By James Sweet III | Italy
In Italy, the xenophobic League party, led by Matteo Salvini, has organized a governing coalition with the Euroskeptic Five Star Movement, led by Luigi Di Maio. This new government would be heavily based on Euroskeptism, populism, and skepticism to refugees and immigrants.
Giuseppe Conte, a law professor at Florence University, is going to become the next Prime Minister. With the nation being the third largest economy in the European Union, other members fear for the future for the European Union’s overall economy. Both parties support cuts in taxes while also increasing spending, a harmful move for a nation whose debt has recently soared to become 132% of its total GDP. For comparison, that is the second worst in the European Union, with Greece being the first. 15% of the European Union’s total GDP derives from Italy, and 23% of its debt belongs to the nation.
The two parties have agreed on three major policies: universal basic income, tax cuts, and a lower pension age. The proposed basic income would be €780 a month, which is equivalent to $917. The proposed cuts to taxes would lower the rates to a number between 15% and 20%. Capital Economics predicts that, if these policies were enacted, Italian debt would rise by 150%, relative to their GDP, over the next five years.
Federico Santi, an analyst at Eurasia Group, stated, “their plans on fiscal policy would result in a huge increase in the deficit, a blatant violation of EU deficit rules. If implemented in their current form [these proposals] would still result in an additional €100 billion ($117.8 billion) in additional spending or lower revenue.”
Member nations, like France, are concerned over the new government of Italy, with the Economy Minister of France, Bruno Le Maire, believing the stability of the Eurozone would be at stake. Euroskeptism is rising in the Union, and it’s only time until they reach a breaking point.