FRANCES D'EMILIO
Tue, October 17, 2023 premier in Italy's post-war history, concern was palpable abroad about the prospect of democratic backsliding and resistance to European Union rules. But since being sworn in as premier on Oct. 22, 2022, Meloni has confounded Western skeptics.
(AP Photo/Gregorio Borgia, File)
ROME (AP) — When Giorgia Meloni took office a year ago as the first far-right premier in Italy’s post-war history, many in Europe worried about the prospect of the country's democratic backsliding and resistance to European Union rules.
The European Commission president issued a decidedly undiplomatic warning that Europe had “the tools” to deal with any member, including Italy, if things went “in a difficult direction.” There were fears in Brussels that Rome could join a strident nationalist bloc, notably Hungary and Poland, in a clash with EU democratic standards.
But since being sworn in, Meloni, whose Brothers of Italy party has neo-fascist roots, has confounded Western skeptics.
She has steadfastly backed NATO support for Ukraine, especially on military aid for Kyiv against Russia’s invasion. That’s no small feat.
Her main governing coalition partners are parties whose leadership was long marked by pro-Russian sympathies — the League of Matteo Salvini, and Forza Italia, founded by Silvio Berlusconi, the late former premier who was feted at his last birthday with bottles of vodka sent by Russian President Vladimir Putin.
The first woman to be Italy's premier, Meloni "won out against Salvini and Berlusconi. She showed that she emancipated herself against these two male leaders,'' said political analyst Massimo Franco.
While Meloni ran an election campaign “raging against Europe″ and ”promising she would clash with Brussels over budget issues″ once in office, she didn’t do either, noted Tommaso Grossi, a policy analyst for the European Policy Centre, a Brussels-based think tank.
Meloni's first trip abroad as premier was to Brussels. After meeting with the EU's most powerful officials, including Commission President Ursula von der Leyen — who raised the democracy warning — Meloni ventured that the encounters probably helped “dismantle a narrative about yours truly.”
When Meloni was hosted at the White House in July by President Joe Biden, the welcome was warm – reflecting in part her apparent resolve to end Italy’s participation in a Chinese infrastructure-building initiative known as Belt and Road that has worried the West.
Fears for Italy's democracy have proved to be “exaggerated,’’ said Franco, who noted that Italy's president serves as a guarantor of the republic's post-war constitution. “The real risk for Italy is not authoritarian, it’s chaos, it’s an incompetent ruling class."
In her own words, Meloni's biggest challenge is illegal migration.
“Clearly I had hoped to do better on migrants,″ she told Italian Rai state TV in an interview marking her year in office. ”The results weren’t what we had hoped to see.”
Meloni had campaigned with an unrealistic — and unrealized — promise of a naval blockade of the northern African coasts where migrant smugglers launch overcrowded, unseaworthy vessels toward Italy. By mid-October, the number of migrants arriving by boat has nearly doubled to 140,000 compared to the same period a year ago.
Von der Leyen stood by Meloni’s side in solidarity on the tiny Italian island of Lampedusa, after some 7,000 migrants had stepped ashore there in just over one day last month. She borrowed one of Meloni’s favorite lines: “ We will decide who comes to the European Union, and under what circumstances. Not the smugglers.”
Tunisian and not Libyan shores are now the main launching site for smugglers’ boats. Meloni had lobbied heavily for an EU arrangement with Tunisia that offered the economically struggling country aid in hopes of encouraging a crackdown on the departures, but the agreement is in danger of unraveling.
Meloni, meanwhile, is feeling the heat from her ally-cum-rival Salvini, who appears determined to prove he's more “far right” of her, notably on migration, ahead of European Parliament elections set for June 2024, when the issue is expected to loom large.
As interior minister in a 2018-2019 populist government, Salvini kept rescue boats in the Mediterranean waiting days, even weeks, for permission to enter port to disembark migrants.
“With Salvini as (interior) minister, all this wasn't happening,″ said the regional affairs minister, Roberto Calderoli, sniping at Meloni after she appointed Salvini her transport minister, not interior minister as he had hoped.
Meloni criticized Italian judges who have defied a recent Cabinet decree that allows migrants who lost asylum bids and who come from so-called “safe” countries — like Tunisia — to be put in holding centers for as long as 18 months, pending repatriation. To avoid that, the migrants can pay a deposit of nearly 5,000 euros ($5,500) — a sum most can’t afford. Concluding those restrictions violate the Italian Constitution, some judges let the migrants go free.
Meloni contends the rulings support a long-held belief on the political right that Italy’s magistrates sympathize with the left.
