Italy’s Budgetary Renaissance

Guest post by Ted Malloch and Felipe Cuello

Insiders in the political game know something not many outsiders figure out.

If you’re comparing the power of government officials: the bigger the budget, the higher the rank.


A common sense rule of thumb, you might say. Money matters.

Budgeting in Italy is a delicate game.

The last time an Italian Prime Minister got creative with his accounting, Silvio Berlusconi ended up barred from office for years (now elapsed) and the EU installed a technocrat – Mario Monti – as PM without an election.

Philosophical / rhetorical question: What is it called when your leaders are unelected?

Matteo Salvini is a deft negotiator – he got 50/50 of a majority where he provides 20% of the input.

As the Minister of Interior his budget is middling, but the press opportunities are wonderful.

He has exploited them brilliantly.

He also sits as co-equal to the leader of the Five-Stars, Luigi Di Maio, both are Deputy PMs – the crown is worn by Giuseppe Conte, a non-political compromise between Matteo and Luigi—a nobody.

In truth, Salvini rules.

The explanation for his failure to ensure a better budget from his party’s point of view – cutting spending on the profligate south and cutting taxes on his wealthy northern heartland – is a point of many headaches in Brussels.

Among the self-flagellating conditions the EU imposed on Rome when it dethroned Berlusconi in 2011 was the power to refuse future Italian budgets until financial stability was restored.

In other words, Salvini can let through budget-busting Five-Star proposals for a Universal Basic Income; fully knowing they will be vetoed by the Eurocrats in Brussels!

Why spend political capital forcing your coalition partner to pare back on their spending commitments when Brussels can do it for you? Five-Star will keep sending in atrocious levels of public spending, and Brussels will insist on more serious plans.

Imagine the strategic depth needed to see a second-order consequence for this move: The EU needs to pass a budget too, and it can’t until the Italians get theirs approved.

Jean-Claude Juncker and his allies in the outgoing European Parliament tried their best to get it through before the deadline. But with the gridlock in Rome, their plan was foiled: Juncker wanted to pass a 7-year resolution over the head of the incoming 5-year term of the new parliament – which even lowball estimates report record-setting numbers of Eurosceptics into office in a populist-nationalist rout.

By filibustering the EU budget in this way, Salvini has wrested away a major victory for democracy.

The new European Parliament will pass its own budget for the Commission that replaces Juncker and company.

Interestingly, French President Macron agreed with Salvini on this principle – though it might be because Macron’s new party has no seats in the European Parliament, and therefore no say in the budget.

Is there any point in holding out?

Speculating about a second EU coup in Italy would be very alarmist. But Salvini may be daring Brussels to take back control right on the brink of the May elections.

The image of resistance is politically valuable for both the Five-Star and Salvini – the incentive to keep it going is clear.

Who knows, Juncker may give Euroscepticism one last parting gift by tearing down Salvini’s government. But in any case, don’t expect a budget out of Rome until after the Juncker Commission retires on October 31. Then it’s all bets off.

You can thank Salvini and his savvy Machiavellian strategists for that.

One better aside from winning the Euro game, Salvini’s popularity is surging and in a new Italian election his Lega Party would win hands down, making him thej Prime Minister alone.

He would be not just defacto but dejure, “The Trump of Europe.”



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