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News Analysis: Political negotiations over, hard work starting for Italian leaders

Source: Xinhua    2018-06-02 01:12:56

by Eric J. Lyman

ROME, June 1 (Xinhua) -- After 88 days of stop-and-start negotiations, Italy installed its first-ever populist government on Friday. That is when the hard part begins.

Trading had closed on financial markets late Thursday, when Italian President Sergio Mattarella formally gave law professor Giuseppe Conte a mandate to become prime minister. Italian stocks and bonds performed poorly in anticipation of a populist government led by the anti-establishment Five-Star Movement and the nationalist League parties, but prices rebounded Friday just ahead of the swearing in ceremony.

Analysts warned not to assume investors were reassured by a populist government taking power.

"I think we are seeing relief that almost 13 weeks of negotiations are over and not any kind of show of confidence for the new government," Javier Noriega, an economist with Hildebrandt and Ferrar, told Xinhua.

Conte lacks political experience and a support base in parliament, a fact that makes his cabinet even more important.

The new government's ministers include Five-Star Movement head Luigi Di Maio as minister of labor and Matteo Salvini (League) as interior minister. Di Maio and Salvini, both vocal critics of the European Union (EU), will also share the role of deputy prime minister.

Also of concern for pro-European observers is the presence of 81-year-old Paolo Savona, a fiercely euro-skeptic economist.

Di Maio and Salvini originally wanted to make Savona finance minister. Mattarella blocked that, but in the end he allowed the man who called the euro currency a "German cage" and said Italy should prepare to leave the 19-nation currency zone, to join the cabinet as minister of European affairs.

The new coalition government earned a ringing endorsement from Europe's prominent anti-EU voice, France's Marine Le Pen called the new government a "victory of democracy over European Union threats and intimidation."

Italian relations with the European Union got off to an inauspicious start when European Commission President Jean-Claude Juncker said Thursday that Italy should "stop blaming" the EU for the country's woes.

"Italians have to take care of the poor regions of Italy," Juncker said. "That means more work, less corruption, more seriousness."

Salvini was furious, calling the remarks "shameful and racist," and on Friday Juncker apologized.

"Italy and the European Union will have to learn how to co-exist," Noriega said. "One will not work without the other."

Lorenzo Codogno, a former director-general of the Italian Treasury and now a visiting professor at the London School of Economics, predicted that what he called the "patchwork" coalition may work for a while but could eventually have problems.

"I believe the many contradictions of this patchwork will emerge over time, but possibly not immediately," Codogno said. "Populists must be tested in government for voters to change their mind, but this inevitably entails risks for the country."

Luca Verzichelli, a political scientist with the University of Siena, told Xinhua he would not be surprised to see Conte depart soon for Brussels or perhaps Paris or Berlin in an effort to assuage European fears so the government can start working.

"The new government will have to start governing as soon as possible," Verzichelli said.

Editor: Chengcheng
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Xinhuanet

News Analysis: Political negotiations over, hard work starting for Italian leaders

Source: Xinhua 2018-06-02 01:12:56

by Eric J. Lyman

ROME, June 1 (Xinhua) -- After 88 days of stop-and-start negotiations, Italy installed its first-ever populist government on Friday. That is when the hard part begins.

Trading had closed on financial markets late Thursday, when Italian President Sergio Mattarella formally gave law professor Giuseppe Conte a mandate to become prime minister. Italian stocks and bonds performed poorly in anticipation of a populist government led by the anti-establishment Five-Star Movement and the nationalist League parties, but prices rebounded Friday just ahead of the swearing in ceremony.

Analysts warned not to assume investors were reassured by a populist government taking power.

"I think we are seeing relief that almost 13 weeks of negotiations are over and not any kind of show of confidence for the new government," Javier Noriega, an economist with Hildebrandt and Ferrar, told Xinhua.

Conte lacks political experience and a support base in parliament, a fact that makes his cabinet even more important.

The new government's ministers include Five-Star Movement head Luigi Di Maio as minister of labor and Matteo Salvini (League) as interior minister. Di Maio and Salvini, both vocal critics of the European Union (EU), will also share the role of deputy prime minister.

Also of concern for pro-European observers is the presence of 81-year-old Paolo Savona, a fiercely euro-skeptic economist.

Di Maio and Salvini originally wanted to make Savona finance minister. Mattarella blocked that, but in the end he allowed the man who called the euro currency a "German cage" and said Italy should prepare to leave the 19-nation currency zone, to join the cabinet as minister of European affairs.

The new coalition government earned a ringing endorsement from Europe's prominent anti-EU voice, France's Marine Le Pen called the new government a "victory of democracy over European Union threats and intimidation."

Italian relations with the European Union got off to an inauspicious start when European Commission President Jean-Claude Juncker said Thursday that Italy should "stop blaming" the EU for the country's woes.

"Italians have to take care of the poor regions of Italy," Juncker said. "That means more work, less corruption, more seriousness."

Salvini was furious, calling the remarks "shameful and racist," and on Friday Juncker apologized.

"Italy and the European Union will have to learn how to co-exist," Noriega said. "One will not work without the other."

Lorenzo Codogno, a former director-general of the Italian Treasury and now a visiting professor at the London School of Economics, predicted that what he called the "patchwork" coalition may work for a while but could eventually have problems.

"I believe the many contradictions of this patchwork will emerge over time, but possibly not immediately," Codogno said. "Populists must be tested in government for voters to change their mind, but this inevitably entails risks for the country."

Luca Verzichelli, a political scientist with the University of Siena, told Xinhua he would not be surprised to see Conte depart soon for Brussels or perhaps Paris or Berlin in an effort to assuage European fears so the government can start working.

"The new government will have to start governing as soon as possible," Verzichelli said.

[Editor: huaxia]
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