Against a backdrop of rising populism, the standoff between Brussels and Rome is decisive for the future of the EU

In a measure unparalleled in the history of the Union, the European Commission has rejected the national budgets presented by the populist Italian government, because they do not tend to meet the deficit targets set. Neither Brussels nor Rome seem to have any intention of abandoning their positions, so an institutional confrontation threatens the European horizon.

▲ Giuseppe Conte, President of the Italian Government, with Vice-Presidents Luigi di Maio (left), leader of the 5-Star Movement, and Mateo Salvini (right), leader of the Northern League [Government of Italy]

article / Manuel Lamela

After seven months in government, the coalition formed by the 5-Star Movement and the Northern League have fulfilled what they promised and initiated, with the presentation of the budget of the Italian Republic, a process of confrontation and defiance with the European Union (EU). The authorities in Brussels accuse Italy of irresponsibly breaking the bonds of trust that forge and give meaning to the country. project European.

On October 16, Giuseppe Conte's executive presented a budget with a deficit forecast of 2.4%; While it is true that the figure is below the 3% limit set by the rules and regulations triples the amount previously agreed between Rome and the EU. Moreover, if Italy's public debt is 131% of GDP, making it the second highest in the monetary union, surpassed only by Greece, the new budget It will only increase it, as it aims to significantly increase the expense public.

The rise of the expense it seems to obey the populist interests of the leader of the Northern League and Minister of the Interior, Mateo Salvini, who has made no secret of his intention to seek support in the most fractured sectors of Italian society. Cultivating victimhood vis-à-vis Europe may yield a certain political return, but the example of Greece sample That attitudes of that subject they often end in tragedy, greatly weakening the state in the face of another possible debt crisis.

At the end of October, the European Commission rejected the draft Italian Budget –refund the budget of a Member State was an unprecedented act – and urged Rome to send a revised version within three weeks at the latest. The decision does not close the door to dialogue and negotiations, as indicated in his explanation of what happened by the Commissioner for Economic Affairs, Pierre Moscovici; "Today's opinion should come as no surprise, as the project of budget of the Italian Government represents a clear and intentional departure from the commitments made by Italy last July. However, our door is not closed. We want to continue our constructive dialogue with the Italian authorities. I welcome Finance Minister Giovanni Tria's commitment to this end and we must move forward in this spirit in the coming weeks."

But Conte's government assures that there is no plan B and that there is no chance of Italy taking a step backwards. Both Mateo Salvini and the leader of the 5-Star Movement, Luigi di Maio, both vice-presidents of the government, defended the Italian position and attacked Brussels claiming that it is normal for it to be unhappy, since it is the first time that Italy has freed itself from the clutches of the Eurogroup when it comes to deciding its economic policy. They also stated that, in their reply, the high school of Commissioners directly attacks the Italian people. And they accused Commission President Jean-Claude Juncker of "only talking to drunk people", something that no doubt sample little respect for institutions.

The tactic of simulating strength and determinism, which both Italian political formations used during the election campaign, is being reciprocated by the rest of the European leaders with an exercise of real power. The request of the Italian Minister of Finance, Giovanni Tria, for Italy to be able to enjoy the same opportunity that Portugal had in the past, when Brussels accepted that the Portuguese Prime Minister, Antonio Costa, did not apply the volume of cuts desired by the Commission, will be stifled by the reckless ways employed by the political leaders of the Italian Republic.

If Italy refuses to follow the recommendations given by the EU, there is a possibility that the Commission will consider imposing fines, which can amount to 0.2% of GDP, for failing to comply with the Stability and Growth Pact. But apart from sanctions, the EU has no veto power, nor does it have any other right skill To avoid entrance in force of the budget Italian. As several experts indicate, it will be the pressure of the markets that will make the Italian measure correct, thus avoiding a direct confrontation between Rome and Brussels that would damage both parties equally. Analysts at Goldman Sachs predict that "Italy's debt needs to get worse in order to exert adequate pressure and force the government to opt for other rhetoric."

Even if the European Commission manages to avoid a confrontation with Italy, it could be exposed to the campaign of victimhood by Italian populist groups, a tactic they already used successfully in the last elections. This is a tactic that is not of Italian creation, since since the crisis of 2008 various groupings and parties emerged with a position clearly opposed to Brussels, accusing the EU institutions of all the ills suffered by European societies. There are several examples; Brexit may be the most notorious given its relevance at the European and international level, but we must not forget the rise of formations such as the National Front in France, the Freedom Party in Austria or Podemos in Spain, the latter party that had its great public launch as a result of the 2015 European Parliament elections.

So far, Europe has not been able to find a way to prevent or neutralize the campaigns of demagoguery that proliferate in Europe today. Although some progress is being made in terms of the EU's communicative power, it is incomprehensible that Brussels is unable to effectively explain the project to the citizens of the Union. This is a deficiency that the project It has been the cause of many of the ills that have affected regional unity in recent decades. In this case, Europe has to contribute data that they are easy to understand for the average Italian citizen and that make him see that the measures adopted by his government will be harmful to Italian society in the near future, no matter how much they are sweetened by messages that respond to empty promises and messianic policies.

Another factor of concern within the Commission is the risk of contagion of the virus generated within the third Economics of the EU (excluding the United Kingdom). At first glance, it may seem possible that other Member States will be attracted to follow in Italy's footsteps; However, European officials say they firmly believe that their tough response to Rome will strengthen the monetary union and even increase integrity in areas such as banking unity. Externally, the decision will show that the EU's budgetary rigour is being met, generating confidence and security in the markets, and finally demonstrating that there is no respite from populist formations within Europe.