch upon the health of American democracy.”

None of this will come as any surprise to those who have followed Blavatnik’s spending over the past 15 years. While his philanthropy has seen him knighted by the Queen in the UK and hailed by some as one of the world’s most generous benefactors, his donations within political and educational spheres have repeatedly led to scrutiny and protest.

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Arctic Enterprise: The China Dream Goes North

Journal of Political Risk, Vol. 7, No. 9, September 2019

Arctic Ocean, ship on Barents Sea. Source: Tom Thiel via Wikimedia Commons.

Jonathan Hall
Security and Political Risk Analyst

Until recent years, harsh weather and unmanageable navigation routes have precluded all but the most determined crews from venturing through the Arctic. As climate change continues to take effect, however, warming temperatures are opening up the region to new opportunities. In 2017, for example, merchant ships were able to pass through a shipping lane, known as the Northern Sea Route (NSR), for the first time without icebreaker escort.

The NSR has since been discussed as a logistical windfall that will revolutionize the world of international shipping. The often-cited reasoning is the potential 5,000 mi (8,000 km), or 10-15 days saved in transit, as compared to more traditionally used routes such as the Strait of Malacca, or the Suez Canal. While the NSR is only open three months per year, climatologists predict it will be traversable for 9 months out of the year by 2030, and completely ice free within the next two decades. As these changes are coming into effect, no state seems to understand the geopolitical advantage a strong presence in the Arctic will bring more so than the People’s Republic of China (PRC). Continue reading

What The Philippines Must Do To Defend Itself From China

Journal of Political Risk, Vol. 7, No. 9, September 2019

A U.S. marine watches as Philippine Marines raise their flag over the naval station, 1992. Source: NARA & DVIDS Public Domain Archive.

Sannie Evan Malala
West Visayas State University

The Philippines is strategically located in Southeast Asia, at the fault-line between Communist China and the democratic nations of the Americas and Europe. In the north is East Asia, full of wealthy market democracies in increasing conflict with China. To the southwest are countries seeking to defend their exclusive economic zones from China, including Indonesia, Vietnam, Malaysia, and Brunei. As China’s power grows, the fault-line is widening and trying to straddle the middle will only result in our falling into the chasm. The Philippines must choose a side – subservience to China or joining a coalition of the willing in defense of each country’s independence and democracy from the Chinese hegemon. The Philippines has yet to take advantage of its full potential and has become economically poor and militarily weak, primarily due to corruption, internal armed struggle, and its growing relationship with China. For the Philippines to avoid being a satellite of China, this is what we must do. Continue reading

Geopolitics and the Western Pacific: An Interview with Leszek Buszynski

The book cover of Geopolitics and the Western Pacific: China, Japan and the US, by Dr. Leszek Buszynski. Routledge, 2019.

Journal of Political Risk, Vol. 7, No. 6, June 2019

This interview with Dr. Leszek Buszynski, author of Geopolitics and the Western Pacific: China, Japan and the U.S. (Routledge, 2019), took place by email with Dr. Anders Corr between May 31 and June 12.

Anders: What are some of your recommendations in the book?

Leszek: The recommendations are in the final chapter and have been written from the perspective of Australia as a a middle power and ally of the US.  Basically, the U.S. relies excessively on military power to counter China but this is creating the fear of a US-China clash in the region from which China benefits, particularly within ASEAN.  Scuttling the Trans-Pacific Partnership (TPP) was a mistake because it is a way of bringing together the states of the region into cooperation with the U.S., Japan and Australia in a way which would offset Chinese influence.

Anders: Don’t you think that China is also creating fear with its military buildup? Wouldn’t countries like Japan and South Korea be even more fearful if they did not have the U.S. military there to protect them?

Leszek: This is not the issue, the answer is of course. But without a broader US presence in the region, one that is not just military based, regional countries such as those in ASEAN would feel the pressure to gravitate to China.  China has a way of undermining the U.S. presence and its alliance system by playing on regional fears of conflict and instability, the Philippines under Rodrigo Duterte is a case in point. America has to counteract that. Continue reading