The premier has had other setbacks. A Cabinet decree targeted banks with a tax on so-called “extra-profits” derived from higher interest rates on mortgages and business loans. But Deputy Premier Antonio Tajani objected, forcing the decree to be rewritten. Tajani holds the helm of Berlusconi's party, and the media mogul's family holds a large stake in an Italian bank.
When Meloni’s government sought to solve a shortage of Italy’s taxis — acutely felt during a boom in foreign tourists — by liberalizing issuance of new cab licenses, taxi drivers staged a nationwide 24-hour strike.
“I see, not a catastrophe, but very bad governance,″ Grossi said in a phone interview from Brussels to evaluate the premier's first year.
Her other goals include the protection of Italy's "traditional families;” Meloni campaigned with thundering cries against “gender ideology.” Making its way through Parliament, and modeled on a bill Meloni introduced while an opposition lawmaker, is a proposal to make it a crime for Italians to use surrogate maternity abroad.
Despite Brothers of Italy’s roots in a party formed by nostalgists for fascist dictator Benito Mussolini, Meloni has insisted that she doesn’t hold the “cult of fascism.”
After the Oct. 7 Hamas attack in Israel, she went to Rome's main synagogue and pledged to defend Jewish citizens against “every form of antisemitism.” Jews number fewer than 30,000 in Italy, a nation of some 57 million people.
The head of the Union of Italian Jewish Communities, Noemi Di Segni, said she’d like Meloni to be clearer about the harm Mussolini caused Jews. “For her it should be easy,″ Di Segni said in an interview . ”It’s the past.”
There are signs Meloni's perspective on history is evolving. On Monday, the 80th anniversary of the roundup of Jews in Nazi-occupied Rome, Meloni issued a statement decrying the “fascist complicity” in sending 1,259 people from the city — nearly all would perish — to Nazi-run death camps.
Since becoming premier, Meloni has topped surveys of eligible voters, hovering near 30% — compared to the 26% of votes her party garnered in the 2022 election.
“The lack of a progressive, strongly pro-European alternative is definitely missing in Italy, and that also, of course, helps Meloni feel more stable,” said Grossi.
For her second year, Meloni pledges to work for a constitutional reform to make the premiership directly chosen by voters, in hopes of producing more stable governments. Currently, Italy's president asks someone likely able to command a parliamentary majority the task of forming a government.
Since 1946, Italy's governments have lasted an average of 361 days.
___
Associated Press writer Raf Casert in Brussels contributed to this report.
Meloni Braces for Italy’s Reckoning in Rating-Review Cascade
Alessandra Migliaccio and Alice Gledhill
Wed, October 18, 2023 at 2:51 AM MDT·4 min read
0
(Bloomberg) -- With the curtain falling on Italy’s budget show for 2024, it’s time to read the reviews.
ROME (AP) — When Giorgia Meloni took office a year ago as the first far-right premier in Italy’s post-war history, many in Europe worried about the prospect of the country's democratic backsliding and resistance to European Union rules.
The European Commission president issued a decidedly undiplomatic warning that Europe had “the tools” to deal with any member, including Italy, if things went “in a difficult direction.” There were fears in Brussels that Rome could join a strident nationalist bloc, notably Hungary and Poland, in a clash with EU democratic standards.
But since being sworn in, Meloni, whose Brothers of Italy party has neo-fascist roots, has confounded Western skeptics.
She has steadfastly backed NATO support for Ukraine, especially on military aid for Kyiv against Russia’s invasion. That’s no small feat.
Her main governing coalition partners are parties whose leadership was long marked by pro-Russian sympathies — the League of Matteo Salvini, and Forza Italia, founded by Silvio Berlusconi, the late former premier who was feted at his last birthday with bottles of vodka sent by Russian President Vladimir Putin.
The first woman to be Italy's premier, Meloni "won out against Salvini and Berlusconi. She showed that she emancipated herself against these two male leaders,'' said political analyst Massimo Franco.
While Meloni ran an election campaign “raging against Europe″ and ”promising she would clash with Brussels over budget issues″ once in office, she didn’t do either, noted Tommaso Grossi, a policy analyst for the European Policy Centre, a Brussels-based think tank.
Meloni's first trip abroad as premier was to Brussels. After meeting with the EU's most powerful officials, including Commission President Ursula von der Leyen — who raised the democracy warning — Meloni ventured that the encounters probably helped “dismantle a narrative about yours truly.”
When Meloni was hosted at the White House in July by President Joe Biden, the welcome was warm – reflecting in part her apparent resolve to end Italy’s participation in a Chinese infrastructure-building initiative known as Belt and Road that has worried the West.
