From left to right: Luigi Di Maio, Giuseppe Conte, Matteo Salvini (Source: https://www.tpi.it/2019/01/18/governo-decreto-quota-100-reddito-di-cittadinanza/)
In early June 2018 Italy found itself with a new government comprising the catch-all populist Five Star Movement and the far-right League (formerly known as the Northern League). Both these parties made significant gains in the general election held in March and had enough seats in the Italian parliament to form a majority. This administration is headed by the Law professor Giuseppe Conte who acts as prime minister, while the Five Star Movement leader Luigi Di Maio and the League’s secretary Matteo Salvini work as deputy prime ministers and as Labour and Interior ministers respectively. Their cabinet has been labelled the ‘government of change’ as it intends to implement policies that are supposed to improve the living standards of ordinary Italians. For instance Salvini promised a huge crackdown on undocumented migrants and Di Maio vowed to introduce a form of basic income for poor families and job seekers. Sometimes this executive has been referred to as the yellow-green government because of the colours of the Five Star Movement and the League.  A poll conducted shortly after the formation of this administration revealed that 69 percent of respondents viewed the birth of the Conte cabinet positively and that 58 percent said that they had faith in it.
The new premier has exposed his populist credentials by describing himself as the ‘the people’s lawyer’. He even defended his leadership from accusations of populism and sovranismo (the Italian word for souverainism/sovereigntism) during a speech at the United Nations General Assembly in September 2018 by declaring that sovereignty and the people are enshrined in the first article of the Italian constitution , which clearly states: “Italy is a democratic Republic founded on labour. Sovereignty belongs to the people and is exercised by the people in the forms and within the limits of the Constitution”.  Ever since then Italy has indeed seen some changes, especially when it comes to domestic and foreign policy. The question we should ask ourselves though is: to what extent is this national populist government different from its predecessors and has it delivered on its promises to solve Italy’s long-standing social and economic problems so far?
The immigration debacle
As mentioned in the introduction, Italy’s yellow-green coalition government has pledged to adopt a tougher stance on immigration. In its joint plan it demanded more EU help for Italy, insisted on deporting an estimated 500 000 undocumented migrants and called for the relocation of asylum-seekers across the EU, an idea that had already rejected by some member states.
Immigration has been a dominant issue in Italy for many years. The Northern League was one of the first Italian parties to galvanise its support around this controversial topic. By 1991 it favoured immigration controls and harsh penalties for illegal immigrants and crimes committed by foreigners even though in those days foreign-born residents made up only 1 percent of the Italian population. In 2010 that figure went up to 7 percent, the majority of which lived in the northern regions. This explains why immigration occupied a prominent place in the Northern League manifestos, “with distinct flavours, in some regions, of outright xenophobia”. It is important to note that countries like the UK or France have become accustomed to immigration over a long period of time, but the same cannot be said for Italy.
At the moment there are 5 million foreign nationals residing in the country, i.e. 8.3 percent of the total population of 60.5 million. When it comes to illegal migrants a study found that there are 500,000 of them including failed asylum seekers and people who have outstayed their visas. As Libya fell into chaos after the death of Muammar Gaddafi, the number of refugees, migrants and asylum seekers arriving in Italy from north Africa has augmented from 42 000 in 2013 to a peak of 181 000 in 2016. The figures were already diminishing the following year (120 000) and they were reduced even further after the Italian government signed a controversial deal with the Libyan authorities and militias in the summer of 2017. As a matter of fact in early 2018 only 13 808 migrants reached Italy, an 84 percent decline from the previous year. In 2017 there was also a 12 percent rise in the number of people being expelled from the country. When Salvini became deputy prime minister and Interior minister he vowed to halt the influx of arrivals and to deport hundreds of thousands of illegal immigrants. On the same note, Conte pledged to overhaul the Dublin treaty, under which would-be asylum seekers should submit applications in the first state they arrive in. These EU regulations placed a huge burden on Italy, Greece and Spain who had to accept a vast number of refugees while contending with major economic difficulties. Hence as Pier Giorgio Ardeni, Director of the Cattaneo Institute (a social science think tank) said: “the European Union made a huge mistake in selfishly leaving Italy alone to contend with the refugee crisis”. Ironically, the Dublin treaty was ratified by Italy in 2003 when the Northern League was part of a ruling centre-right coalition led by the former prime minister Silvio Berlusconi. In 2002 the far-right party had helped to draft and implement a law that gave residence permits to foreigners only if they had a job lined up for them in the country. This did not exclude those who sought political asylum and so the number of asylum seekers skyrocketed over the years , a phenomenon coupled with a rising immigrant population. The League maintained its xenophobic stance after returning to the opposition as many Italians felt threatened by the swathes of refugees and migrants landing on their shores.
