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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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Giorgia Meloni, leader of Italian far-right party Brothers of Italy, gestures during a campaign rally in Turin.
How far to the right is Italy’s soon-to-be prime minister?
Until recently, Giorgia Meloni was on the fringes of Italian politics. Now the leader of the far-right Brothers of Italy Party is likely to become the country’s first female prime minister when Italians head to the polls on Sept. 25.
A self-styled anti-globalist, Meloni has for the most part embraced her far-right reputation within an Italian electorate that relishes anti-establishment candidates. But in an age when the term ‘far-right’ has become a catchall, what does Meloni really stand for and what will her election mean for Italy’s politics and economy?
Mother of the Brothers
Meloni – a former minister for youth in then Prime Minister Silvio Berlusconi’s cabinet – has headed the breakaway nationalist Brothers of Italy Party since 2014. Avowedly anti-immigrant and proud of its nativist bonafides, the party has roots in Italy’s neofascist parties of the 1940s.
Meloni’s party is currently slated to reap 25% of the vote, while her three-party coalition – including Matteo Salvini’s far-right Lega Party and Berlusconi’s Forza Italia – would together secure around 45%. The bloc, expected to win majorities in both legislative chambers, could even win a two-thirds supermajority. Importantly, this would allow it to make constitutional changes without holding a referendum.
Indeed, Meloni’s conservative far-right credentials are well-established. In refusing to join former Prime Minister Mario Draghi’s center-left national unity government last year, she emerged as an attractive candidate for protest voters (Salvini and Berlusconi both supported it). She has called immigration to Italy a form of “ethnic substitution” and has rallied against globalist elites as well as the “LGBT lobby.”
A former journalist and Italy’s youngest-ever cabinet minister, Meloni is not your run-of-the-mill far-right nationalist. Unsurprisingly, she is not a huge fan of the European Union, saying at a recent debate: “If I win, for Europe, the fun is over,” adding that Brussels should leave “the issues closest to the lives of citizens” to member states. What’s more, the Brothers have aligned in the European parliament with Poland’s Law and Justice Party that’s long been on a collision course with the EU.
Still, Meloni’s not a proponent of tear-it-down politics. Unlike her coalition partners, Meloni is firmly pro-NATO and supports Brussels’ ongoing economic sanctions on Russia. But Meloni also says that European solidarity “has limits,” calling out Germany in particular for opposing caps on the price of gas because of contracts with Russian state energy companies.
A tricky balancing act. Meloni appears to have tempered her tough-on-Brussels stance in recent weeks, emphasizing that she’s not keen to pick fights and will prioritize Italy’s economy, burdened by massive debt and an energy crunch.
A savvy politician who joined the political fray as a student, Meloni also knows that solid ties with Brussels are crucial to keeping Italy’s economy afloat. As part of Brussels’ bloc-wide pandemic recovery plan, Rome is slated to get almost 200 billion euros from the EU Commission. Brussels also bailed out Rome in 2012 from a debt crisis, and although Italy’s debt to GDP ratio remains sky-high – more than 150% at the end of 2021, which puts it in the world’s top 10 – it is manageable only because the European Central Bank has bought much of Italy’s debt.
“European debt substitutes Italy's debt,” says Carlo Bastasin, a Europe economic and political expert at the Brookings Institution. Indeed, the ECB bought 250 billion euros worth of Italian debt between March 2020 and December 2021 to stabilize the eurozone.
However, the doling out of post-COVID funds is contingent on Italy enforcing structural economic reforms. The incoming far-right coalition has said the EU provisions should be amended given recent geopolitical developments. But it has also proposed broad tax cuts among other big spending schemes that will certainly make for some frosty conversations in Brussels.
One of the most important factors in determining the stability of the government, Bastasin says, “is how the European Central Bank will manage the required increase in interest rates” to curb inflation. If its intervention is too heavy- handed, he says, it might “corner Italy’s government, making its financial situation unstable and the basis of the government wobbly.”
As Italy prepares to usher in its most Eurosceptic government in years, some analysts have pointed to Hungary’s complex relationship with Brussels as a sign of what’s to come. Under ultra-conservative PM Viktor Orbán, Budapest has refused to comply with EU reforms needed to unlock much-needed cash. But Bastasin says the comparison between the two is flawed: “Hungary has been subsidized by the EU Commission and EU partners forever, while Italy is a net creditor to the Commission. It gives to Brussels more than it receives.”