Fears for Italy's democracy have proved to be “exaggerated,’’ said Franco, who noted that Italy's president serves as a guarantor of the republic's post-war constitution. “The real risk for Italy is not authoritarian, it’s chaos, it’s an incompetent ruling class."
In her own words, Meloni's biggest challenge is illegal migration.
“Clearly I had hoped to do better on migrants,″ she told Italian Rai state TV in an interview marking her year in office. ”The results weren’t what we had hoped to see.”
Meloni had campaigned with an unrealistic — and unrealized — promise of a naval blockade of the northern African coasts where migrant smugglers launch overcrowded, unseaworthy vessels toward Italy. By mid-October, the number of migrants arriving by boat has nearly doubled to 140,000 compared to the same period a year ago.
Von der Leyen stood by Meloni’s side in solidarity on the tiny Italian island of Lampedusa, after some 7,000 migrants had stepped ashore there in just over one day last month. She borrowed one of Meloni’s favorite lines: “ We will decide who comes to the European Union, and under what circumstances. Not the smugglers.”
Tunisian and not Libyan shores are now the main launching site for smugglers’ boats. Meloni had lobbied heavily for an EU arrangement with Tunisia that offered the economically struggling country aid in hopes of encouraging a crackdown on the departures, but the agreement is in danger of unraveling.
Meloni, meanwhile, is feeling the heat from her ally-cum-rival Salvini, who appears determined to prove he's more “far right” of her, notably on migration, ahead of European Parliament elections set for June 2024, when the issue is expected to loom large.
As interior minister in a 2018-2019 populist government, Salvini kept rescue boats in the Mediterranean waiting days, even weeks, for permission to enter port to disembark migrants.
“With Salvini as (interior) minister, all this wasn't happening,″ said the regional affairs minister, Roberto Calderoli, sniping at Meloni after she appointed Salvini her transport minister, not interior minister as he had hoped.
Meloni criticized Italian judges who have defied a recent Cabinet decree that allows migrants who lost asylum bids and who come from so-called “safe” countries — like Tunisia — to be put in holding centers for as long as 18 months, pending repatriation. To avoid that, the migrants can pay a deposit of nearly 5,000 euros ($5,500) — a sum most can’t afford. Concluding those restrictions violate the Italian Constitution, some judges let the migrants go free.
Meloni contends the rulings support a long-held belief on the political right that Italy’s magistrates sympathize with the left.
The premier has had other setbacks. A Cabinet decree targeted banks with a tax on so-called “extra-profits” derived from higher interest rates on mortgages and business loans. But Deputy Premier Antonio Tajani objected, forcing the decree to be rewritten. Tajani holds the helm of Berlusconi's party, and the media mogul's family holds a large stake in an Italian bank.
When Meloni’s government sought to solve a shortage of Italy’s taxis — acutely felt during a boom in foreign tourists — by liberalizing issuance of new cab licenses, taxi drivers staged a nationwide 24-hour strike.
“I see, not a catastrophe, but very bad governance,″ Grossi said in a phone interview from Brussels to evaluate the premier's first year.
Her other goals include the protection of Italy's "traditional families;” Meloni campaigned with thundering cries against “gender ideology.” Making its way through Parliament, and modeled on a bill Meloni introduced while an opposition lawmaker, is a proposal to make it a crime for Italians to use surrogate maternity abroad.
Despite Brothers of Italy’s roots in a party formed by nostalgists for fascist dictator Benito Mussolini, Meloni has insisted that she doesn’t hold the “cult of fascism.”
After the Oct. 7 Hamas attack in Israel, she went to Rome's main synagogue and pledged to defend Jewish citizens against “every form of antisemitism.” Jews number fewer than 30,000 in Italy, a nation of some 57 million people.
The head of the Union of Italian Jewish Communities, Noemi Di Segni, said she’d like Meloni to be clearer about the harm Mussolini caused Jews. “For her it should be easy,″ Di Segni said in an interview . ”It’s the past.”
There are signs Meloni's perspective on history is evolving. On Monday, the 80th anniversary of the roundup of Jews in Nazi-occupied Rome, Meloni issued a statement decrying the “fascist complicity” in sending 1,259 people from the city — nearly all would perish — to Nazi-run death camps.
Since becoming premier, Meloni has topped surveys of eligible voters, hovering near 30% — compared to the 26% of votes her party garnered in the 2022 election.
“The lack of a progressive, strongly pro-European alternative is definitely missing in Italy, and that also, of course, helps Meloni feel more stable,” said Grossi.
