In many ways, the hardest part is yet to come for Giorgia Meloni, the new Italian Prime Minister. While the war in Ukraine rages, Italy remains in the grip of a dramatic energy crisis and galloping inflation; the country has one of the lowest employment rates in the euro zone, its public debt is at an exorbitant level 150 percent GDP and the International Monetary Fund projects its economy is in recession next year.
Yet while Italy’s most right-wing government since World War II was sworn at the presidential palace this weekend, the main feeling that crossed Meloni’s face was relief. Despite the landslide victory for the right in a snap election last month, coalition talks over the composition of the new cabinet have been anything but a cakewalk.
Meloni is a nationalist arsonist whose party of the Brothers of Italy draws its roots from the Italian post-fascist tradition. She has spent much of her political career attacking the European Union and praising the overbearing Hungarian Prime Minister Viktor Orban. Now she must reassure financial markets as well as Italy’s wary allies in Europe and Washington without appearing to sell herself to diehards back home.
In many ways, the hardest part is yet to come for Giorgia Meloni, the new Italian Prime Minister. While the war in Ukraine rages, Italy remains in the grip of a dramatic energy crisis and galloping inflation; the country has one of the lowest employment rates in the euro zone, its public debt is at an exorbitant level 150 percent GDP and the International Monetary Fund projects its economy is in recession next year.
Yet while Italy’s most right-wing government since World War II was sworn at the presidential palace this weekend, the main feeling that crossed Meloni’s face was relief. Despite the landslide victory for the right in a snap election last month, coalition talks over the composition of the new cabinet have been anything but a cakewalk.
Meloni is a nationalist arsonist whose party of the Brothers of Italy draws its roots from the Italian post-fascist tradition. She has spent much of her political career attacking the European Union and praising the overbearing Hungarian Prime Minister Viktor Orban. Now she must reassure financial markets as well as Italy’s wary allies in Europe and Washington without appearing to sell herself to diehards back home.
The thirst for ministerial posts and the pro-Russian stance of his two junior partners – Matteo Salvini, leader of the far-right League party, and Silvio Berlusconi, leader of the conservative Forza Italia party, did not make the task any easier. In audio recordings leaked to the press last week, Berlusconi could be heard saying he had just exchanged “very sweet” letters as well as bottles of vodka and lambrusco wine with Russian President Vladimir Putin.
During the decade-long period in opposition leading up to his election victory, Meloni hardly had to negotiate with anyone. In recent weeks, however, she has played a tough political game with considerable ability.
“Meloni has emerged as a real stateswoman in this phase” compared to her two allies, said Arturo Varvelli, head of the Rome office of the European Council on Foreign Relations, a think tank.
Its strategy: to stab ultra-conservatives in its ranks by giving them prestigious roles that come with little real power and handing out the most crucial ministries to respected moderates in a bid to reassure observers abroad.
“His cabinet is a mixed bag,” said Roberto D’Alimonte, a politics professor at LUISS, a university in Rome. “A part represents the new Meloni, who defends NATO, Ukraine, Europe and fiscal responsibility. Then there is the “identity” part of the bag, the old Meloni.
The role of President of the Senate, technically the second highest office in Italy, went to Ignazio Benito Maria La Russa, a co-founder of the Brothers of Italy who proudly displays a variety of effigies of Benito Mussolini in his home and who is, incidentally, a fan of the Native American resistance, naming his sons Geronimo; Cochis, spelled differently from Cochise; and Apache.
As La Russa’s counterpart in the lower house of parliament, the new majority elected Lorenzo Fontana, an ultra-Catholic member of the League who once called the idea of children with same-sex parents ” dirt “. New family minister Eugenia Roccella also holds staunchly conservative views on LGBTQ and abortion rights.
Despite these controversial appointments, in many crucial policy areas, Meloni was also careful to signal continuity with his predecessor: the pro-EU and pro-market Mario Draghi, who could count on the unconditional trust of Brussels, Paris and Washington. Meloni must carefully manage the Brothers of Italy’s transition from a small radical party to a party that won just over a quarter of the vote in the last general election, with many voters deciding to give it a chance without necessarily sharing its more radical positions of years past, D’Alimonte said. “He’s a transitional figure,” he added.
For the post of foreign minister, Meloni chose Antonio Tajani, a Brussels insider who served as EU commissioner and president of the European Parliament and immediately reaffirmed Italy’s unwavering support for Ukraine. The choice of defense minister – Guido Crosetto, considered a moderate within Meloni’s relatively pro-NATO party – is another reassuring sign for Kyiv. Shortly after the swearing-in ceremony, the Ukrainian President Volodymyr Zelensky took on an optimistic tone, congratulating Meloni and adding that he “[looked] look forward to continued fruitful cooperation.
The level of international scrutiny was even higher over Meloni’s choice for finance minister. Although Meloni and Salvini have toned down their euroscepticism in recent years, they have both called on Italy to drop out of the euro zone in the past. Despite the country’s sky-high public debt, the right-wing coalition campaigned on a long list of costly measures, including lower taxes, higher pensions and higher benefits, with almost no guidance on how to pay all of this. Britain and the fruit fly life of former British Prime Minister Liz Truss showed the folly of such a course. Italy’s last right-wing government, led by Berlusconi, was also forced to resign in 2011 after its reckless spending policies spooked financial markets, sending Italian government bond yields skyrocketing.
In this context and to guide the country through these difficult times, Meloni chose Giancarlo Giorgetti as Minister of Economic Development. While a senior member of Salvini’s League, Giorgetti’s calm demeanor and belief in balanced budgets make him far more similar to Draghi than his party boss.
“The markets know Giorgetti. Brussels bureaucrats know Giorgetti and they trust him,” D’Alimonte said. “The problem with Giorgetti is that he is not a political heavyweight, so we will have to see if he is able to stand up to Salvini when tough choices have to be made.”
Investors seem to be giving Meloni some slack, at least for now. On Monday, after the first day of trading since he was sworn in, the spread between Italian and German bond yields had fallen as the Italian stock market‘s The FTSE MIB index rose by almost 2 percent.
EU authorities are also taking note of Meloni’s efforts to boost his credentials, but remain suspicious, said Gregory Claeys, senior researcher at the Bruegel think tank. “The details of the economic platform of the right seem worrying, but in terms of the choices that have been made in terms of ministers, you can tell that Meloni has tried to go against those fears”, Claeys said. EU leaders are in “wait-and-see mode”, he added.
The continuing awkwardness between Meloni and other Western European leaders was clear in a hastily arranged meeting with the French president on Sunday. Emmanuel Macron, in town for a long-planned visit with Italian President Sergio Mattarella and the Pope. No media were invited to the talks and no press conferences were held afterwards. Sources in Macron’s camp spoke of a “frank and demanding exchange” and said Meloni would be judged “on his actions”.
With Italy’s economic stability largely dependent on the EU’s massive COVID-19 stimulus package as well as joint European efforts to tackle the energy crisis, Meloni seems keen to shed her image as a maverick and to find a seat at the adult table. While her government may well leave a lasting mark on the country when it comes to domestic issues such as abortion rights, “she fully understood the constraints and limits of Italian foreign policy,” Varvelli said.
But Meloni must figure out how to balance a coalition that hates and woos Europe, helps Ukraine and pampers Putin, and despises a balanced budget almost as much as soaring bond spreads.
“We don’t know who she really is yet,” D’Alimonte said. “It’s what she does in the next few months that will tell us.”
