Eurosceptics cheer amid market surge as Italy’s populists take control
A coalition between the 5-Star Movement and the League marks western Europe’s first populist government.
Three months of political deadlock ended as western Europe’s first populist government took charge in Italy, prompting cheers from the continent’s leading Eurosceptics and a surge in the Milan stock market.
The anti-establishment 5-Star Movement and right-wing League will swear in their cabinet later on Friday, capping a rollercoaster week of political and financial turmoil by reaching agreement with Italy’s president to drop a Eurosceptic economy minister.
Milan’s stock index opened up 2.5% and Italy’s borrowing rates eased further after having soared earlier in the week when it appeared that the country was heading towards new elections that could have turned into a referendum on the euro.
Congratulation and all good wishes to the new Italian Government. Stay strong!— Nigel Farage (@Nigel_Farage) May 31, 2018
Premier-designate Giuseppe Conte, who had promised to be the “defence attorney of the Italian people” in his first, failed bid to form a government, got a taste of the expectations many Italians have for his revived team as he reported for work.
He was confronted by a group of recently laid-off workers protesting outside parliament.
“You have to trust all of us,” Mr Conte assured them, after listening closely to the workers’ plight.
Bravo à la coalition de @matteosalvinimi et à la Ligue qui forment finalement le nouveau gouvernement italien. C’est une victoire de la démocratie sur les intimidations et les menaces de l’Union européenne.— Marine Le Pen (@MLP_officiel) June 1, 2018
Rien n’empêchera le retour des peuples sur la scène de l’Histoire ! MLP
Europe’s populists and right-wingers cheered the news as a slap in the face to Brussels, with French far-right leader Marine Le Pen tweeting: “Bravo to the coalition.”
The National Front leader, who shares the League’s anti-immigrant stance, added: “It’s a victory of democracy over intimidation and threats from the European Union. Nothing will stop the return of the people to the stage of history!”
Former Ukip leader Nigel Farage said: “Best of luck to to both of those parties, to both of those leaders. One thing though: Gotta stay strong, the bully boys will be after you.”
This is a reference to European Union officials in Brussels, who have made clear in recent days their concern – in occasionally undiplomatic terms – about the Eurosceptic direction of Europe’s third-largest economy.
European Commission president Jean-Claude Juncker said on Thursday: “I’m in deep love with Italy, bella Italia” – but he added that he refused to accept that all of Italy’s ills can be blamed on the EU.
“Italians have to take care of the poor regions of Italy,” he said. “That means more work, less corruption, seriousness. We will help them, as we always did. But don’t play this game, insisting and loading with the responsibility, the European Union.”
His comments sparked outrage in Italy, with League leader Matteo Salvini blasting them as “racist” in his victory speech in the League’s base in northern Lombardy.
Mr Salvini added: “With the new government, we’ll see how to make them respect the rights and dignity of 60 million Italians who want cooperation from Europe, not insults.”
Mr Juncker’s verbal lashing of a member state was unusual, especially since he hardly misses an opportunity to express his love for Italy, one of the founding member states of the EU. The Commission president had also chided one of his commissioners earlier in the week for comments deemed too harsh on Italy.
Stock markets in Italy and globally had plunged and Italian borrowing rates soared earlier in the week when it appeared the country was heading to new elections after President Sergio Mattarella vetoed the prospective partners’ first choice for economy minister, collapsing the proposed coalition.
Within a matter of hours, 5-Star leader Luigi Di Maio and League leader Matteo Salvini agreed on a compromise: Paolo Savona, who had expressed doubts about whether Italy should stay in the euro, was shifted from the economy ministry to the ministry for European affairs.
In his place at the economy ministry is Giovanni Tria, a mainstream economist at Rome University who is considered close to the Forza Italia party of ex-premier Silvio Berlusconi.