Will Italy’s new government be able to reboot the economy? With national debt at 131.8 percent of GDP, unemployment at 11.2 percent and one of the slowest growth rates in the euro zone, the Italian economy has been struggling for some time.
Italians are struggling as well. Austerity measures mandated by the European Union since the beginning of the decade failed to sort out longtime structural problems. Rome has few economic tools to jump-start the economy because euro-zone countries agree to follow E.U. monetary guidance aimed at stabilizing the currency for all euro-zone members.
Despite some E.U. concessions obtained by former prime minister Matteo Renzi, the country is still obliged to severely reduce its budget deficit and public debt to respect the European guidelines and avoid heavy economic sanctions.
Tensions are rising between Italy and the E.U. leadership over the lagging economy, resulting in a drastic shift in Italian public opinion. Italians are tired of living under the E.U.’s strict fiscal rules. That is our finding, which is based on data from surveys in 2013 and 2017 carried out by the University of Siena for the Istituto Affari Internazionali.
In 2013, the Siena survey indicated that a majority of Italians agreed on the need to reduce the country’s public debt, with only a minority ready to challenge the E.U. Survey results four years later, in 2017, reveal the majority no longer saw the debt as a national priority — and a strong plurality preferred to leave the E.U. rather than make new sacrifices to reduce the public debt to comply with the stringent European budgetary rules.
Italy’s 2018 elections mirror this attitude shift
The Italian general election in March 2018 was a political earthquake felt throughout Europe, as it resulted in victories for the country’s two largest populist parties and the sharp defeat of the incumbent Democratic Party. The Five Star Movement, an anti-establishment party founded by comedian Beppe Grillo, claimed more than 30 percent of the vote. The League, a nationalist, anti-immigrant party with close ties to the National Front in France and Viktor Orbán in Hungary, came in second with 17 percent.
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After several twists and turns, the two parties, once foes launching scathing attacks on each other throughout the campaign, agreed to form a government led by the relatively unknown Giuseppe Conte, a professor of civil law with ties to the Five Star Movement.
The new government’s agenda suggests that Italy might be on a collision course with the E.U. over the austerity measures. But just how far will Italy be willing to go?
Are Italians willing to accept continued austerity?
In 2013, the Siena survey asked whether Italy should respect its commitments to reduce the public debt and budget deficit or should ignore them to regain control of its economy. Survey questions then probed both groups about the implications of their answers. Those ready to comply with the debt obligations were asked whether they would have accepted new economic sacrifices if required by the E.U. Those willing to renege on the commitments were asked whether they were ready to run the risk of isolating Italy.
The figure shows these results: In 2013, more than 70 percent of the sample agreed that Italy should respect its E.U. commitments, and 39 percent were willing to accept new sacrifices. In contrast, 28 percent of respondents believed that Italy should ignore these financial commitments, with a majority of this group willing to risk isolating Italy from Europe.
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Broken out by party, there were some big differences — only the center-left Democratic Party had a majority willing to endure new economic burdens (59 percent). Substantial minorities in both the Five Star Movement and the center-right coalition — 26 percent and 34 percent, respectively — were ready to break with the E.U on budgetary policy.
Italian attitudes toward public debt and E.U. austerity measures (2013 and 2017)
Figure by Pierangelo Isernia and Gianluca Piccolino. Data: University of Siena for Istituto Affari Internazionali http://www.iai.it/sites/default/files/Rapporto_IAI-Circap_en.pdf http://www.iai.it/sites/default/files/laps-iai_2017.pdf.
Four years later, positions had hardened significantly. In 2017, the Siena survey asked a sample of Italians whether the public debt should be considered a threat to the national economy and should therefore be reduced even at the cost of new sacrifices — or if it should no longer be considered a priority. This time, 57 percent no longer considered the national debt a priority, while 43 percent considered it a priority.
Probing further, the 2017 survey asked those who did not think that the public debt was a priority whether they were willing to accept new cuts in social spending. Those that responded that the public debt was not a priority were asked whether they would have broken with the E.U. over this issue. This time, the results showed that a majority of supporters of all parties did not consider the ever-growing Italian debt a priority.
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The survey revealed that a substantial plurality (40 percent) of respondents were prepared to break with the E.U. on the issue. The majority of those willing to break with the E.U. came from the two parties now governing Italy: 48 percent of Five Star voters and 52 percent of League voters would be willing to break with the E.U. over the debt.
Is an Italexit a possibility?
These results would have been unfathomable a decade ago. Italy went from being one of the staunchest supporters of the E.U. and its economic policies to one of its fiercest and most acrimonious critics. This is a substantial public opinion drift from one of the founding European Community countries.
We think this is a clear sign that European solidarity and stability are at risk, and the possibility of an “Italexit” from the euro zone, or even from the E.U., can no longer be ignored.
Pierangelo Isernia is professor of political science at the University of Siena, Department of Social, Political and Cognitive Sciences.
Gianluca Piccolino is a PhD candidate in political science at the Sant’Anna School of Advanced Studies and a visiting scholar at the Cologne Center for Comparative Politics.