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This weekend Giorgia Meloni can celebrate her one-year anniversary as Prime Minister. That’s saying something in a country where a government is in office for only a year and a half on average. But Giorgia Meloni is not in the mood for champagne. For the first time it really rumbles. The reason: “It’s the economy, stupid,” to use a famous quip from Bill Clinton.
Gloomy economic prospects
The outlook for the Italian economy is not good. Economic growth this year and next year is significantly lower than forecast. And the budget deficit this year and next year will also be significantly higher than originally planned. This is dangerous in a country whose debt ratio is the second highest in the EU.
The markets are becoming nervous: The spread, i.e. the interest rate difference between Italian and German government bonds, which are considered safe, has once again exceeded the critical mark of 200 basis points today. The higher interest rates are costing Italy billions. Rome is already paying around 75 billion euros a year in interest on debts, more than twice as much as it spends on the army.
Meloni’s worthless promises
Giorgia Meloni is still increasing spending because she wants to at least partially fulfill her election promises. Low-income earners, those in the healthcare system and families with children should receive more money. That makes sense, because Italy has never had so few births since its founding in 1861, the population is among the oldest in the world and the female employment rate is only 57 percent (Switzerland: 80 percent). But there is not enough money that she can take in hand to achieve anything significant.
Meloni is in a dilemma. She is struggling with structural problems that she inherited, but she has also done too little to address these structural difficulties. Keyword migration: By the end of the year, as many migrants will arrive in Lampedusa as during the 2015/16 refugee crisis, but Meloni is still pursuing a dysfunctional policy of symbolic symptom control.
“No alternative Meloni”
And yet the “political situation in Italy is exceptionally calm and stable,” observes Giovanni Orsina, director of the School of Government at the renowned LUISS University in Rome. And he can also resolve this paradox: Over the last ten years, voters have repeatedly voted for protest: the left-wing Cinque Stelle rose and burned out again. The right-wing Lega triumphed in the 2019 European elections and collapsed three years later.
People voted for everything that was on the political market. And a year ago they finally gave Giorgia Meloni a chance. “Who should they vote for now if they are disappointed?” Orsina asks rhetorically, “there is no alternative to Meloni.” Your government partners cannot afford new elections at the moment because they are doing poorly in the polls. And the left-wing opposition, which is traditionally protest-friendly in Italy, hardly makes an appearance.