How Italy is facing a crucial election

This is an audio transcript of the Rachman Review podcast episode: How Italy is facing a crucial election

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Gideon Rachman
Hello and welcome to the Rachman Review. I’m Gideon Rachman, chief foreign affairs commentator of the Financial Times. This week’s edition is about Italy, which faces a crucial election on September the 25th. At the moment, the polls suggest that the largest single party will be the Brothers of Italy and that therefore the party’s leader, Giorgia Meloni, will be prime minister. That’s causing consternation in some quarters because the Brothers of Italy has roots in the fascist-influenced politics of postwar Italy. My guest this week is Nathalie Tocci, director of the Institute for International Affairs, a think-tank based in Rome. So what does the rise of the Italian populist right mean for Italy and for Europe?

Benito Mussolini
[Speaking in Italian]

Gideon Rachman
The oratory of Benito Mussolini captivated many Italians in the interwar years. But after the war, the vast majority of Italians repudiated Mussolini and fascism. But not all of them. There was a small post-fascist movement. And as a young woman, Giorgia Meloni once praised Mussolini as a good politician. She’s since repudiated these remarks and now likens her political position to that of British conservatives.

Giorgia Meloni
In these decades, our nation has experienced an unprecedented social and economic decline, with a progressive deterioration of public finances, the quality of life of citizens, and the competitiveness of our businesses. With the left in power, the state has turned hostile to citizens and businesses, increasingly violating individual liberties. Yes, freedom. Freedom is for us, the most precious wealth. This compass guides our historical judgment. The Italian right has handed fascism over history for decades now, unambiguously condemning the suppression of democracy and the ignominious anti-Jewish laws.

Gideon Rachman
Even so, the European Union authorities and the financial markets will be watching events in Italy with attention. It’s not just the rise of the populist right that’s a concern. It’s also that the outgoing prime minister is Mario Draghi, who’s widely respected internationally and often described as the man who saved the euro during his tenure as head of the European Central Bank. So when I got Nathalie Tocci on the line from Rome, I started by asking her about Draghi. What will his departure mean for Italy and the EU?

Nathalie Tocci
In Europe leadership in many ways is — and has been for a while now — in short supply. And Draghi certainly contributed to filling that vacuum. You know, he brought with him, obviously, you know, the credibility and reputation of what he had done in the past. But I think, you know, sort of also during his tenure as Italian prime minister, he played an extremely important role in, you know, sort of formulating sanctions on Russia, particularly as far as sanctions on the Russian central bank. He was playing an important role currently in the midst of the energy crisis with ideas on energy price caps. He has plenty of ideas and was contributing to them together with Emmanuel Macron on the revision of the growth and stability pact. So he brought with him sort of, you know, competence and credibility and in a sense sort of, you know, it was no longer the France and Germany alone. It was, you know, sort of perhaps if we just kind of recall the image of, you know, sort of Macron, Scholz and Draghi on that train to Kyiv, all of a sudden, the sort of political geography of Europe was changing. And I think it had started also to rejig and change certain old assumptions, you know. It used to be, and particularly now in the context of the Ukraine war, you know, sort of the tendency of east versus west. And in many respects, Italy’s Draghi sort of broke many of those assumptions, you know. It was Draghi that supported very strongly Ukraine’s EU candidacy that I think played an important role in persuading particularly Germany as well as France on accepting that. So in a sense, it was the sort of Italy that was playing a rather unusual role and it was kind of breaking these stereotypes of divisions, which I think particularly at this point in time are just so damaging to the union.

Gideon Rachman
So Draghi was seen as a pillar of stability in Brussels and elsewhere. But obviously there will now be concerns about the nature of the new government, particularly given that it’s sometimes described as far-right, the Brothers of Italy, which apparently are likely to be the largest party. Is that how it’s looking?

