The EU’s Italy Headache: Crisis Averted or Crisis Deferred?
A crisis averted or a crisis deferred?
This is the question posed by the decision of Italian President Sergio Mattarella to agree to the new list of ministers presented to him by Prime Minister-designate Giuseppe Conte of the Eurosceptic Lega and Five Star Movement coalition, after the coalition’s original choice for finance minister, Paulo Salvona, was rejected, deepening a political crisis that has engulfed Italy since the March elections.
Critics and Supporters
To its critics this Lega (League; formerly Northern League) and Five Star Movement coalition is yet another example of the alarming rise of right wing populism across Europe, redolent of the 1930s, the last time Europe witnessed this kind of support for far right parties — and in similar conditions of economic recession and dislocation — culminating in with the continent being pushed into the abyss of fascism.
This depiction is not entirely without foundation. The leader of Lega, Matteo Salvini, has pledged to introduce mass deportations in response to the arrival of up to 600,000 migrants and refugees in Italy from North Africa, fleeing conflict in Somalia, Syria and Libya; this in a country whose 150,000-strong Roma community has already been subjected to racist attacks and demonization in recent times.
This being said, supporters of Lega and the Five Star Movement have no truck with this depiction, dismissing it as fearmongering on the part of apologists for an EU establishment that has extended itself in serving the interests of a global financial and corporate elite at the expense of ordinary people for far too long. Thus the Lega-Five Star coalition arrives as a much-needed and anti-establishment corrective, restoring sovereignty and justice to a country suffering under the juggernaut of austerity.
Lega-Five Star Coalition Throws Political Hand Grenade Into Heart of EU
Regardless of how anyone chooses to depict this Eurosceptic Italian coalition, there is no arguing it has thrown a political hand grenade into the heart of the EU, which starting with the Greek crisis of 2015, then Brexit in 2016 — and along with the growing popularity of centrifugal forces all across the EU — is making business as usual in Brussels an increasingly impossible dream.
Yet despite this reality lapping up against its door, Brussels continues to exist in a state of abject denial over the fact that the neoliberal economic model they hold so dear is not only broken it is dead, lifeless, rendered a corpse by the 2008 global financial crash and resulting austerity programs which have only succeeded in deepening the ensuing pain for millions — ordinary citizens who were not responsible for said crash but who have been forced to pay the price.
In other words, rather than take the necessary measures required to alleviate the pain and dislocation that has and continues to be wrought under an economic model which stands as a tyrant over society, Brussels prefers to continue to dig its own political grave by holding on to it for dear life.
The 3% deficit cap imposed under the strictures of the EU’s Stability and Growth Pact is the equivalent of economic asphyxiation at a time when borrowing to invest in order to inject aggregate demand into struggling economies — such as Italy’s, where 31.5% youth unemployment tells its own story — is non-negotiable.
US Nobel Prize-winning economist Paul Krugman is in no doubt where the problem lies when it comes to the EU, writing in TheNew York Times: “Even though Brussels and Berlin were wrong again and again about the economics — even though the austerity they imposed was every bit as economically disastrous as critics warned — they continued to act as if they knew all the answers, that any suffering along the way was, in effect, necessary punishment for past sins.”
In Brussels it is ideology not common sense or justice driving events, leading directly to the rise of Euroscepticism as the new normal. How could it be otherwise when we have seen the punishment Krugman describes being doled out to the many who were not responsible for the collapse of neoliberalism with austerity, while the few who were responsible — i.e. major banks and financial institutions — have been rewarded with tax cuts and the continuation of gargantuan salaries and bonuses for their executives?
EU Increasingly Anti-Democratic
Such a state of affairs is not only unjust it is beyond unjust? Indeed it is a recipe for the kind of anger that fuelled Brexit and which has propelled hitherto marginal parties such as Front National in France and the Lega-Five Star coalition in Italy to prominence.
