“Wird Italien zum Totengräber der EU?” Sabine Beppler-Spahl interviewed me about Italy’s new government and the #EU. Published by Makroskop@FlassbeckEcon

On 10 March 2021, Makroskop published this interview focusing on Italy’s new government, the significant realignments in Italian politics, Italy’s relations with the EU and the impact of the COVID-19 Next Generation EU recovery funds.

The full interview in German can be accessed with a paywall here:

https://makroskop.eu/10-2021/wird-italien-zum-totengraeber-der-eu/

Here are some of my selected comments from the interview, edited in English:

“Far from being a great reset, the new government will be even more authoritarian than the previous one. An early indication of this was last week’s appointment of army general Francesco Figliuolo as the new Commissioner in charge of the COVID-19 emergency. In addition, a government decree was agreed last week which imposes new restrictions across the country until April 6, including postponing local elections from the spring until the autumn.”

“The €191.5 billion fund designated for Italy will not boost the Italian economy. Firstly, the majority of the funds which Italy will receive will come in the form of loans adding to the biggest public debt of any government in the EU. Italy’s public debt was estimated to be 156% of GDP at the end of 2020. Moreover, these loans amount to less than a net transfer to Italy of €4 billion a year, which is a little in comparison with the €160 billion Italy lost in GDP in 2020 alone. Then the grants that Italy is due to receive over six years will depend on Italy’s contributions to the EU budget. A fair estimate would be less than €10 billion net transfer a year for the next six years. Importantly, strict conditionality will need to be met by EU member states to spend money as outlined by the EU. Therefore, these funds will act as a mechanism for deepening the EU’s political and economic domination over member states.”

“Many core elements of the EU are already not functioning, including the single market, free movement of people for work or travel, and fiscal rules of the Euro area. Italy’s huge public debt, weak productivity and political instability could mean events in Italy precipitate the end of the EU. However, with the new government, stronger EU intervention in Italy through the recovery funds and declining opposition to the EU among leading political parties, Italy feels more dominated by the EU at present compared with a few years ago. Nevertheless, as the EU unravels and the crisis deepens, opposition will grow. Then the key question will be whether a political grouping in Italy has the capacity to create a national alternative.”

I thank Sabine Beppler-Spahl and Makroskop for the opportunity to give the full interview.

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