Nathalie Tocci
Yes, it is. But perhaps before I sort of move on to Brothers of Italy, I think a sort of broader comment about what the next Italian parliament may look like. And in a sense, this is a sort of reassuring message. The current parliament has probably been the maddest parliament that Italy has ever had, particularly if we think about exactly Italy’s international positioning, attitudes towards the United States, Europe, Russia indeed. You basically had a 60 per cent of parliament. If we put together Five Star Movement, Lega, and I would argue Forza Italia as well — Berlusconi’s party — that had taken rather friendly attitudes towards the Kremlin, towards China, Eurosceptic attitudes and, you know, sort of on and off when it comes to the transatlantic relationship. But if we take current polls as an indication, basically the support of those three parties taken together is going to be halved. Now moving on to Brothers of Italy, Meloni’s party, what does it mean and what does it not mean? I think as far as the transatlantic relationship is concerned, broadly speaking, the Euro-Atlantic orientation of Fratelli d’Italia, I’m not worried. Meloni has taken consistently a very strong position against Russia and in support of Ukraine. She has very close relations with the United States, particularly obviously with the Republican party, traditionally never had, if you like, relations with the Kremlin. That doesn’t worry me particularly. I think what’s more worrying is in a sense what you know and where she stands as far as Europe and the European project is concerned. But in terms of, you know, why is it that she’s doing so well? I think this really comes down to probably a couple of things. I mean, I think, firstly, it is simply change. I mean, the Italian public is amazingly fickle, you know. It’s, if you just take the last few years, it’s essentially taken Matteo Renzi from 40 per cent support down to, well, if he’s lucky, 2 per cent now. It’s taken the Five Star Movement from 32 per cent to now probably around 10 per cent. Salvini’s Lega from, you know, 40 per cent down to, you know, 12, 13. It wouldn’t surprise me if Meloni does amazingly well, simply because she was the only party, hers was the only party in opposition. But it wouldn’t equally surprise me if in a couple of years time she’s not, she’s polling half that size, you know, half that size. So I think there’s an element of change. But then, I think there’s also something to be said about the fact that she is a very, very smart communicator, and her communication differs widely. If you compare the way in which she’s talking to international audiences as opposed to how she’s talking domestically. Domestically, you know, she kind of puts on her, you know, sort of Garbatella Roman accent. And she speaks in an incredibly fiery way that sort of hits people, you know, right in their, you know, guts. You know, she has this extremely direct way of communicating and internationally, she’s just kind of putting a very, very moderate face on. Now, you know, it sort of remains to be seen what happens after the election, you know, which of these two souls eventually emerges?

Gideon Rachman
Yeah. I mean, we should talk in a minute about her coalition partners as well. But just sticking with Meloni for a moment, I mean, I think that many people outside Italy are slightly perplexed by the way in which there hasn’t been a sort of total repudiation of Mussolini across the spectrum. And look, she did say these positive things about him, albeit a long time ago now. But what does it mean when people say the Brothers of Italy has its roots in post-fascism or in the more fascist, sympathetic people after 1945? Is that still an important thing?

Nathalie Tocci
Well, you know, there are elements that sort of stem from that ideology, which, you know, sort of mutatis mutandis in the 21st century, you know, still raise eyebrows, you know. It is definitely a nationalist party with a very strong social agenda. So I guess that is, sort of, you know, you can trace the roots of the party and fascism in that respect. She has made some kind of rather odd comments about, you know, having to address youth deviations through, you know, sport. And you can see, you know, sort of, again, where the fascist roots and that kind of thinking sort of lie. Obviously and, you know, this is the kind of most evident thing, you know, the anti-migration stance, sort of adherence to replacement theories. And this links back to the strong connections also with the Republican.

Gideon Rachman
Replacement theory being the argument that Muslim migration to Europe is so high at the moment that it’s almost like a conspiracy to displace white Italians.

Nathalie Tocci
Precisely. Which is, you know, exactly the kind of argument that you kind of hear in, in the United States, you know, amongst the Republican, the sort of Trumpian Republican right. And so you can see where also those connections come from. And then obviously, you know, the sort of anti-LGBTQ stance. So I would say that there is both, if you like, sort of post-fascist roots that come from this nationalist social agenda, but also with the sort of 21st century twists that mainly revolve around migration and LGBTQ.

Gideon Rachman
And you said that you were reasonably confident that she would be pretty conventional on the transatlantic stuff and on Ukraine. But you had a question mark about the European Union. There have been Eurosceptic politicians in power or close to power in Italy before, and yet they’ve always sort of tended to tack back to the EU. I think for whatever reason, maybe it’s just too economically damaging for Italy to take a Eurosceptic position. But where do you think she would actually position herself in the EU? Might she, for example, look to people like Orban, to the Polish government and so on, that populist right section?

