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From left to right, Lega leader Matteo Salvini, Forza Italia leader Silvio Berlusconi, and Brothers of Italy leader Giorgia Meloni during a campaign rally in Rome.
What We're Watching: Italian election, Chinese anti-corruption drive, Lebanese bank shutdown
Italy votes!
Italians head to the polls on Sunday and are likely to elect Italy’s first far-right leader since World War II. Giorgia Meloni, 47, who heads the Brothers of Italy Party (which has neofascist roots) is slated to become Italy’s next PM. Polls indicate Brothers will win about a quarter of the vote, while her three-party coalition, including Matteo Salvini’s far-right Lega Party and Berlusconi’s Forza Italia, is projected to secure around 45%. Four years ago, Brothers – established in 2012 – reaped just 4% of the vote, but it has benefited recently from the left’s implosion as well as Meloni’s refusal to back the centrist Draghi government, which collapsed this summer, making her the most formidable opposition figure (Salvini and Berlusconi backed Draghi). Italy has convoluted voting rules but will be voting on 400 seats in the Chamber of Deputies (lower house) and 200 seats in the Senate – the winning coalition needs a majority in both. Meloni aims to dilute the EU’s power over Italian affairs, though she believes Rome must preserve close ties with Brussels, and she supports EU and NATO efforts to contain Russian aggression. Read this primer to learn more about what Meloni does – and doesn’t – stand for.
Xi's war on corruption — and disloyalty
A Chinese court on Thursday gave one of Xi Jinping’s former anti-corruption top dogs a death sentence that will be commuted to life in prison after two years for ... bribery. Fu Zhenghua, a former police chief and justice minister who led multiple probes under Xi's former anti-graft czar, pleaded guilty in July to taking $16.5 million in bribes, presumably in exchange for the commutation. The plot thickens: Fu was busted amid a wider crackdown on a ring of dirty ex-cops led by Sun Lijun, who’s awaiting his own sentence for bribery. But as far as the ruling Communist Party is concerned, their most heinous crime was setting up a political faction separate to Xi’s, which is why its members are getting hefty punishments. (Juicy tidbits of their case were featured in “Zero Tolerance,” a slick state-sponsored docuseries that celebrates the success of Xi's war on graft.) The timing is interesting too: in about three weeks, the CCP is holding its 20th Party Congress, where Xi is expected to get a precedent-shattering third term as secretary-general. The party has a penchant for taking down dirty officials ahead of big dates, but going after a clique of cadres disloyal to Xi sends a clear message: don’t cross the big boss.
Unbanked Lebanon
Lebanese can’t catch a break. They’ve had their dollar savings withdrawals strictly limited since the Lebanese pound dropped in late 2019. And now, two weeks after a woman held up a bank to withdraw part of her own savings to pay for her sister's cancer treatment, inspiring copycat heists, the banks have simply shut. Citing security concerns, the country’s banking association says all banks will remain closed indefinitely. ATM services in pounds are available, but the shutdown is expected to make things even worse for the 80% of Lebanese who already struggle to pay for their daily needs with the weakened currency amid sky-high inflation. This is just the latest twist in Lebanon’s descent into economic collapse, which started three years ago. The government, meanwhile, keeps giving the International Monetary Fund the runaround on the economic reforms required to unlock a $3 billion bailout. One of the conditions is to give small depositors access to their savings.
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From left to right, Lega leader Matteo Salvini, Brothers leader Giorgia Meloni, and former Italian PM and Forza Italia leader Silvio Berlusconi.
How will the far right run Italy?
On Sept. 25, Italians head to the polls to vote in a snap parliamentary election triggered by the collapse of PM Mario Draghi's fragile coalition government in late July. Political instability and short-lived governments are nothing new in Italy, which has churned through 18 of them in the past 34 years. Now, though, an alliance of far-right parties is widely favored to win power for the first time since the end of World War II in a country with bitter memories of fascist rule. What will that government look like, and what can we expect from it? We asked Eurasia Group analyst Federico Santi.