What’s more, he adds, Italians, for the most part, have a lot of love for the European Union. “In Poland and Hungary they don't have the same affinity for European integration. They never have.”
Meloni is likely to come into office with a solid mandate to govern, but the road ahead will be anything but smooth.
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.
Brothers of Italy leader Giorgia Meloni during a campaign rally in Rieti.
Is she Italy’s next prime minister?
After 17 months of relative stability, Italian politics has again become a roller-coaster ride, and a country that’s had 18 governments in 34 years will soon have another. With the collapse of Mario Draghi’s coalition, a new election will likely take place in September or October.
Who will lead that government? It’s too soon to tell, given the fast-changing nature of Italian politics, but now’s a good time to take another close look at the charismatic Giorgia Meloni, the leader of the most popular party in Italy today.
Four years ago, populist firebrand Matteo Salvini was widely considered Italy's prime minister-in-waiting, until a series of political missteps left him in opposition. Then the arrival of COVID in 2020 devastated Italy and its economy, blunting the force of Salvini’s anti-EU message by leaving the country dependent on outside help.
Draghi, a former European Central Bank president and formidable technocrat, became the man of the hour, and in February 2021 he formed a government of national unity. Faced with the need to work with the EU on financial relief for his country, Draghi extended a hand to both the left and right. The center-left Democratic Party and anti-establishment Five Star party agreed to join his coalition. Crucially, so did Lega, Salvini's party.
That's when Salvini and Lega began to drop in the polls. Some voters who liked his anti-immigrant fist-shaking and attacks on EU leaders decided that Salvini had sold out by joining Draghi's government, which has accepted EU reform demands in exchange for pandemic rescue funds.
In search of a more authentic far-right alternative, many of those voters turned to the Brothers of Italy, the largest party in parliament to remain outside Draghi's coalition.
That party's leader, Giorgia Meloni, began rising in the polls.
Who is she? Just 45, Meloni has more than two decades of experience in bare-knuckled Italian politics. As a teenager, she joined the youth group within Movimento Sociale Italiano (Italian Social Movement), a barely reconstructed fascist party inspired by Benito Mussolini. After moving to the right-wing National Alliance, she became minister of youth in one of the many governments led by former Prime Minister Silvio Berlusconi in 2008. In 2014, she helped found Brothers of Italy.
On immigration, the party has struck an even harder line than Lega has. The Brothers have called for blockades to stop migrants from reaching Italian ports. Meloni wants to boost Italy's birth rate to ease the need for migrant labor. She’s called for the defense of "God, fatherland, and family," an old-school fascist slogan.
Meloni has never favored an Italian exit from the EU, but she has said Italy should "re-discuss" existing EU treaties and the single currency. She has called for amending Italy's constitution to give Italian law priority over European law.
Getting to compromise. If Meloni, or anyone else in her party, becomes prime minister, her attitude toward the EU and its institutions will face intense scrutiny, both within Italy and across Europe. This is still a moment when recovery for Italy’s post-pandemic economy means cooperation with the EU to gain access to COVID relief “disbursement funds.” And that depends on continued reform of Italy’s economic management.
Meloni has taken a strong position in favor of Ukrainian and EU efforts to help that country repel Russia’s invasion. That demonstrates that her political pragmatism will trump nationalism when necessary to boost her party’s credibility as a leader in government.
But she’ll certainly have to prove to skeptics that her traditional Euro-skepticism would prevent Italy from getting the EU help it needs to restore its economy to health. And getting from here to there might prove a punishing process for Italy’s still-fragile economy.
Who's afraid of Giorgia Meloni?
Italy's politics are a rollercoaster ride in the best of times — the country has had 18 governments in the past 32 years — and despite the best efforts of current Prime Minister Mario Draghi to navigate the COVID crisis, Italians may well be in for another sharp turn in coming months.
This time, however, populist firebrand Matteo Salvini may not find himself in the front seat. Meet Giorgia Meloni, Italy's rising populist star.
