Roman Reality Check Italian Trumpism Is No Less Dangerous than the Original

Members of the European Union need to send a clear message to the new Italian government: We will not allow you to destroy the eurozone.

Italian prime minister designate Giuseppe Conte
AP

Italian prime minister designate Giuseppe Conte

A DER SPIEGEL Editorial by


They view themselves as the executors of the true will of the people. They put their nation first, without any regard for international treaties. But, no, it's not Donald Trump and his supporters in the United States we're talking about here. It's Italy's new government, which is currently being formed and whose political intent could best be summarized as such: Italy first, reflection second.

For the European Union, though, the Italian version of Trumpism is no less dangerous than the original. The political platforms of the new populist coalition government in Rome are comprised primarily of huge tax cuts while at the same time increasing pensions and social welfare services -- which would push an already highly indebted nation even further into debt. It's an agenda that brings along with it the constant threat of suicide attack on Europe: Either you make concessions, or we'll blow up our country and the eurozone along with it.

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At first hearing, the threat sounds like the one issued by former Greek Finance Minister Yanis Varoufakis, who three years ago threatened that the common currency would crash if the other eurozone countries didn't forgive a significant chunk of Greek debt. In truth, however, the attack from Rome is much more brash and perilous.

It's more dangerous because, in contrast to much smaller Greece, the eurozone bailout fund would only be sufficient in a worst-case scenario to provide aid to Italy for one to two years. After that, it is almost inevitable that that euro would be thrown into an existential crisis that could drag banks and financial institutions around the world right down into the abyss with it. If Greece represented a bomb for the eurozone, then Italy is a nuclear bomb.

A Perfidious Transfer Union

Beyond that, the offensive from Rome has been characterized by a unique form of audacity. Greece was a poor country on the verge of bankruptcy that asked for assistance at a point when it was in dire straits. The Italians, on the other hand, are wealthier on average than the Germans and many times richer than the people of Latvia or Slovakia. And yet people in those countries would ultimately be held liable for the consequences of a tax reform that primarily benefits the wealthier portion of the Italian population. If the new government is able to prevail with these reforms, it would establish an extremely perfidious transfer union in Europe: one that moves money from the poor to the rich.

Eurozone governments would thus be well-advised to cooly reject unreasonable demands coming from Rome. On the one hand, they cannot allow any doubts to arise as to whether the cabinet of prime minister-designate Giuseppe Conte is required to adhere to the applicable budget rules. And on the other, those in power in Berlin, Brussels and Paris, contrary to the advice currently being given by some German economists, should absolutely continue to push forward with their plans for reforming the eurozone. And this should be done in the spirit of the proposals put forward by French President Emmanuel Macron months ago -- proposals which would also benefit Italy.

A larger investment budget, for example, could help reduce high youth unemployment in southern Italy. At the very least, it would be more likely to create new jobs than would lowering the retirement age, as the new government in Rome plans to do. Italy also deserves better support in tackling the refugee crisis after years of being left in the lurch by the rest of the EU. It's a proven principle: The prospect of getting more money from Brussels has moved many governments to rethink their policy plans in the past.

The EU's most important ally here is the financial markets. For several days, risk premiums on Italian sovereign bonds have been rising, and this trend will continue if the new government sticks to promises of prohibitively expensive tax cuts and social welfare benefits. If, on the other hand, it quickly adapts to reality, then those premiums will drop, and the government will have to set aside less money for servicing its debts. It may sound like a paradox, but it is in fact true that the better a country manages its budget, the more it is ultimately able to spend. The question is how long it will take for the populists in Roma to accept that logic.

The slogan for Macron's reform of the eurozone is greater solidarity in exchange for greater stability -- and the same should apply for how we deal with Italy's new populist government. In the end, a deal could arise that would serve the interests of both sides.

And it's high time for Donald Trump's Italian impersonators to learn something about the art of the deal.

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rhess 05/25/2018
1. Trumpism
You guys are so far left and Trump haters you are disgusting.
cphenson 05/25/2018
2. Italian Trumpism?
What has happened in Italy mirrors what happened in the UK two years ago. After several months of watching television coverage of hordes of mainly young male Mid-Eastern migrants, with a few refugees and families among them, the British voted for Brexit. The Italians too have tired of their country being overrun by migrants from North Africa most of whom are savvy enough, with some prompting from NGO employees, to be claiming refugee status. Is anybody in Berlin and Brussels making the connection yet? It's not Trumpism - it's ordinary people getting disgusted with the lack of leadership shown by the time servers who are now being booted out.
snalbanese 05/25/2018
3. Italian Trumpism
I could not help but think of Michael Sauga as a Der Deutsche Michel character upon reading his editorial about the current political mess in Italy. However, there is nothing comical about Herr Sauga’s Schlimbesserung reference to Greece. “Greece was a poor country on the verge of bankruptcy that asked for assistance at a point when it was in dire straits” – and Germany and the EU’s “perfidious” (sic) assistance was to kick Greece in the teeth, resulting in skyrocketing unemployment, suicide, death rates etc. To use in your editorial the example of the bullied Greece again makes clear why Italians see no reason to comply with an EU that operates to benefit the banks. In hindsight, there is near unanimous agreement that Italy should not have become part of the Eurozone in the first place. And it is also obvious that ultimate responsibility for leading Italy into the hands of the so-called “populists” rests with previous Italian governments, from the Ciampi cabinet of 1993-1994 to the just ousted Renzi-Gentiloni regime. It is nonetheless difficult to deny the Italian populists’ claim that the EU has been hijacked by banks and corporations to do exactly what this editorial writer is complaining of – transfer income from the poor to the wealthy. The assertion “Italians have more wealth on average” speaks directly to the most important underlying issue – distribution of wealth. Averages are pointless if the GDP of your country has fallen by 20% since joining the Euro, and your population faces a chronic unemployment rate of over 11%. Demanding that Italians “adapt to reality” and adhere to EU rules that have already devastated their country, again illustrates exactly why Italians are turning away from the kinds of politicians that led them into this low income, high unemployment outcome. Of what use is the “stability” promised by Macron’s reforms if it is the stability of a stagnant equilibrium? The editorial writer hits the nail on the head when he states that “the EU’s most important ally here is the financial markets”. Of what benefit to the Italian population is a European Union whose best friends are international financial institutions? Why should ordinary Italians comply with diktats imposed on them by foreign banks, corrupt Eurocrats or cynically uninformed public opinion makers in Germany such as your editorialist? Salvatore N. Albanese
eagle1 05/26/2018
4. Trump has broken no US Treaties
Herr Sauga, Just to clarify a few things for you about President Trump. A US treaty is binding on a US President after said treaty has been submitted to the US Senate and ratified by a vote of 2/3rd majority. The Paris, Kyoto, and Iran deals were not US Treaties. None were ever submitted to the Senate and are not binding on any US President. Therefore, I do not understand your comment regarding President Trump breaking treaties.
MadMax90 05/27/2018
5.
Do you know what i, as an Italian, think? That each time Italy followed Germany in its quest to conquer Europe, Italy always paid the highest price and emerged defeated and downtrodden. First in 1940 and then in 1997, Italy signed its defeat and capitulation. You can make fun of us, insult us, threaten us if you like, but you will always be the ones who built Auschwitz and Buchenwald. We, on the other hand, have paid the price for linking our destiny with Germany's.. but i can guarantee you that we have learned the lesson. We will no long surrender our country and its people to the interests of Germany and the guard dogs of globalism. Either declare war on us or leave us alone. If you bring us down by employing blackmailing tactics, threats and financial weapons, we will bring you down with us. Are you sure you want to fight this war?
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