What would a far-right government look like?
It'll probably be a coalition led by the far-far-right Brothers (Fratelli d’Italia) Party, with the far-right Lega and the center-right Forza Italia parties as junior partners. If the Brothers and Lega do extremely well, there’s a chance they could do without Forza Italia (probably the smaller of the three), but this is unlikely, and they sort of come as a package.
Who would lead it?
The smart money is on Giorgia Meloni, Brothers’ shrewd leader, since the deal is that whichever party wins the most votes gets to pick the prime minister. Brothers will most likely win the most votes (and seats) of the three, and probably of any party in fact. The next PM need not be the leader of the party; in fact, looking at the last few years, prime ministers come and go every 1-2 years on average, but party leaders tend to be more durable. So it’s possible that Meloni could select another high-profile figure for the post, contenting herself to run the show from the sidelines. But she has recently dispelled this, signaling very clearly that she has her eye on the top job.
What would it mean for migration?
Given the structural drivers of migration (population growth, climate change, drought, food prices, food insecurity), the problem is only going to get worse. With chronic instability in Libya, and an unpoliceable border at sea, Italy cannot rely on Europe’s time-tested methods of co-opting autocrats to police migration flows from Algeria, Egypt, or Turkey.
Lega boss Matteo Salvini was Italy's interior minister from 2018 to 2019, when his party briefly ruled the country in a coalition with the populist 5-Star movement after the 2018 election. So we have an idea of what that looks like: generate as much noise as possible while shifting as much of the blame as possible to the EU for what is in fact a largely intractable problem. In practice, this may involve denying safe harbor and rescue rights for migrants in waters under Italian jurisdiction, while clamoring for a more equitable distribution of asylum-seekers in the EU, and more EU funding to deal with the issue – neither of which is likely.
The other option, to which Italy has resorted with some success in the past, is paying off Libyan militias to police flows — effectively holding tens of thousands of migrants in jails and internment camps, usually in appalling conditions.
What about relations with the EU?
Meloni has so far been careful to come across as moderate and as a credible partner, including vis-à-vis Brussels and Washington. None of the three parties wants to ditch the euro, let alone the EU. Having seen what the Eurozone debt crisis meant for Greece, they are not keen to go down that road, and probably won’t openly antagonize the EU initially.
However, Brothers and Lega remain fundamentally populist nationalist parties. Their basic instinct will be to reject unpopular demands from Brussels if they go counter to their electoral interests, or to foster and leverage anti-EU sentiment to shore up support for their cause in the face of a faltering economy.
Despite the leadership’s moderate turn, Brothers’ base remains rooted in the far-right, as do its rank-and-file lawmakers. Competition within the coalition also has the potential to lead to a dangerous race to the bottom, notably between Lega and Brothers — who are competing for the same electorate to some extent. Indeed, this was arguably one of the main structural factors leading to Draghi’s downfall.
Also, the fringe Italexit party — which does want Italy out of the EU — will probably meet the 3% of the vote threshold to enter parliament. Although it'll likely remain out of the coalition, Lega and Brothers will have a new competitor to contend with outside government as well.
Lastly, the broader macroeconomic context is also unhelpful. Rising inflation will prompt greater demands for fiscal stimulus and salary increases across the board, which the government will struggle to manage.
What would it do with Draghi’s stalled reforms to get EU pandemic recovery cash?
Many of the reforms required for the December review have already been legislated, so in a sense, the hard work is done. However, in most cases, the government still has to issue the legislation necessary to actually implement the reforms, which will be difficult to do by the end of the year. So the December tranche (just under 1% of GDP) of EU money will at the very least be delayed well into 2023, with direct repercussions for Italy's economic growth outlook.
Going forward, the reforms calendar will suffer, and further disbursements will also be at risk. There is also a chance the new government might want to renegotiate parts of the Recovery Plan, which could lead to further delays.
Do these far-right parties stand a better or worse chance of getting along compared to previous coalition governments?