Nathalie Tocci
What I meant is that whereas on the transatlantic relationship, I think she genuinely believes in the west and the idea of a strong transatlantic relationship. I think she genuinely, what she believes deep down is, you know, she’s a nationalist. She’s Eurosceptic almost by definition. Now, having said this, what does it mean to be Eurosceptic in 2022, 2023, as opposed to 2011, 2012, in the midst of the eurozone crisis or 2015 in the midst of the migration crisis? Well, you know, in a post-pandemic Europe with next-generation EU funds sort of coming in to Italy and over 200bn coming into Italy, you know. A Europe which is associated not with austerity, but, you know, not with giving money, but receiving money at a time in which, you know, for all the attempts being made at hyping up migration, this has actually not been a major issue in the election, you know. This is about the energy crisis. It’s not about migration and energy crisis to the extent that it’s obviously linked to the war in Ukraine. You know, context matters. And so I think that whereas, you know, there’s no love lost on the European Union, I think that she will probably not take a particularly Eurosceptic stance. And then this also connects to the other part of the question, which is indeed, you know, who are her allies going to be? You know, she probably would have loved a world in which there was a sort of cohesive Visegrad group with whom she, you know, particularly the sort of nationalist, populist side of which she had established very strong relations with. But at the moment, there is no such thing in many ways. And, you know, the war in Ukraine has kind of shattered that. And so, you know, to be friends only with Viktor Orbán, well, that’s not a lot of company around the European Council. So if she’s smart — and I think she is smart — she will necessarily have to make other friends, which I think largely explains why she is essentially putting this moderate look in a sense, in the way in which she talks to international audiences. You could then argue whether this is kind of, you know, genuine or not, is almost, you know, beside the point. The point is how is it that she’s going to act? And I think, as your question was suggesting, she may actually not have much of a choice and she will have to adapt to what the context is.

Gideon Rachman
She is going to be in coalition, as you pointed out, with the . . . probably with the League and with Berlusconi, both unpredictable elements in their own right. And although, as you point out, she’s been pretty pro-Ukraine, Salvini — the leader of the League — was famously in league with Putin, once wore a Putin t-shirt, I believe, outside the Kremlin. So how big a factor is he going to be and how big a factor will Berlusconi be?

Nathalie Tocci
Yes, they will be in government, but then one should also add that they are in government now. You know, Salvini has been in two of the three governments of the current legislature. Berlusconi has been in one — the current one — Draghi’s government. If you end up having, you know, Salvini, that goes down from his current 17 per cent in parliament to 12, 13, and if Berlusconi also goes down to around, I would argue probably between eight and probably not even 10, well, then the weight is actually going to be reduced compared to what it is now. So all this to say that the problems that we’ve seen in the attitudes of these parties are going to remain, you know, especially when it comes to Salvini, I think it’s extremely worrisome what those ties to the Kremlin are. But it’s a problem today and it will continue to be a problem tomorrow. I don’t expect it to be a bigger problem tomorrow compared to what it has been up until now.

Gideon Rachman
And, of course, one of the reasons that these parties will be in government is not just their own political strength, but also the weakness of the centre-left, which seems to be in real trouble. And this also seems to be becoming . . . I don’t know whether it’s a Europe-wide pattern, but it’s certainly very analogous to what’s happened in France, where the left collapsed in the presidential election. How parlous a state is the Italian centre-left in and what do you account for it?

Nathalie Tocci
Fratelli d’Italia’s polling at around 25 per cent. The Democrat party is polling at 24 per cent. So actually it’s not doing that badly at all. The problem is, and this i, and perhaps this is the kind of main problem of the left, is that it just tends not to agree with each other. And so whereas in the case of the right, you have Fratelli d’Italia, Berlusconi and Salvini together and therefore collectively come to probably again, according to polls, 48 per cent, according to the latest polls. The centre-left is fragmented in at least three groups. So there is the Democrat party at around 25 per cent. There is the Five Star Movement. I mean, who wants to get together with them after they got Draghi to fall? But they are still polling at around 10 per cent. And then you have this third poll, which basically is a kind of, I would say, more of a liberal-centre rather than left, Calenda, Renzi. And they’re polling at around, you know, six, seven per cent. So if you actually took those three together, they’re polling more or less the same as the right. But the problem is that they are not together. And a third of the seats in parliament are determined by first past the post. So whereas the two-thirds that are proportional representation will see all this being reflected into seats, but the third that is allocated through first past the post is obviously gonna give, you know, the prize to the coalition and yeah, there’s only one coalition and that’s the rightwing one and not one to the left.

Gideon Rachman
I see. So that is the picture that seems likely to make Meloni prime minister. But just to sort of conclude, I mean, one has to wonder whether it’s a real poisoned chalice for her. I mean, it’s a question I have, you know, in the UK where we’re about to have a new prime minister. Presumably, Italy also has this energy problem and as well, some hints that it may be once again in danger of being sucked into a debt crisis if interest rates rise and if the markets lose confidence. So how do you see the economic situation that Meloni and her colleagues will have to handle?

