Italy veers right and away from EU’s centre of power
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Italians followed Giorgia Meloni’s advice and made history at the polls yesterday, securing her rightwing bloc a comfortable victory of more than 40 per cent of the total vote. While waiting for the final result, which will define the balance of power within the ruling coalition, we’ll look at how Meloni’s relationship with the EU is shaping up in comparison with that of her predecessor, Mario Draghi.
Over the weekend, EU ambassadors held their group “confessionals” with European Commission officials testing the red lines, wish lists and possible landing zones for a new round of Russia sanctions. The centrepiece of this package was thought to be a price cap on Russian oil, in line with G7 plans, but diplomats are now uncertain that the legal text will be ready this week.
Equally uncertain is the outcome of Friday’s extraordinary energy council, even though it is seen as the last chance to come up with solutions to the energy crisis in time for the heating season. We’ll bring you the latest on the REPowerEU funding quarrels.
And later today, agriculture ministers are having their own showdown about pesticides, with eastern member states demanding extra studies that will take into account the war and this summer’s drought.
Upheaval in Italy
For anyone who had any doubts left, yesterday’s Italian election confirmed that Giorgia Meloni is the complete opposite of her predecessor Mario Draghi. A worsening relationship with the EU is likely to be one of the results, write Silvia Sciorilli Borrelli in Milan and Valentina Pop in Brussels.
Exit polls put Meloni’s Brothers of Italy party ahead at 22-26 per cent of the vote, compared with only four per cent at the last election in 2018. When counted together with the other rightwing parties, Silvio Berlusconi’s Forza Italia and Matteo Salvini’s League party, Meloni’s coalition is expected to secure between 42 and 49 per cent of the total vote.
Long gone are the days when Draghi shaped the bloc’s response to the Russian aggression, having US Treasury secretary Janet Yellen on speed dial or co-authoring op-eds with France’s Emmanuel Macron.
Instead, an early glimpse of Italy’s diminished role on the EU stage was offered late last week in a question-and-answer session at Princeton University, when EU commission chief Ursula von der Leyen put Rome in the same basket with Budapest and Warsaw.
“If things go in a difficult direction,” she said when asked about the Italian elections, “I’ve spoken about Hungary and Poland, we have tools”. This was a reference to the rule of law disputes and funding freezes that both countries have experienced.
This sparked outrage in Rome, particularly in the rightwing camp, and online in the MIGA (“Make Italy Great Again”) circles, where von der Leyen was accused of interfering in the election. Salvini, leader of the rightwing League party, said that von der Leyen should either apologise or resign for “threatening a sovereign country on the eve of an election”.
Meloni herself was more measured, saying: “I don’t think she referred specifically to Italy, or it would be an unprecedented interference,” though she did point to the risk of the commission losing credibility.
But the ultimate proof that Meloni, who doubles as the president of the European Conservatives and Reformists party that includes Poland’s ruling party, Law and Justice (but not Hungary’s Fidesz), is the antithesis of the soft-spoken, apolitical central banker, came yesterday. Given that campaigning was banned on election day, 45-year-old Meloni took to TikTok and Instagram, where she posed with two cantaloupes (Meloni in Italian means melons, but is also slang for breasts), winking and saying “25 September, I said everything”. Draghi she most definitely is not.
Chart du jour: IMF record
The IMF’s lending to troubled countries has hit a record high, amid simultaneous crises that have pushed at least five countries into default — with more expected to follow.
Last chance council
With the winter “heating season” fast approaching, the stakes at Friday’s emergency energy council could not be higher: if ministers fail to come to an agreement, action may materialise too late to help consumers and businesses on the brink, writes Alice Hancock in Brussels.
Revisions by member states to the commission’s plan to bring down energy prices leave more wriggle room for national plans, according to the latest draft seen by Europe Express. EU governments can decide not to implement the so-called “solidarity contribution” on oil and gas-fired power plants if they already have a similar measure in place.
When it comes to the revenue cap on non-gas power generators, allowances have been made for coal, which has become an important source of energy for Germany and eastern European states as they have been steadily cut off from Russian gas.
But the EU is already falling well behind on its existing scheme for overhauling the bloc’s energy sector — namely the REPowerEU plan, announced in May.