The first test for the yellow-green government’s hardline immigration policy was the Aquarius case that arose in June 2018 when Salvini threatened to close all Italian ports if Malta did not provide assistance to an NGO ship (named Aquarius) carrying 600 migrants from north Africa. He also accused the Maltese executive of not aiding Italy with the migration flows, an insinuation La Valletta always rejected. This event led to the Conte administration’s first diplomatic spat with France as French President Emmanuel Macron blasted Italy as “cynical and irresponsible” for refusing to give the migrants on board the Aquarius a safe harbour. He was soon proven to be hypocritical because he also barred the ship from docking in France. In fact Macron has worked hard to close down migration routes from Africa into Europe amid strong anti-immigrant sentiment in his country. Salvini responded by demanding an apology from the French executive. In a speech to the Italian senate the League secretary explained that France had accepted only 640 of the more than 9,000 people it had promised to take from Italy and that in the first five months of 2018 the French had sent back to Italy 10,249 migrants who had crossed their common frontier. In the end, the Aquarius ship sailed to Spain where the migrants were welcomed.
A summit was later held on 28-29th June in Brussels to address the tensions between EU member states on the issue of mass immigration. Conte was one of the attendees and he threatened to block any decisions made during the meeting if fellow European leaders did not do more to help Italy. He demanded that current rules requiring asylum seekers to file their application in the first EU country in which they arrive be substituted with a strategy of redistributing migrants across the entire bloc, although such ideas are strongly opposed by Eastern European states, especially Hungary and Poland. After a full night of negotiations, Conte scored an astounding victory for his migration policy when he secured a deal that envisaged several changes to the previous EU rules on migration. One key concession given to the Italian government was that from now on all ships crossing the Mediterranean sea (including NGO vessels) must respect laws and not interfere with the operations of the Libyan coast guard. The new protocol also saw EU-wide agreement on more structural funds for the establishment of registration centres in the countries of departure in northern and western Africa. Conte told reporters that “Italy is no longer alone”. Salvini proceeded immediately to close the Italians ports to all NGO ships which rescue migrants for the rest of the summer. Regardless of anyone’s views on the yellow-green executive, the deal agreed in Brussels marked a turning point in EU policy towards migration and it turned Italy into a key role player in the European decision-making process, meaning that its national interests would no longer be secondary to those of the EU.
The Five Star Movement-League coalition displayed its harsh stance on immigration yet again when the Security decree was approved in late 2018. This edict contains a series of measures drafted by Salvini himself that would essentially: abolish humanitarian protection for those not eligible for refugee status and replace it with a special permits system that will restrict eligibility to people such as victims of natural disasters; suspend the refugee application process for those considered to be “socially dangerous” or convicted of a crime. These proposals were accepted by Conte’s cabinet in September 2018. It was quickly given the go-ahead by the Senate before being ratified by the Chamber of Deputies with 396 votes in favour to 99 against two months afterwards. What should be noted is that this bill affects legal immigrants, particularly those applying for Italian citizenship since the decree means that all applications via naturalisation or marriage will now take four years, instead of the previous two, to be processed by the Italian government.