Denying the democratic rights of the Italian people, as Italian President Sergio Mattarella initially did in vetoing the appointment of Paolo Salvona as the country’s finance minister at the behest of this Lega-Five Star coalition, before appointing former IMF bureaucrat Carlo Cottarelli as interim Prime Minister within an interim administration, further exposed the EU’s neoliberal obsession as incompatible with democracy and national sovereignty.
As for the outrageous intervention of EU Budget Commissioner, Gunther Oettinger of Germany, who in an interview with German television on the Italian crisis more or less declared that the Italian people were receiving their just desserts for daring to vote for populists, this is liberal hubris gone mad on the part of an EU bureaucracy that exists in a bubble, disconnected from reality.
The Unreality of Eurosceptic Voices
Here, though, we need to be careful. For just as EU officialdom is guilty of peddling a narrative rooted in unreality, so are many opponents of the EU, such as Nigel Farage, Marine Le Pen, and the leadership of the Lega-Five Star coalition.
Let us return here to Nobel Prize-winning US economist Paul Krugman, again writing in The New York Times, this time in advance of last year’s French elections: “I’ve been a harsh critic both of the euro and of the austerity policies followed in the euro area since 2010. France could and should be doing much better than it is. But the kinds of policies the FN (Front National) is talking about — unilateral exit from not just the euro but the EU — would hurt, not help, the French economy.” He ends his piece with a crucial point: “Just because Le Pen and economists like me are both critical of European policy doesn’t mean we have anything in common.”
To be fair to Marine Le Pen and others of her ilk though, where Paul Krugman misses the point is in failing to understand — or at least understating — the extent to which opponents of the EU are not only opposed on economic grounds. There are cultural factors at play also, a sense of societies undergoing seismic and worrying upheaval as a consequence of free movement and immigration. There is nothing to be gained in avoiding this reality either — nothing whatsoever. Public support for parties with radical anti-immigrant positions and policies, such as Lega and Five Star in Italy, can no longer be ignored or dismissed.
Lack of Left Alternative to Status Quo
What has been absent, almost completely, from the debate on the future of Europe and the EU is one in support of viable left opposition to the EU in its current neoliberal form, akin to a private club for rich bankers, corporate execs and large institutional shareholders.
To describe such an absence as unfortunate is putting it mildly. Why? Simply because a left analysis understands and holds migrants up not as the enemy within — coterminous with an army of EU footsoldiers invading other people’s countries — but as people compelled by the economic pressures wrought by low wages and a paucity of opportunity at home to uproot in order to seek better fortune elsewhere. In this respect they are exploited as cheap labour; in process of which they have been pushing down wages in some sectors in the societies in which they relocate to.
Here we are obliged to understand that neoliberalism is an economic system which not only sows grievous inequality within states but also between states; the latter being central to the upsurge in immigration that has taken place across the EU in recent years. Add to the mix the previously identified global economic recession, along with the refugee crisis emanating from North Africa and the Middle East, and you have yourself a perfect migration storm.
The point is that the only serious and viable way to control migration flow across the EU is by ending the ability of corporations to undercut pay and conditions, taking advantage of EU rules and regulations that are prejudiced in favour of their interests at the expense of ordinary working people.
Thus the harmonisation of pay and conditions across the EU is not only desirable at this point it is absolutely vital, as is controlling the overweening domination of the German economy within the eurozone. Bonn cannot continue to reap all the benefits when the economic weather is favourable, while bearing the least pain when the you-know-what hits the fan.
EU Must Reform or Die
As things stand the EU represents the worst of both worlds — i.e. monetary union without the necessary fiscal (political union) to make it tenable; and too much political union at the expense of economic sovereignty in periods of economic downturn and recession when the ability of its member states to borrow to invest is crucial.
Thus for the European Union it is now a case of reform or die. However with a non-negotiable plank of any such reform being an end to neoliberal austerity, and with neoliberal austerity a by-product of the union’s ideological foundations, there seems more chance of dead journalists rising from the dead in Kiev than serious reform being undertaken in Brussels at present.