Berlin, Germany (Weltexpress). At the instigation of its President, Mrs von der Lügen, the EU Commission recently stepped up its criticism of Italy for alleged ‘shortcomings in the rule of law’. This allows Brussels – as it has already done with Hungary – to block the disbursement of the reconstruction fund for Italy in order to force Rome to toe the EU/NATO/US line.
Neoliberal reforms
The Italian head of government Meloni is a model pupil in the implementation of the neoliberal social and economic reforms dictated by Brussels, which are the opposite of the original term ‘reforms’:
Extensive privatisation initiatives:this involves selling off critical infrastructure such as communication networks, the state railway company (Ferrovie dello Stato), Poste Italiane, the banking group Monte dei Paschi and the energy giant Eni to foreign corporations.
Labour market reforms: The Meloni government has promoted short-term employment contracts and abolished the basic income programme, which had previously supported the unemployed with an average of 567 euros per month. Despite criticism that these changes depress wages and weaken social safety nets, Meloni argues that they are necessary to stimulate employment.
However, she did not mention that around 40 per cent of Italian workers earn less than 10 euros per hour and that average wages have fallen by 2.9 per cent since 1990. Millions of Italians are emigrating in search of better opportunities, while Meloni stepped back from her strict immigration restriction to bring in more illegal and even cheaper labour and maintain the country’s wage-squeeze model.
EU Covid recovery fund: Italy is the largest recipient of the EU Covid recovery fund (around €208bn). In order to receive the money, Italy has adhered to the neoliberal economic guidelines. Among other conditions, this includes the privatisation of local public services.
The government in Rome has also pushed ahead with a series of ‘reforms’ in order to maintain the flow of money from the EU Covid recovery fund. This already happened under Meloni’s predecessor, the unelected former prime minister Mario Draghi, who was previously head of the European Central Bank (ECB) and before that a top Goldman Sachs manager. With the help of the neoliberal consulting firm McKinsey, Draghi initiated the privatisation of local public services and at the same time pushed through the transfer of decision-making powers from elected local representatives to unelected bureaucrats at the Italian competition authority, which is monitored by Brussels.
However, the EU’s Covid recovery fund will be cut off at the end of next year. Since Brussels cannot accuse the Italians of unfulfilled neoliberal ‘reforms’ in order to threaten to block the fund money in this way, the EU Commission seems to have looked for other ways to put pressure on Meloni or any other future Italian government. And, voilà, it worked: the EU Commission has placed Italy on the list for monitoring the rule of law. As a result of the action taken against Orbán’s Hungary, it is common knowledge that Brussels would also withhold billions in payments from the EU Covid recovery fund if Meloni were to deviate from the joint EU/NATO/US path. This means that Prime Minister Meloni or her successors have little room for manoeuvre, especially as the economic outlook is anything but rosy.
Any public dispute with Brussels over funds always has the potential to bring down the government in Rome. Because if there is a ‘crisis of confidence’ on the bond markets arranged by Brussels and the ECB does not intervene to help keep Italian borrowing costs low, it is the end of the line for whichever government is in power in Rome.
However, if Rome continues to dutifully implement the EU’s neoliberal ‘reform policy’, then the supposed cure for Italy’s economic situation will be more and more wage suppression, more market-oriented reforms, further cuts in social spending and increased privatisation. And if, as was to be expected, this has not worked in the past, the answer has always been to redouble neoliberal efforts. Meloni has done nothing to change this, and there is no sign that she and the Fratelli d’Italia party have a problem with it.
Political dynamics and EU relations
The EU’s pressure on Italy also involves political manoeuvring and strategic interests:
Rule of law as an EU political disciplining tool: the European Commission’s focus on rule of law shortcomings has been used as leverage with other countries such as Hungary and Poland to bring them in line with EU and US/NATO priorities. The same strategy seems to be at play in Italy to ensure that the country does not deviate from the neoliberal economic path and the EU/US/NATO foreign and security policy path.
In the area of foreign policy, Italy under Meloni has shown both continuity and deviation in certain areas. There are three major problem areas here:
Support for Ukraine: despite some internal criticism, Italy remains a strong supporter of Ukraine and is in line with the broader EU and NATO stance. Meloni’s coalition partners have expressed concerns about the economic impact of sanctions against Russia, but these have not changed the government’s official position.
Government members such as the Deputy Prime Minister and Minister of Infrastructure and Transport, Matteo Salvini, have often criticised that the economic war against Russia is damaging Italian interests. Italian government members have also been among the louder voices speaking out against French President Emmanuel Macron’s attempts to officially deploy European forces to Ukraine. Nevertheless, Meloni remains a strong supporter of Ukraine. And she has made it clear that her coalition partners like Salvini can say what they want as long as their votes do not hinder the West’s support in the proxy war in Ukraine.
Divided on the Syria issue? Italy, along with several other EU countries, has shown a willingness to normalise relations with Syria, which contradicts the preferences of Brussels and Washington, as Syria is allied with Russia.
Less than a fortnight ago, the foreign ministers of Italy, Austria, Croatia, the Czech Republic, Cyprus, Greece, Slovenia and Slovakia said they were ready to thaw relations with Syria in the hope that this would lead to the return of Syrian refugees. Italy has even sent a new ambassador to Damascus.
In a joint letter, the above countries call for the creation of an EU-Syria envoy who would be tasked with reinstating a Syrian ambassador in Brussels and designating 10 so-called ‘safe zones’ in Syrian government-controlled regions to which Syrian migrants in Europe could be returned.
Washington and Brussels will not be in favour of such a move to strengthen Syria, especially as Syria is an ally of Russia. Syrian President Bashar al-Assad met with Putin on 24 July and likely discussed restoring relations with Turkey and possibly ‘Russian military assistance’ to Syria in the context of Israel’s current rampage in the region and in particular with the aim of improving Syria’s air defences.
Relations with China: Meloni’s recent trip to China and the signing of a three-year action plan show a pragmatic approach to balancing relations with Beijing. While Italy remains cautious about fully embracing China’s New Silk Road, it is seeking to promote economic cooperation, particularly in the areas of renewable energy and electric vehicles.
Interestingly, the problems that the EU Commission allegedly has with the ‘rule of law measures’ appeared in the media at the time Meloni started her trip to China. In Beijing, Meloni signed some minor agreements, Italy’s head of state mainly asked for more Chinese investment and balance of trade during her five-day visit. She also made the obligatory speeches about China’s ‘support’ for Russia and Chinese ‘overcapacity’.
However, Meloni also said that Italy adheres to the one-China policy and rejects ‘decoupling’ and protectionism – despite Rome’s recent support for EU tariffs on Chinese electric vehicles.
The Chinese were polite and praised the relationship, but they are almost always like this (as long as Annalena Baerbock is not involved), continuing to patiently urge the EU to act in its own interests and not in the interests of the US. Chinese President Xi Jinping said that China is willing to import more high-quality Italian products and hopes that Italy will create a fair business environment for Chinese companies investing in Italy in return.
Meloni had struck a tough tone against China last year and even torpedoed Italy’s participation in China’s Belt and Road Initiative (BRI). Her change of heart may help other US vassals to recognise the discrepancy between the directives from Washington and the preservation of national prosperity. Some China watchers even celebrated Meloni’s trip as a sign that Italy and Europe are beginning to wobble in their tough stance on China and recognise the benefits of a partnership with China.