Italy's state of play. Three years ago, Salvini looked to be Italy's prime minister in waiting. But a series of political missteps, including his push for an ill-conceived early election in 2019, left him in opposition. Salvini remained the country's most popular politician, but in 2020, COVID devastated Italy and its economy, blunting the force of Salvini's anti-immigrant, anti-EU message by leaving the country dependent on outside help.
After the previous government collapsed, Draghi, a former European Central Bank president, was called upon in February 2021 to form a government of national unity. Faced with the pandemic — the coronavirus has killed more people in Italy than in any other EU country — and the need to work with the EU on financial relief for his beleaguered country, Draghi extended a hand to both the left and right. The center-left Democratic Party and anti-establishment Five Star party agreed to join his coalition. Crucially, so did Lega, Salvini's party.
That's when Salvini and his Lega party began to drop in the polls. Some voters who liked his anti-immigrant fist-shaking and his attacks on EU leaders decided that Salvini had sold out by letting Lega join Draghi's government, which has accepted EU reform demands in exchange for rescue funds.
In search of a more authentic far-right alternative, they turned to the Brothers of Italy, the largest party in parliament that refused to join Draghi's unity coalition. Since then, that party's charismatic leader, Giorgia Meloni, has been rising in the polls.
A survey this month from Corriere della Sera, a Milan-based daily newspaper, named Meloni the second most popular politician in Italy after former prime minister Giuseppe Conte. Salvini is now tied for fourth after falling from 39 percent approval one year ago to 30 percent. A range of polls also reveals that Brothers of Italy is now the country's fastest-rising party, and Lega is the fastest falling. Lega's remaining lead in polls of all parties has dwindled to almost nothing.
Meet Meloni. Just 43, Meloni has more than 25 years' experience of bare-knuckled Italian politics. Still a teenager, she joined the youth group within Movimento Sociale Italiano (Italian Social Movement), a barely reconstructed fascist party inspired by Benito Mussolini. After moving to the right-wing Alleanza Nazionale (National Alliance), she became minister of youth in one of the many governments led by former prime minister Silvio Berlusconi in 2008. In 2014, she helped found Brothers of Italy.
The party has struck an even harder line than Lega has. The Brothers want to blockade migrants from reaching Italian ports, boost Italy's birth-rate to ease the need for migrant labor, and defend "God, fatherland and family," an old-school fascist slogan.
Though Meloni doesn't favor an Italian exit from the EU, she wants to "re-discuss" existing EU treaties and the single currency. She also wants to amend Italy's constitution to give Italian law priority over European law. But it's her decision to keep Brothers of Italy out of the current government that underscores her talent as a political strategist.
Meloni's moment? In recent months, COVID has forced Italians to worry less about migrants than about vaccines and economic recovery. That's about to change. The pandemic will ease in coming months, and more boats will head for Italian shores. In fact, more than 13,000 people have already arrived this year, triple the amount over the same period last year. Warmer weather will continue that surge.
Italy will hold elections sometime between early next year and mid-2023, and if Draghi decides he would rather become president than remain prime minister once the pandemic has lifted, the earlier time frame for elections becomes likely. With support from Berlusconi's Forza Italia, Lega and Brothers of Italy might well form the next government.
If so, that might ignite a true battle for the right. Meloni and Salvini both want to be prime minister. Only one can carry the day.
Has Italy's far right really changed its tune?
Italian politician Matteo Salvini has long been one of Italy's most outspoken critics of the EU — just a year ago he called the Union a "den of snakes and jackals." But the plain-spoken firebrand has abruptly changed his tune in recent weeks, joining the national unity government led by Prime Minister Mario Draghi. As far European politicians go, Draghi, a former head of the European Central Bank, is about as pro-EU as you can get. So what might have prompted Salvini's surprising about-face? And what does it mean for the future of far-right populism in the EU's third-largest country?
At a basic level, the chance to have a say in how Italy spends the €209 billion of EU grants and low-interest loans Italy is slated to receive from the EU's coronavirus recovery effort was probably too tempting to pass up. In joining the government, Salvini's Lega party has secured two cabinet portfolios — tourism and economic development — that will play an important role in supporting the recovery.
Yet strategic considerations probably informed the decision too. The coronavirus pandemic has diminished Italians' appetite for the kind of nationalist, anti-establishment rhetoric that has helped to make Lega the country's most popular party. As the health crisis took center-stage, the public has looked instead to predictable, established leadership for reassurance. Perceptions of science and expert opinion have improved.