For her second year, Meloni pledges to work for a constitutional reform to make the premiership directly chosen by voters, in hopes of producing more stable governments. Currently, Italy's president asks someone likely able to command a parliamentary majority the task of forming a government.
Since 1946, Italy's governments have lasted an average of 361 days.
___
Associated Press writer Raf Casert in Brussels contributed to this report.
Meloni Braces for Italy’s Reckoning in Rating-Review Cascade
Alessandra Migliaccio and Alice Gledhill
Wed, October 18, 2023 at 2:51 AM MDT·4 min read
0
(Bloomberg) -- With the curtain falling on Italy’s budget show for 2024, it’s time to read the reviews.
A relatively muted investor reaction to the loosened deficit plans of Prime Minister Giorgia Meloni’s government will now be tested by a series of credit assessments, along with the judgment of European Union officials.
At least five companies are scheduled to provide updates on Italy’s ratings in coming weeks. The potential Nov. 17 announcement by Moody’s Investors Service may be the most sensitive pressure point, given that it assesses the country at Baa3, just one notch above junk, with a negative outlook.
Traders broadly see a downgrade from any of the firms as unlikely, but nerves about Italy’s debt may stay taut. The yield spread over German 10-year notes, a common gauge of risk, is close to its highest levels this year at 203 basis points.
“We believe that the bar to a downgrade to non-investment grade remains high — though the ratings agencies may fire a shot across the bows to ensure Italy retains a degree of fiscal discipline,” said Gareth Hill, senior fund manager at Royal London Asset Management.
Meloni’s plan to run wider deficits exceeding the European Union’s 3%-of-output limit until 2026 — a year later than planned — was revealed at the end of September. Parliament ratified it, and a coalition cabinet meeting on Monday signed off on spending including tax cuts and measures to encourage parenthood.
Finance Minister Giancarlo Giorgetti has said he doesn’t fear the judgments of sovereign-ratings analysts and that the budget will be “well received” in Brussels. That confidence rests on his view that the less restrained outlook for the public finances still has prudence at its heart.
What Bloomberg Economics Says...
“Meloni’s ambition to honour costly electoral promises has put Italian debt back in the spotlight. Her new budget plan offers only a modest boost to growth next year, and little long-term benefit to the economy. The public finances are in worse shape as a result and the attention the plans have drawn raises risks at a time when borrowing costs are rising.”
—Simona Delle Chiaie, euro-area economist
Even so, Fitch Ratings flagged concern on the deficit profile last week, and analysts are focusing on the fallout from rising borrowing costs after the European Central Bank’s fastest round of interest-rate hikes on record.
While that’s impacted government across the euro area, Italy’s massive debt load, exceeding 140% of output, potentially renders it more vulnerable. The nation’s 10-year borrowing costs recently breached 5% for the first time in more than a decade.
“Idiosyncratic risks are likely to come to the fore as these rating decisions come close,” said Rohan Khanna, head of euro rates strategy at Barclays Plc in London. “We cannot rule out outlook changes, at the minimum.”
Rating Review Schedule
Italy’s failure to comply with EU fiscal rules is also raising worries, given that its eligibility to tap the ECB’s crisis tool rests on its compliance with the bloc’s regime. The existence of that backstop has arguably helped keep its spreads in check for much of this year.
Analysts at Scope Ratings wrote in a report this month that the availability of the ECB’s so-called Transmission Protection Instrument is a “key driver” of its relatively high BBB+ assessment on the country.
While a suspension on the EU’s 3% deficit rule will end next year, there’s expectation that Brussels won’t fully enforce that regime given the challenging economic backdrop.
“If the relations between Italy and Europe become sour, and Italy really steers away from the fiscal rules, that could lead eventually to an excessive deficit procedure and that could limit the possibility of the TPI,” said Nicola Mai, portfolio manager and sovereign credit analyst at Pacific Investment Management Co. “Having said that, I do think that there’s going to be coordination between Italy and Europe.”
One test of that relationship will be an assessment due on Nov. 21 by Brussels officials on the budget plan, which may give clues about how stringently they will hold Italy to account. Economic forecasts from them a few days earlier, on Nov. 15, will also point to the challenges the country faces.
Italy’s finance chiefs have been at pains to stress that borrowing costs, while higher than they were, are manageable. Central bank Governor Ignazio Visco told Bloomberg Television last week that “there are no signs” that spreads are at a point that would require intervention.
Giorgetti himself suggested to reporters on Monday that he doesn’t perceive a danger zone as such. “There are no levels on spreads that are red or yellow or other,” he said.
--With assistance from Dayana Mustak and Jorge Valero.
(Adds level of Italy’s spread over Germany in fourth paragraph.)
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