Giorgia Meloni shows Europe its true face – economics

Wishing you a year full of pride, success and optimism Giorgia Meloni Italy on New Year’s Eve. The head of government posed in front of a philodendron in a knitted sweater with a sparkling sparkler in her hand. On Instagram she promised her 2.4 million followers: “I will do my best, and the government with me, to give this unique nation a better future.” However, this can only work under one condition: “We all have to believe in it together,” wrote Meloni.

Things don’t look like that at the beginning of her second year of government. The mood presented by the social research institute Censis in its most recent annual report is sobering: for 80 percent of the Italians surveyed, the country is in decline. Almost half fear for their savings. Even among Meloni’s voters, after 15 months in office, one in two people are dissatisfied with how things are going Italy currently running. A proud nation? Oh well.

In addition, Meloni’s coalition is also not participating as desired. The Prime Minister said in a three-hour press conference at the start of the year that she was tired of pulling the cart alone. “I’m not willing to live this life if others don’t live up to their responsibilities,” she complained. It seemed as if Meloni no longer wanted to tolerate her colleagues’ penchant for unacceptable statements, missteps and affairs. For the first time, the party leader of the post-fascist Fratelli d’Italia did not deny the weaknesses of her leadership class.

So the question is where she gets her patriotic confidence from in difficult times. How is the country supposed to turn things around after 30 years of economic decline? Where does the government want to start in order to improve Italy’s future prospects in 2024? What should people who are worried, resigned or angry today hope for?

Italy’s economy is growing faster than Europe – she says

Meloni doesn’t give an answer. The Prime Minister doesn’t like to talk about the economy. Even in the press conference ten days ago, she hardly commented on the economic challenges that lie ahead of Italy. Their statements also remained very vague. The large number of untrue claims was even more noticeable. Meloni is particularly persistent in spreading her favorite lie: “According to estimates, Italian growth this year is above the European average.” The EU Commission expects the Italian economy to grow by 0.9 percent in 2024, well below the EU average of 1.3 percent. The central bank in Rome only assumes 0.6 percent.

But the Roman woman obviously has other priorities for 2024. Meloni’s intention is to consolidate her power in Italy and Brussels in the year of the European elections. The result is obvious: If the duplicitous head of government tried to show a sense of responsibility at the beginning of her term in office, nationalist election propaganda is now again determining her attitude. At the start of the year, government action was characterized by a harsh confrontation course with Europe and a backward-looking industrial policy. The ostentatiously stated continuity with her predecessor Mario Draghi is a thing of the past.

Giancarlo Giorgetti is now responsible for the change. The Italian finance minister will have to face colleagues from the other 19 eurozone countries in Brussels on Monday. The meeting is likely to be unpleasant for the compliant Lega politician. His colleagues have been waiting for years for Rome to clear the way for a reform of the euro rescue fund (ESM), which all other euro countries have long since agreed to. Giorgetti also welcomed the idea of ​​setting up a new emergency fund in the event of a major banking crisis. But then the government camp in Rome blocked the project shortly before Christmas. With the coalition’s votes, ratification of the treaty was surprisingly rejected in the House of Representatives. Giorgetti commented sheepishly: He was in favor of it, but it just wouldn’t have been right. In the Corriere della Sera star cartoonist Giannelli vividly imagined the Finance Minister’s appearance in Brussels: a faceless Giorgetti marches past a stunned Ursula von der Leyen with his briefcase in his hand.

If the feared “Orbánization” of Italy failed to materialize after Meloni’s election victory in 2022, the Italian is now taking on the role of preventer. “The idea of ​​Meloni as a controllable pro-European is over,” warned liberal MEP Guy Verhofstadt from Belgium. This will probably apply at least as long as Meloni vie for voters’ favor in the EU election campaign against her anti-European coalition rival, Lega leader Matteo Salvini. The interests of the country, which relies on Europe like no other, will have to wait.

Italy is the only country against the bank rescue fund

The first victim of the competition was the reform of the ESM, which was not met with dissatisfaction anywhere in the EU. “The Germans want to save their banks with our money,” said Meloni, inciting parliament against the reform. She thinks the solid Italian banks don’t need the ESM. The fact that the European states are giving Italy 194 billion euros from the reconstruction fund is a gift. The fact that the ECB bought almost 700 billion euros of public debt from Rome was a gift. Former EU Commission President Romano Prodi castigated the decision as an “act of political madness”. The fact is now: After the Italian vote, no country has access to the funds in the event of an impending bank failure. At the same time, Italy is blocking a major integration project: “The reform of the ESM is an important step towards completing the banking union,” said Belgian Finance Minister Vincent Van Peteghem before the Brussels meeting on Monday.

There will be another clash between Italy and the EU Commission on Tuesday. Meloni is relying on escalation in the age-old dispute over the opening of competition in the operation of beach resorts and street trading. Italy has been resisting the implementation of a corresponding EU directive since 2006. The refusal has already brought Rome two criminal proceedings in Brussels. Shortly before his fall, Draghi had enforced the expiry of the licenses. They should be put out to tender for the first time in 2024. His successor conceded the liberalization again. The Commission then gave Italy a deadline of January 16 to adapt to the rules that have been in force for 18 years. The country then goes to the European Court of Justice.

The climate between Meloni and Brussels has suddenly deteriorated. Last Thursday, Rome received harsh criticism over the planned abolition of the criminal offense of abuse of office by public servants. “The proposed change would decriminalize serious forms of corruption and hinder their detection,” said a Commission spokesman. Given the amount of money that is currently flowing to Italy from the reconstruction fund, the initiative particularly alarms the EU Commission.

April 15th will now be “Made in Italy” day

The fact that Meloni likes to keep his distance from the 194 billion program is also causing unrest. Until her coalition came into power in October 2022, there was a unanimous answer to the question about Italy’s opportunities: future investments from Europe. They were seen as a unique opportunity to modernize the country and free it from its chronic crisis. In her annual press conference, Meloni hardly said a word about the mammoth program. The topic has largely disappeared from public discourse. Rome has so far received 100 billion euros. Of this, 28 billion euros were also spent. In 2023, investments made in the first eleven months fell to 2.5 billion euros.

Global subsidy race, digitalization, climate neutrality – Europe is struggling not to miss the technological and economic connection in the global economy. And Italy? Prefers to get along alone. In industrial policy, efforts are made to maintain traditions rather than innovations. In 2024, a package of laws called “Made in Italy” came into force. Industry Minister Adolfo Urso ordered the establishment of a sovereign wealth fund for corporate investments. High school students will be able to attend a new “Made in Italy” high school starting this fall. April 15th was declared “Made in Italy” day. Traditional companies that are more than 50 years old must now report their planned business closure to the ministry in advance.

Looking backwards comes at the expense of the future. Italy’s declining competitiveness? The decline in direct investment from abroad? Urso doesn’t seem to be concerned with that. The formerly largest steelworks in Europe in Taranto is once again on the brink of closure. There is no plan as to how the southern Italian hut can survive. When the US company Intel broke its promise to invest five billion euros in building a semiconductor factory in northern Italy, hardly anyone cared. “As a country, we duck our heads and take cover,” writes Federico Fubini in the Corriere della Sera. This is not a good prerequisite for a change for the better.