These new regulations have already been criticised for their evident shortcomings. Christopher Hein, a professor of law and immigration policies at Luiss university in Rome, said that the decree could have a significant impact on the lives of tens of thousands of migrants in Italy. Most of the ones who have arrived in recent times have gained humanitarian protection status, which is valid for two years and entitles them to a residency permit and allows them to work. Hein remarked that “far more people are on this permit than the number of recognised refugees – last year it was around 25% of all asylum seekers”. He added that “if people do not have a chance to obtain this kind of protection, or they no longer make an attempt, or they get rejected, it does not mean that the next day they simply go home”, meaning that Salvini’s policies could increase the number of irregular migrants. The professor affirmed that the yellow-green executive’s ultimate goal “is to have no refugees at all in Italy through a combination of efforts: closure of seaports, criminalising migrant rescue NGOs, enhancing collaboration with the coastguard and now, with this decree, they target those who are already here, or who may come in future and not get any kind of protection – it is a deterrent measure”. Moreover, the plan to suspend the asylum requests of those regarded as “socially dangerous” could result in the expulsion of people based on accusations of deviance rather than convictions. Mario Morcone, director of the Italian Refugee Council, also lambasted the legislation because in his view it would not make the country safer. He asserted that “the abolition of humanitarian protection will create thousands of irregular migrants who cannot be repatriated” and that the dismantlement of asylum-seeker reception centres “will inevitably make the people who arrive in Italy more fragile, increasing the risk of conflict and making them permeable to paths of radicalisation”.
It has been argued that the Security decree will lead to a reduction of rights for vulnerable people. The increasing impossibility to get a regular job will boost illegal work, meaning less taxation and fewer state revenues. Furthermore, if legal migrants cannot obtain residence permits they will have to live on the streets, accelerating the much feared urban decay. Consequently, the League and other right-wing parties will have good reasons to blame immigrants for social degradation and chaos. The effects of the new legislation have already been seen. In early December 2018 a large number of migrants were removed from reception centres across Italy and the number is likely to rise. Italy’s national statistics office estimated that the bill will make 130 000 migrants illegal by 2020 as a result of the loss of humanitarian protection. Some cities, including Turin and Rome (both run by Five Star Movement mayors) have refused to implement the measures for fears that they would increase homelessness and foment social unrest.
Another outcome of Salvini’s policies was that by February 2019 Italy had rejected a record 24 800 asylum applications within the previous four months. More than 700 individuals have had their humanitarian protection status declined since October 2018. There were only 150 approvals in January, down from 2091 at the same time last year, leading to an increase in the number of migrants with no legal status. Many of the people that have been expelled from the reception centres are likely to become homeless. A poignant example of how these people have been affected was the death of a Nigerian chemistry graduate, Prince Jerry, who had been refused his residence permit. This made him fall into a deep depression before committing suicide.
Fortunately for Conte’s administration the arrivals in Italy have dropped by more than 80 percent since their peak. According to the figures from the International Organization for Migration (IOM) 23,126 people reached the country in 2018 compared with 118 914 in 2017. Data from the United Nations showed that 2458 migrants arrived in Italy between October 2018 and January 2019. Nonetheless the ‘government of change’ is still far from achieving its objective of repatriating 500 000 undocumented migrants. To date it has expelled about 500 people per month which is lower than the average of the previous Italian executive. Matteo Villa, a research fellow at the Institute for International Political Studies said that according to their calculations “it would take almost a century to repatriate all the migrants denied asylum” and that “there could be more than 670,000 asylum seekers who will find themselves living irregularly in Italy, partly because the government does not have the capacity to deport them”. Such evidence proves that, for the moment, the yellow-green coalition has put into practice laws that will not solve the problems related to migration but would further exacerbate them unless a different direction is taken.