Nathalie Tocci
Well, it’s dire. And, you know, I mean, I’m not in her head, obviously, but my guess was that actually, she would have been quite happy for Draghi to carry on until next spring. It wasn’t actually Fratelli d’Italia that made Draghi fall. It was the Five Star Movement and Lega and Berlusconi. And I think the reason why she would have much rather had Draghi carry on through this absolutely dreadful autumn and winter and spring that will come is precisely because of, you know, we are already in an energy crisis, it’s already beginning to unleash an economic crisis. And she doesn’t have, obviously, the credibility that Draghi has. You know, it would have been hard for Draghi as well. It would have been hard for anyone, but let alone someone that has to, you know, sort of build up her credentials and has a lot of scepticism, obviously, surrounding her, given her background. So yes, indeed, she’s going to be at an extremely complicated predicament and I think this largely explains why she’s actually being very cautious in terms of, you know, not talking too much about how she would like to renegotiate the recovery fund. Actually coming out very explicitly against the idea of . . . in Italian, we say, [speaking in Italian]. So basically issuing more debt. And on this, there’s actually an axis between her and Draghi, which, you know, sort of may come across as slightly odd bedfellows. But, you know, precisely because she is the one that knows that most likely she will have the responsibility of government. Unlike other parties, she has taken a very firm stance on the budget. Now, the question is, you know, is all this going to be enough, you know, because indeed, the depth of the crisis that we’re in and we will be in is, you know, as I said, it would have been probably almost impossible even for a Draghi to face, let alone Meloni. So big question marks there.

Gideon Rachman
Is there a sense of crisis, do you think, amongst the public yet? Obviously, those of us who spend our time worrying about sort of debt-GDP ratios or price rises to come are concerned. But do you get the sense that people are concerned, as they are in the UK, that they may not be able to pay their bills, that really hard times are ahead?

Nathalie Tocci
Absolutely. I mean, this is all people talk about. The fact that milk went up to €2. The energy crisis, I mean, this is literally all people talk about. It is all, you know, sort of a switch on also any television. Essentially there is this huge mismatch between the energy crisis and everything connected to it, and this kind of, at times, slightly surreal election campaign in which, you know, just recently, all of the major, sort of, candidates beyond obviously using obsessively, sort of, all platforms have now also, sort of, made that big entry on to TikTok. So there’s this kind of, you know, real mismatch between a crisis that indeed is very much felt and an election campaign that makes at times surreal promises about, you know, abolishing VAT and makes all sorts of sort of, you know, surreal promises at a time in which, you know, not only people feel they’re on the verge of a precipice, but that we’re already falling.

Gideon Rachman
And Italy, just to conclude, I mean, it’s particularly vulnerable in some respects, isn’t it, because it was particularly dependent on Russian gas and also has this very, very high debt level, which is manageable when interest rates are low, but less manageable when inflation is rising and interest rates are rising.

Nathalie Tocci
The debt issue is the real problem. I would say, you know, it was manageable when there were low interest rates and it was manageable when there was a Mario Draghi that literally could have got away with almost anything with the markets. A completely different scenario, the one that we’re gonna be in after the 25th of September, whoever, you know, whatever happens, and whoever wins. I think when it comes to the dependence on Russian gas, actually, and perhaps that, to conclude on a slightly more positive note, Italy really has made miracles over the last few months. You know, our dependence, as you were saying, used to be 40 per cent. It is now around 10 per cent. And this is not only because of the reduction of flows from Russia, but it’s also because of the additional gas that is coming in, particularly from Algeria, as well as obviously LNG and Azerbaijan. There’s a lot of work that has been, you know, sort of, going on over the last months, particularly vis-à-vis north Africa, Caucasus and sub-Saharan Africa, that has actually placed Italy in a very different predicament in this respect, if we compare it to Germany. Geography helps. You know, we have infrastructure. We have pipelines that Germany doesn’t have. It has one, and it is being shut down. It’s kind of connected to the wrong source. Italy is not in that situation. But, you know, to give, you know, real credit to the Draghi government, this is something that this, I think is probably its biggest success and probably the biggest reason why there was so much joy in the Kremlin when he ultimately fell.

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Gideon Rachman
That was Nathalie Tocci ending this edition of the Rachman Review. Thanks for listening and please join me again next week.

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