Daniele Lepido, Chiara Albanese and Tommaso Ebhardt
Mon, September 19, 2022
(Bloomberg) -- Matteo Salvini, a leader of the right-wing coalition expected to win Italy’s elections, wants a 30 billion-euro ($30 billion) state subsidy to cap the cost of energy for businesses in the run-up to winter.
“My problem is how to ensure Italian industries survive the next months with surging energy bills,” Salvini said in an interview at the Milan exhibition center Monday, citing companies which have started to furlough workers because of the price spikes. “If the avalanche starts, when we get into government we would only be able to handle the consequences.”
Salvini, who fostered political ties with Vladimir Putin’s party before his invasion of Ukraine, said that he had changed his mind about the Russian president and doesn’t see any chance of new gas deals with Moscow for Italy.
Countries across the European Union are struggling to ease the financial pain of an energy crisis that has jolted the continent. The European Commission, the EU’s executive arm, has proposed a mandatory cut on energy use in the bloc, as well as steps to ease the crunch in markets caused by ballooning collateral demands.
The coalition led by Giorgia Meloni of the far-right Brothers of Italy party, and which includes Salvini’s anti-migrant League, is expected to win Sunday’s general elections in a context closely-watched by investors because of Italy’s precarious finances. Meloni herself is likely to succeed Mario Draghi as prime minister.
Salvini is urging Draghi to expand the budget deficit to fund the new measures, before he exits the premiership. Salvini pledged that if his request is met, he would refrain from seeking a further increase in Italy’s mammoth debt -- an option worrying investors. Draghi has ruled out such a measure.
French Model
Salvini’s proposal would also be financed by additional tax revenue collected by the state due to higher inflation. “France recently designed a price cap for energy prices domestically,” Salvini said. “We aim for the same program, to allow industrial production to reach the summer.”
France will budget 16 billion euros to limit power and gas price increases to 15% for households and small companies next year to ease the burden of the energy crisis on consumers. Prices would have risen by 120% without the limits, French Prime Minister Elisabeth Borne said on Sept. 14.
Salvini had long been cultivating ties with Russia, and said in 2018 that he felt at home in Russia and not in some EU countries.
Change on Putin
“My opinion about Putin has indeed changed amid the war, because when someone starts invading, bombing, sending tanks into another country, well, everything changes,” Salvini said. He added that the League had voted in favor of all sanctions against Russia, but questioned whether such measures actually work.
Salvini also backed Italy’s commitment to the NATO military alliance, saying that international relations “don’t change for us.” In May, Salvini opposed enlargement of the alliance, saying this would not favor peace.
The League leader warned against China as a business rival. “For the near future China is our main competitor, we need to fear it because it’s not a democracy and they are ready to invade the European market with their own products and goods, starting with the automotive industry with the new electrification trend,” he said.
Salvini sought to reassure investors about a possible right wing government, saying it will be stable and united regardless of which party prevails inside the coalition.
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