The contentious issue of migration has tied the Five Star Movement closely to the League, as the latter is leading in the polls. Salvini’s party is widely expected to win the forthcoming European Parliament elections and therefore his coalition partners have kowtowed to him as they fear significant losses in such contest. They also know that if a snap general election was held they would experience a massive setback and so they had to compromise some policies in order to maintain a good relationship with the League. The balance of power within the Italian government was put to the test in late January 2019 when Salvini risked being put on trial for refusing to allow an Italian coast guard vessel-the Diciotti-that was carrying more than 150 people (including children) to dock in Sicily for ten days in August 2018. The ship was eventually permitted to disembark after the Roman Catholic Church brokered a deal with Ireland and Albania to take the migrants in. Sicilian prosecutors started an investigation into Salvini for suspected "illegal confinement, illegal arrest and abuse of power", but in November the case was dropped. Yet, a special tribunal overturned this decision, ruling that the Interior minister could start trial. After initially daring the courts to bring it on, the Interior minister asked his Five Star Movement colleagues to block the trial and not revoke his parliamentary immunity. A month later, the Italian Senate’s immunity panel voted to reject the request to try Salvini. Local media reported that the Five Star Movement senators were split on the matter, but most of them voted to protect their coalition ally after a poll on the Movement’s website found 59 percent of members subscribed to Di Maio’s belief that the trial should not take place.
At the present moment the Chamber of Deputies still needs to give their final say on whether Salvini should face justice or not, but it seems likely that he will be spared again. Anyhow, the Diciotti dilemma has left a stain on the Five Star Movement, which has long campaigned for Italian politicians to be held legally accountable and held that ministers should resign if convicted or accused of any crime. The party’s leaders claimed that this particular case was different by affirming that Salvini’s actions were in line with government policy. However some Movement members were outraged about the leadership backing of the Interior minister. Di Maio’s Facebook page was soon filled with angry comments by individuals who said that they had voted for the populist party and felt betrayed. The vetoing of the trial has indeed exposed some deep hypocrisy within the Five Star Movement, a supposedly anti-establishment group that until 2017 had a statute saying that if any member working as a public official was under investigation then he/she should resign. This position was abandoned when the Five Star Movement mayor of Rome Virginia Raggi was embroiled in a scandal over subcontracting. Such behaviour shows the extent to which the Movement is willing to defend its partners in order to keep their fragile hold on power. As Fabio Salamida commented once: Salvini is now the new leader of the Movement. The vote in favour of blocking the trial should not come as a surprise because, as mentioned above, the Five Star leadership did not want it to happen and because there is a massive migration of Movement supporters towards Italy’s new strongman.
The domestic economic front
When the yellow-green coalition came to power they set out to implement substantial economic reforms to improve Italy’s dire financial situation. The country was ravaged by the 2008 crisis which left the economy around six percent smaller than it was before as well as three million more people in poverty. Italy also has the second highest public debt in the EU after Greece which stands at 132 percent of national output. In order to deal with these issues the ‘government of change’ promised to introduce a basic monthly citizen’s income (known in Italian as the reddito di cittadinanza) of 780 euros a month for poor families, provided that the recipients actively seek work. This proved to be a popular idea, especially with the Five Star Movement electorate, but according to some experts it would cost an estimated 17 billion euros to put into practice. The Conte administration also promised to enact two flat tax rates at 15 and 20 percent so that families would receive a 3000 euro annual tax reduction based on household income. One flaw to this idea is that the government contract does not explain how all the extra spending will be financed but economists estimate it could cost some 50 billion euro in lost revenue. Another proposed economic policy is to replace the current pension law that raises the retirement age in phases with a points system that would combine a citizen’s total years of social security contributions with their age. This total needs to be at least 100, meaning that someone who has paid into the system for 37 years could retire at 63, for example. Lastly, the populist executive intends to revise the EU’s Stability and Growth Pact (which sets a budget deficit limit of 3 percent of GDP) because they want to reduce Italy’s debt through "the revival of internal demand" and not by continuing with the austerity measures pursued by the previous Italian governments.
