Thread on #Italy: 3 months after elections, Italy has a government representing 50 per cent of Italians. Any other solution would have seemed confected and undemocratic. The Five Star and the League will now have to come to terms with the reality of government @CER_EU
Italy's President took risks by vetoing Savona's appointment as finance minister, yet ultimately prevailed when the League and the 5S came back to the negotiating table and accepted that he would have to be moved to another ministry.
The new government is a hybrid of populism and technocracy, with 3 non politicians as ministers, including a minister from Monti's government as foreign minister.
The new government is eurosceptic, not europhobic. The League is very critical of €, but does not call for Italy's exit from the EU. 5S has defined itself as pro-European, and tried to join the ALDE group in the EP. The coalition contract calls for more the powers for the EP.
What can we expect from the new government? 1) Eurozone reform more difficult. Lega and 5S toned down idea of immediately implementing 'flat tax' and universal basic income. But they will increase Italy's deficit and challenge the Commission. This makes €zone reform harder
2) Italy will be more sympathetic towards Russia. However, unlikely to remove sanctions: drains political capital badly needed in economic sphere and harms relations with the US. Likelier that Rome will maintain sanctions while boosting political and trade ties with RU
Despite this, Italy could yet play a constructive role in the coming years. Much still depends on how the views of the 5S evolve. It has no experience of national government and has not yet had to articulate positions on many policy issues.
Migration is one key area where the EU could engage with Italy. Italian officials want Brussels to invest in signing readmission agreements with African countries, making available funds of the same order of magnitude as the €6 billion the EU has pledged to Turkey
On Eurozone reform, European leaders could work towards a small eurozone budget to stabilise shocks – perhaps the limit of what is currently politically possible.
The coming years will be crucial for the EU. If the EU does not do more to convince Italians that the EU benefits them, the new government, and Italians, will become more eurosceptic – in a few years leaving € or EU may no longer seem unthinkable.

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More from @LScazzieri

Sep 28, 2018
The 5 Star League coalition in #Italy is now 4 months old. What should we make of it? A thread @CER_EU
Italy has a more confrontational approach to the EU picking fights on migration, the EU budget and Italy’s finances. Salvini has driven the agenda on immigration, and the League has benefitted – polling 30% vs 17% in the general election
Italy’s run in with EU has been milder then feared. Plans for a 2.4% budget deficit are a big climb-down from early plans for a 7% deficit. If both the Five Star and the League can claim victory, the optics of spat with the EU will matter more than the substance of the budget.
Read 8 tweets
May 13, 2018
There is no firm deal yet. But worth reflecting on what a 5Star-Lega government would mean for EU: Italy unlikely to be a spoiler unless it is is pushed THREAD from longer piece here cer.eu/insights/what-… politico.eu/article/5stars… @CER_EU
1) Eurozone reform more difficult. Even though Lega and 5S toned down idea of immediately implementing 'flat tax' and universal basic income and unlikely to breach 3pct budget deficit rule their stance pits them against Commission + gives Germany excuse to go give up on reform.
2) Italy will be more sympathetic towards Russia. However, will not try to remove sanctions: drains political capital badly needed in economic sphere and harm relations with the US. Rome likely to maintain EU unity on sanctions while also boosting political and trade ties with RU
Read 8 tweets

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