Italy’s complex electoral system gives electoral coalitions a big advantage over parties running individually. Lega and Forza Italia formed part of Draghi’s national unity coalition. Meanwhile, Brothers had been leading the opposition and climbed steadily in the polls as a result, mainly at Lega’s expense. Yet, true to form, the three quickly closed ranks once elections were triggered, and announced they would run as a bloc.
Going forward, they also have strong incentives to keep the coalition together, though competition between them could have important implications for the policy outlook. Only a significant decline in support for any of the three parties could increase the risk of another snap election.
Russia's President Vladimir Putin attends a ceremony to present state awards for outstanding achievements on Russia Day in Moscow.
What We’re Watching: Putin’s progress, Italy’s right turn, a not-so-great Iraqi resignation
Putin’s progress
It’s been a positive few days for Russia’s president and his war on Ukraine. Russian forces appear close to capturing the strategically important city of Severodonetsk, bringing them a step closer to control of the Donbas region of eastern Ukraine. If they can accomplish that, Putin may well move to annex the entire area. Ukrainian officials have called urgently for faster delivery of heavy weapons to counter superior Russian firepower, but plunging stock markets in Europe and the US will strengthen the arguments in the West from those who oppose continued large-scale financial and military help for Ukraine. A new report from the independent Centre for Research on Energy and Clean Air finds that higher global oil prices and a loophole that allows Europe to receive boycotted Russian oil via India have kept Russia’s oil revenue relatively high. Meanwhile, Turkey’s President Recep Tayyip Erdogan continues to insist he will block the admission of Finland and Sweden into NATO. Though concessions might change his mind, there’s no guarantee he’ll back down. Russia’s military gains are incremental, and they will come at a great cost to Russia’s economic future. But for now, momentum is with the Kremlin.
Far right gains ground in Italian elections
Sunday’s local elections in 1,000 Italian cities confirmed the advance of right-wing parties nationwide, especially the Brothers of Italy party. The far-right Brothers strengthened its coalition with the fellow far-right Lega and the center-right Forza Italia parties, taking the lead in the regional capitals of Genoa and Palermo. A few key insights emerge. First, the far-right coalition has carved out a secure space in the Italian political landscape in the run-up to the 2023 national election. Second, the exclusion of Brothers from the government no longer looks sustainable. Third, the local elections suggest that the current Draghi government is operating on a weak foundation. While it’s impossible to predict whether Italy’s next government will overturn recent policies, including the country’s strong anti-Russia stance in the Ukraine war, this election demonstrates that far-right, anti-EU, and anti-immigration sentiments are gaining ground in the third-largest net contributor to the EU’s budget. Further challenges to EU unity lie ahead, the most formidable of which may very well come from Italy as early as next year.
Why did dozens of Iraqi parliamentarians resign?
Iraq’s tumultuous national politics were dealt another blow on Sunday when 73 lawmakers who make up the biggest parliamentary bloc resigned en masse. The bloc’s leader — powerful Shia cleric Muqtada al-Sadr — called on allies to vacate their seats after eight painstaking months of negotiations during which opposition groups refused to back a vote that would appoint the next president, a crucial step needed to tap a new prime minister and Cabinet to steer the country’s legislative agenda. Al-Sadr, an Iraqi nationalist who led his supporters to fight US occupying forces in the early 2000s, said he was throwing in the towel so that the country could move past the period of crippling political deadlock. But some analysts say this move could spark even more instability and protests from disgruntled al-Sadr supporters. Many Iraqis are also concerned that this could pave the way for the more radical Coordination Framework — a coalition led by Iran-backed Shiite parties — to fill the political vacuum. Notably, this bloc, which pulled the levers of power before al-Sadr’s alliance gained the most seats in general elections last fall (though few Iraqis showed up to vote), has long used heavy-handed tactics to quash dissent.
Rep. Joe Kennedy III
Kim Jong Un's olive branch may be nothing more than a smoke screen and a modern-day Kennedy makes his case for why #MAGA is making America small again.