These proposals were agreed by the ruling coalition in late September 2018 along with a budget deficit target at 2.4 percent of GDP for the following year. Italy’s economy minister Giovanni Tria (an academic who is not affiliated to the Five Star Movement or the League) succumbed to pressure from Di Maio and Salvini to put up the target figure in order to pay for their respective electoral campaign pledges such as the pension reforms and the flat tax. This soon resulted in a clash between the Italian executive and the European Commission, since the latter has an extremely conservative approach to member states running budget deficits and has mandated that these should not go above 3 percent of GDP. Although the proposed Italian budget was going to be lower than that figure, Brussels was not happy with what it regarded as fiscal laxity. The financial markets also reacted badly to the Conte administration’s economic plans, thus making it more expensive for Rome to service a national debt. Why does this matter? Because Italian banks have been big buyers of government-sold bonds and their financial situation becomes fragile if those bonds go down in value. The markets were worried about a “doom loop” of weak growth, a rising deficit, losses on bonds and failing banks. They also feared that Italy’s economic problems would spread to the rest of the eurozone since many foreign banks are big holders of Italian debt. All these factors set the scene for a confrontation between Italy’s populist rulers and the EU at a time when the eurozone economy is declining and the financial markets are uneasy.
The dispute with Brussels was certainly not eased by Salvini’s comment that jobs and pensions mattered to him more than the views of EU bureaucrats. This, however, reflected the critical attitude that many Italians have developed towards the European Union over the past few years. When the economic crisis hit the country in September 2008, it was governed by a centre-right coalition led by Silvio Berlusconi which included the Northern League. The only financial downturns that were experienced at that point were a decreasing GDP and a rise in public debt. A second wave of the crash swept Italy in the summer of 2011 when the markets started to lose faith in Berlusconi's ability to pass adequate reforms. Under pressure from Brussels and other European executives, he resigned and was substituted by an unelected “government of experts”, headed by the former European commissioner Mario Monti, which raised taxes and slashed public spending as a way of reassuring the markets. It inevitably led to a recession and growing youth unemployment. This move had far-reaching consequences. These “experts” were allowed to govern because the main centre-right and centre-left parties (Berlusconi’s Forza Italia and the Democratic Party) willingly stepped aside, meaning that the Northern League and the Five Star Movement were the only real opposition parties. The unpopular Monti lost the 2013 elections and in the following year the Democratic Party leader Matteo Renzi took charge. He promised to end austerity, but did not, and failed to persuade the rest of Europe to properly share the burden of the migration crisis. Both the Five Star Movement and the League have criticised the EU and the single currency  and as a result “a large majority of Italians” backed the yellow-green coalition in its dispute with Brussels over a budget that, if implemented, would have breached the EU’s fiscal rules.
In the end Italy managed to avoid receiving sanctions from the EU by agreeing to decrease the deficit target from 2.4 percent of GDP to 2.04 percent, without having to make drastic changes to key economic proposals like the citizen’s income. Nevertheless, Valdis Dombrovskis, a European commission vice-president, labelled the agreement with Italy a “borderline compromise” that does not provide long-term solutions to the country’s financial problems. At the same time he noted that “it enables us [the European commission], for now, to avoid opening a debt procedure, as long as the negotiated measures are fully applied”. It was soon discovered in January 2019 that the Italian economy was falling into recession for the third time in a decade because the GDP had declined during the antecedent three months. Even though the country’s finances have been shrinking ever since the populist coalition took office, analysts have blamed much of the recent slump on the friction between Rome and Brussels which hurt economic confidence and increased Italy’s borrowing costs. Conte attributed the cause of the recession to the trade war between China and the US, while Di Maio blamed the previous centre-left Italian government’s financial policies. He added that the recession was proof that the EU’s budget regulations should be relaxed to allow Italy’s economy to grow and that the forthcoming European Parliament election in May 2019 would be a referendum on eurozone fiscal policy. This is reminiscent of a previous Five Star Movement pledge to hold a public vote on Italy’s membership of the single currency, which was eventually dropped. These facts demonstrate how much the Conte administration is willing to negotiate its proposed legislation with the EU, without having to seem uncritical of the supranational bloc. It is important to highlight though that other Italian prime ministers like Berlusconi and Renzi have also had disagreements with Brussels and they all had “a similar tedious sequence of bombast, submission, and proud claims of having put up the good fight”.
