18 May 2018

The populist Five Star Movement (M5S) and the right-wing and anti-immigration League have agreed the terms of a coalition government which – pending a vote of confidence by the Italian parliament – could rule Italy for the next five years. Open Europe’s newly published briefing, “Marriage Italian style: The Five Star Movement – League coalition agreement and its implications for Europe”, considers what implications the new government could have for Italy and for Europe.

The briefing argues that the implications of this new government might take some time to become apparent; in the short-term its impact should be more limited, going by the relatively moderate tone of the final coalition agreement. However, in the medium to long-term, a M5S-League government can leave a deep mark. Such a government would be an unpredictable voice for change, might shift the positions traditionally taken by Italy at EU level on different policy areas, and contribute to a broader sense of political upheaval across the EU. Whilst the success of forces that present themselves in antithesis to the establishment reflects a demand for change common in Italy and elsewhere in Europe, the composition of the new Italian government may make key reforms in Europe more difficult to achieve. Furthermore, there are important differences between the approaches of the two coalition partners; it will be crucial to see which of the two comes out on top.

Key conclusions

There are important differences between the two coalition parties, and much will depend on which of the two succeeds in imposing its political line on EU matters. The League is openly Eurosceptic, whereas the M5S are more difficult to categorise – decidedly ambivalent on European integration, but more conciliatory in their approach to EU reforms. Both parties are relatively untested in power.  It is likely the coalition will be a strong voice for change, but what kind of change, and will they be able to influence Brussels?

The final coalition agreement is less radical than some in Brussels had feared, given the historic positions taken by the two parties. This emphasises that the immediate impact of the new government may be more limited than some expect. However, this should not obscure the long-term potential of a M5S-League coalition to significantly shift the position of Italy within the EU.

The impact of a new populist government on the prospects for policy change at EU level is twofold. On the one hand, the election of a government strongly critical of EU policy in a number of areas makes the need for reforms more difficult to ignore. At the same time, however, the new government’s radical approach, particularly when it comes to its economic policies, is likely to increase the gap between competing visions in Europe, making a breakthrough more difficult to achieve.

Expect the new government to diverge from previous positions taken by Italy at EU level. Demands to review key European policies, from overcoming the Dublin Regulation to the relaxation of fiscal rules governing the Eurozone, will become even more vocal. At the same time, support for further integration in other key areas including an integrated European defence, may turn more lukewarm or reverse altogether. In foreign policy, Italy will push for closer ties with Russia.

The future of the Italian economy, particularly in the light of the suggested economic and fiscal reforms, will be crucial. Radical proposals such as the introduction of a flat tax and of a universal citizenship income rest at odds with European fiscal parameters. Should the Italian economy take a turn for the worse, expect the new government to blame the EU – in which case tensions with Brussels would markedly increase.

Whatever happens, a M5S-League government continues the redrawing of Europe’s geopolitical map. Following Brexit and the election of Macron in France, the Italian elections have produced the third major change in power dynamics within the EU in a very short space of time.

Download PDF