As a result, joining the national unity government will further the goal of Lega's moderate faction of building a reputation as responsible stakeholders in the eyes of the business community and foreign counterparts. With the erstwhile center-right powerhouse Forza Italia expected to fall apart when 85-year-old party boss Silvio Berlusconi retires from active politics, Lega could be in a position to pick up the pieces by tacking slightly more to the center.
That said, shifts like Lega's are hardly uncommon in Italian politics. In fact, two other major parties have made similar flip-flops of their own: the center-left Democratic Party had vowed never to participate in a government with Lega, and the left-wing populist Five Star had traditionally opposed governments led by technocrats such as Draghi. Now, both are in government again.
In this context, Lega could very well reverse course again if the political winds change direction, as they likely will. If the European debt crisis of the early 2010s is any indication, the political backlash came during the long, grueling process of recovery. Though the EU's decision to ease strict fiscal rules and embrace aggressive stimulus spending have helped soften the blow and might allow for a swifter recovery this time, economic pain is still likely to be intense and long-lasting, creating the conditions for a resurgence of Lega's more openly nationalistic, anti-immigrant rhetoric.
Moreover, the small print of EU's coronavirus recovery funds says that they are conditioned on a series of reforms to Italy's sclerotic economy. Any inkling that these funds, which the public has come to expect, could be delayed or withdrawn for noncompliance would feed a political backlash that Lega will be certain to exploit. And further down the road, the EU's strict debt and deficit rules — a favorite target of Salvini's — will eventually come back into effect in some form, probably with the 2023 budget.
These dynamics will bear close watching in the months ahead, especially given questions about how long this peculiar national unity government will last. New elections must be held by 2023 but could come sooner, for example, if rumors prove correct that Draghi will move to occupy the presidency himself when President Sergio Matarella's term ends in February 2022. Current polling suggests that Lega is well-placed to win the next elections.
If those elections do take place, the EU could soon be facing against an emboldened Lega-led government in Italy. If that happens, would Salvini's party change its stripes again?
Federico Santi is Senior Analyst, Europe at Eurasia Group.
What We're Watching: Thai youth rally against monarchy, Italian local polls
(Some) Thais fed up with royals: In their largest show of force to date, around 18,000 young Thai activists took to the streets of Bangkok on Saturday to rally against the government and demand sweeping changes to the country's powerful monarchy. The protesters installed a gold plaque declaring that Thailand belongs to the Thai people, not the king — a brazen act of defiance in a country where many view the sovereign as a god and offenses against the royal family are punishable by up to 15 years in prison. Activists also got the royal guards to accept a letter addressed to King Vajiralongkorn with their proposed reforms. We're watching to see if the Thai government — made up mostly of the same generals who took over in a 2014 coup and then stage-managed last year's election to stay in power — continues to exercise restraint against the activists. So far, some protest leaders have been detained but they are growing bolder in their defiance of the military and the royal family, the two institutions that have dominated Thai politics for decades. Prime Minister and former army chief Prayuth Chan-ocha is in a tough spot: many young and liberal Thais will hate him if he cracks down hard on the peaceful protesters, but not doing so would make him look weak in the eyes of his power base of older, more conservative Thais who still venerate the monarchy and are fine with the military calling the shots in politics.
A Tuscan takeover? Italians are currently voting in a series of regional elections seen as the first major electoral test since the pandemic hit. Voters have generally supported Prime Minister Giuseppe Conte's handling of the crisis, but the center-left coalition he leads — the Democratic Party coupled with the anti-establishment Five Star Movement — has had trouble uniting behind candidates at the local level. The results will come later today, and we are watching mainly to see how far-right former Interior Minister Matteo Salvini's Lega party does. Salvini has been out of the government since botching a bid to force fresh elections almost a year ago, but he has used the pandemic to amplify his anti-immigrant message and criticize the government's handling of the crisis. Although the party has lost some popularity at the national level, the Lega and its allies are already expected to win at least three of the seven regional leaderships up for a vote. And it has already won 8 out of 9 regional elections held since 2018. Keep a close eye in particular on Tuscany, where Salvini's party has already made strong local inroads in a region that has been run by the left for half a century.