Trade

How a 5Star-League government would scare Brussels

Invest in paracetamol. The populist alliance preparing to take charge of Italy is likely to provide EU officials with plenty of headaches.

For the first time since the EU was formed, one of the blocs founding members could soon be governed by leaders who have been openly skeptical of the European project. And thats just the start of it.

As the anti-establishment 5Star Movement and the far-right League prepare to take the reins of the eurozones third largest economy, here are six areas — from trade to migration to Russian sanctions — that are likely to have officials in Brussels holding their heads in their hands.

1. Economy

During the election campaign, League leader Matteo Salvini repeatedly said he is ready to ignore the 3 percent budget deficit limit imposed by EU rules. And if the government program agreed to by both parties is anything to go by, hell do just that. Electoral promises included in the program could cost up to €100 billion, according to the Corriere della Sera newspaper. Thats equivalent to about 6 percent of GDP, in a country with the third largest public debt in the world. The fiscal measures put forward by the two parties “could exacerbate tensions with Italys European partners, and we would expect the European Commission to take a very conservative approach,” British bank Barclays wrote in a note on Monday.

2. Migration

The League has promised to kick out irregular migrants and put Italians first when it comes to jobs and public housing. “We need a massive clean-up also in Italy,” is how Salvini put it in February. The 5Stars have struck a more moderate tone, but that hasnt stopped their leader Luigi Di Maio from describing NGOs rescuing migrants in the Mediterranean as “sea taxis.” Its against this backdrop that a new Italian government would join the EU discussion on a reform of its asylum system at a summit next month. Salvini has also objected to the European Commissions proposed seven-year budget, accusing it of taking money from farmers and local communities in order to give it to migrants. “I want to lead a government that starts saying no to Euro-craziness,” he said recently.

3. Russia

One of the first victims of a government under the 5Stars and the League could be the EUs Russia sanctions policy. In April, Salvini said in a tweet that when it comes to Moscow, he intends to scrap “absurd sanctions that are causing incalculable damage to the Italian economy.” Ties between the League and Russia are particularly tight; last year the party signed a “cooperation deal” with Vladimir Putins ruling party. 5Star lawmakers have also advocated scrapping sanctions, citing concerns for Italian entrepreneurs. The first testing ground will be Junes European Council when member countries will vote on whether or not to renew sanctions against Russia. Since unanimity is required, opposition from Rome would be enough to bring them to an end.

4. Illiberalism

One EU leader is likely to welcome a new Italian political order: Viktor Orbán. The Hungarian prime minister has often clashed with previous Italian governments, in particular over migration policy. Salvini, by contrast, congratulated Orbán on his recent reelection with a tweet: “Hungary voted following its heart and mind, ignoring the threats of Brussels and the billions of [Hungarian-American investor George] Soros.” The League also endorsed a letter sent by Orbáns eastern Visegrad Four alliance to Italys former Prime Minister Paolo Gentiloni, in which the group lectured Italy on migration.

5. Trade

Promoters of the EUs free-trade agenda are also likely to be disappointed by a populist coalition. The 5Stars have been critical of free-trade deals like the CETA agreement with Canada, which the current Italian government strongly supported. Meanwhile, the Leagues slogan is “Italians first,” an echo of U.S. President Donald Trumps “America first.” Salvini took his campaign to defend Italian agricultural products to Sicily, where he accused the EU of failing to protect European farmers. “Europe prefers Moroccan oranges and Tunisian tomatoes and olive oil,” he said, while walking through an orange grove.

6. European elections

As voters head to the ballot boxes to elect a new European Parliament next year, a populist government in Italy would be likely to give Euroskeptic parties an unprecedented platform. Salvinis League is still considering campaigning alongside Frances Marine Le Pen and other far-right forces. Indeed, the success of the League and the 5Stars in the Italian election received hearty support from Brexiteer Nigel Farage, who said in a recent interview that next years vote is a great opportunity “to put an end to that artificial creation that is Brussels.”

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