Huge REPowerEU banners were unfurled over the commission’s headquarters last week (replacing the NextGenerationEU advertising for post-pandemic recovery funding). But implementing the measures is proving much harder than giving an advertising company more work.
One key question is where find the €210bn to fund REPowerEU as member states continue wrangle over it. An original plan to fund €20bn of REPower through selling permits that cover carbon emissions (pushing down the cost of polluting) has caused outcry among climate conscious member states.
A revised proposal by the Czech EU council presidency, seen by Europe Express, suggests that part of that €20bn should come from selling extra emissions allowances but part should also come from the EU’s innovation fund, which is meant to put money towards low-carbon technologies.
Unofficially the Czechs have suggested 80 per cent could come from the innovation fund and the remaining fifth from the emissions permits, according to two EU diplomats.
But “too large a group for the presidency to ignore” is against using the reserve emissions allowances in the format currently suggested, one of the diplomats said. The other said more than 20 countries were in favour of using part of the innovation fund.
The document also proposes a revision of the way that the overall money — which otherwise comes from leftover recovery and resilience funds set up during the pandemic — is allocated.
Under the original legislation, financing would be granted on the basis of how badly a member state had suffered economically during the pandemic. This meant that although Germany received about half of its gas from Russia, it would only receive about 8 per cent of the Covid recovery funding.
The Czechs have instead suggested an allocation based on a calculation that includes the share of fossil fuels in energy consumption, which would favour Germany but leave Italy, Spain and other southern European states out of pocket. Given the conflicting interests, finding a compromise solution will be quite an achievement.
Fans of pesticides
Member states opposed to an EU crackdown on pesticides will launch a fresh assault on the proposal at today’s agriculture council, writes Andy Bounds in Brussels.
A draft regulation on “sustainable use” of pesticides under discussion seeks to reduce the chemicals by half across the bloc by 2030. But a group of 10 member states are demanding a fresh impact assessment for the proposal.
The countries, mostly eastern members including Poland and Romania, say the commission’s original assessment predates the war in Ukraine and the drought this summer, which has reduced food supply and increased prices.
According to their position paper seen by Europe Express, they want a fresh analysis of:
the impact on food production in the EU
the increased dependence on food imports
the reduction of the EU’s resilience to crisis events disrupting supply chains, such as war in Ukraine, the pandemic or the severe drought
the impact of banning any use of plant protection products in sensitive areas like parks and nature reserves
the impact of phasing out some active substances categorised as “harmful” given the lack of alternatives
the differences in climate, crops and pests between member states
The policy paper criticises the decision to measure pesticide by kilogrammes per hectare rather than toxicity levels. Organic farmers use natural substances that are less damaging, but sprayed in larger quantities.
An EU official said there was no procedure to revisit an impact assessment so the real motive might be to torpedo the proposal altogether. Its passage through the council of member states has already been slowed and will stretch at least into next year.
“We have a common goal of the reduction of inputs [such as pesticides]. But we are facing a difficult situation. We need to find a balanced approach between reduction and production,” said an EU diplomat.
What to watch today
ECB chief Christine Lagarde speaks in the European parliament
Agriculture ministers meet their Ukrainian counterpart in Brussels
European parliament presents candidates for Sakharov prize for freedom of thought, including Ukraine’s Volodymyr Zelenskyy
. . . and later this week
Voting in the so-called referendums organised in the Ukrainian territories occupied by Russia ends tomorrow
Economy ministers meet in Brussels to discuss the single market emergency instrument on Thursday
Energy ministers meet for another emergency council on Friday
Nuclear contingencies: US and its allies are increasing their nuclear vigilance and deterrence, even as western officials believe that Vladimir Putin’s nuclear threats are unlikely to materialise.
LNG für Deutschland: The United Arab Emirates has agreed a deal to supply liquefied natural gas to Germany during a visit by chancellor Olaf Scholz, who is seeking to drum up alternatives to Russian energy.
FT webinar: Italy’s 2022 election
Join FT correspondents and guests tomorrow (1-2pm UK) for a subscriber-only virtual briefing on the Italian election results and what’s in store for Italy and Europe. Subscribers can register for free and submit questions for the panellists here.
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