Eventually the pension reform (known as the Quota 100) and the citizens’ income were approved by the ruling cabinet in late January 2019. Private employees will be the first to obtain these new pension allowances from April onwards. The latter measure was supposed to be financed with 9 billion euros, but after discussions with the EU only 7 billion will be reserved to implement this bill of which one billion will be used to strengthen the role of job centres. The citizen’s income is a flagship policy of the Five Star Movement with which they intend to liberate ordinary Italians from joblessness by providing them with a safety net. In practice it is not a universal basic income, but a “workfare” programme, conditional on recipients either seeking employment or performing unpaid jobs in exchange for a 780 euro monthly allowance that is not far short of the low wages young Italians have come to expect. Presently, the average salary for thirty-year olds is just 50 euros higher than this figure. So far the Quota 100 and the citizens’ income have been accepted by the Italian Senate, meaning that it now requires the final approval of the Chamber of Deputies before becoming law.
It is still too early to talk about the effects of these economic policies before they are implemented, but it cannot be denied that the project of economic expansion envisaged by the yellow-green executive contains some contradictory elements. Increased public spending on legislature that is supposed to tackle poverty, like the citizen’s income, would require a rise in taxes to get the accounts back on track. However, this is extremely improbable since the flat tax and other fiscal policies are the antithesis of the above-mentioned reforms. Moreover, the strong dependence on international markets would make such a far-ranging project impossible to execute. Italy certainly needs new welfare policies and it is also fair to say that before a period of economic expansion, state coffers can go into a recession in order to promote investment in public works. The problem is that currently the financial recovery still seems far away, mainly because the Italian government’s economic plans are trying to make everybody happy, yet not actually satisfying anyone. Furthermore, research has shown that a flat tax, which is the League’s flagship policy, will benefit mainly those who have the highest earnings. The rich in Italy already pay less taxes than the rest of the population , so this economic proposal will most probably widen the gap between the wealthiest and the poorest elements in Italian society and therefore existing social problems will be exacerbated.
Foreign policy changes
When the ‘government of change’ took over it was crystal clear that there would be changes in foreign policy as well. Italy’s populist leaders disagree with the sanctions placed by the EU on Russia at the onset of the Ukrainian crisis. They do not consider the Russian Federation to be a threat, but "a potential partner for the EU and NATO" and want to work with the Russians to stop the smuggling of migrants across the Mediterranean sea and the continuing influence of violent Islamic extremists. They also view Russia as a major player in ending the wars in the Middle East.
Opposing anti-Russian embargos is anything but new for Italian foreign policy. The country’s former prime minister Matteo Renzi blocked an extension of EU economic sanctions in 2015  and resisted a push for such measures again the following year. One understandable reason for Italy refusing to implement penalties on the Russian Federation is that the EU sanctions have hurt the Italian economy. The Mediterranean country is Russia’s sixth largest commercial partner when it comes to both exports and imports. Trade between Italy and the Russian Federation went from 26 billion euros in 2014 to 17.4 in 2016, before experiencing a slight increase in 2017. An in-depth analysis has demonstrated that the embargo has directly damaged some sectors, mainly the Italian agroindustrial sector (which lost 50 percent of its exports in four years) and some mechanical instruments industries. Moreover, the recession in Russia and the weakening of the ruble contributed extensively to a standstill in the sale of Italian goods. However, in early 2018 Italian exports witnessed an increase of 6.6 percent.