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The EU’s plan to defeat Euroscepticism Salvini needs the support of Brussels if he wants to be Prime Minister

Salvini, the convert. (Photo by KENZO TRIBOUILLARD/AFP via Getty Images)

Salvini, the convert. (Photo by KENZO TRIBOUILLARD/AFP via Getty Images)


July 7, 2021   4 mins

Matteo Salvini — the enfant prodige of Italian politics who in half a decade transformed a marginal right-wing regionalist party, the Northern League, into the country’s number one party — largely built his political fortune upon campaigning against illegal immigration and the EU. For several years, he even sported a T-shirt with the slogan “no more euro”.

On the issue of Brussels, however, Salvini appears to have undergone a conversion. On several occasions over the past year, Salvini has stated that he no longer believes Italy should leave the euro. Indeed, the formerly “anti-European” League now wholeheartedly backs the ultra-Europeanist Italian government led by former president of the European Central Bank (ECB), Mario Draghi — the very embodiment of the European currency that Salvini once railed against.

Why the change of heart? In a recent interview with the Financial Times, Salvini claimed that his conversion is a natural reflection of the “changes” that have occurred over the past year and a half as a result of the pandemic. “It is clear that Europe is changing for the better by equipping itself with new tools and new rules, and we must accompany it”, he says. “Covid has forced European institutions to listen to us. We hope that Covid has taught everyone that austerity doesn’t work”.

But what “new tools and new rules” is Salvini is referring to exactly? The much-vaunted Europe-wide “recovery fund” known as Next Generation EU (NGEU), I presume. Yet despite all the fanfare, the fund amounts to barely 5% of the EU’s GDP. What’s more, the funds will be disbursed (largely in the form of loans) over the course of six years, at best resulting in a fiscal expansion of around 1% of GDP on average between 2021 and 2024, according to the ECB’s own estimates. And that’s compared to a GDP loss for the EU as a whole of around 15% just last year.Furthermore, in exchange for this pittance, member states will be subject to very strict troika-light conditions.

The notion that “Covid has taught [Europe] that austerity doesn’t work” is also highly questionable. Yes, since the pandemic started, the EU suspended the Stability and Growth Pact’s (SPG) notoriously tight fiscal rules. Despite this, however, the euro area’s discretionary fiscal stimulus in 2020 was a paltry 4% of GDP — half the United States’ discretionary fiscal stimulus over the same period.

Moreover, the suspension of the SPG was always intended to be temporary. Indeed, the European Commission has recently stated that the “general escape clause” — which, in effect, suspended the SPG, giving governments space to spend – will no longer apply in 2023. From then, governments will have to start tightening their belts once again, in a repeat of the disastrous approach following in the aftermath of the 2008 financial crisis.

If anything, the real question is by how much? Judging from the actions of the Draghi government, a lot. Not only does the Government’s fiscal policy remain “very restrictive”, as the economist Gustavo Piga recently noted, but the latest budget report “sets out for the next three years a path of massive deficit reduction, unlike anything ever seen before in the country’s history”. So much for lessons learned.

All things considered, there appears to be very little in the way of positive changes within the EU to justify Salvini’s conversion. Indeed, I would argue that the very opposite is true: Salvini’s switch to Team EU is not a reflection of the bloc’s improvement, but rather of its inability to reform.

Salvini, like most of his Right-wing and formally “Eurosceptic” bedfellows, knows all too well that any attempt to challenge the EU’s economic governance will result in swift and merciless retaliation by the European authorities. Indeed, he experienced it first-hand, when the Conte I government (2018-2019) — supported by the League and the Five Star Movement — found itself on a collision course with Brussels over a minuscule budget deficit increase, required to finance the Government’s two flagship proposals: a citizen’s income and a reform lowering the pension age.

So Salvini, who has a good chance of becoming the country’s next prime minister, knows that he needs to get in Brussels’s good graces if he wants to have a chance at government. Of course, he is aided in this by the fact that his Euroscepticism was arguably always more show than reality, and that his neoliberal economic outlook, just like that of his ally Giorgia Meloni, isn’t that different from that of the EU itself  — in his interview with the FT, Salvini boasted that “on the economic front we are absolutely liberal”, as testified by his fondness for quoting Friedrich Hayek, largely recognised as an intellectual forefather of the euro.

But that’s not the point; the point is the way in which the EU’s economic pensée unique, by ruling out all alternatives to managing society and the economy other than the neoliberal rulebook, inevitably ends up pushing political challenges to the status quo, and to the EU itself, onto a strictly cultural and identitarian terrain.

Hence Salvini’s reframing of his critique of the EU, no longer couched in terms of the bloc’s economic policies but of its encroachment upon the “diversity” of the European peoples. The same goes for other European Right-wing parties, as testified by the recent declaration undersigned by sixteen of them, including Hungarian prime minister Viktor Orbán’s Fidesz, Poland’s governing Law and Justice, France’s National Rally, led by Marine Le Pen, Austria’s Freedom Party, Spain’s Vox and, of course, Italy’s League and Brothers of Italy, Giorgia Meloni’s party. The document says nothing about the EU’s economic policies, but revolves entirely around its criticism of Brussels’s intention to “transform basic social institutions and moral principles”, and calls for the need for European nations to “be based on tradition, respect for the culture and history of European states, respect for Europe’s Judeo-Christian heritage and the common values that unite our nations”.

The question is not whether one considers these claims to be sensible, outrageous or anything in between. The point is the way in which the EU has succeeded in shifting any opposition to itself from the socioeconomic terrain to the identitarian terrain, thus fuelling the very culture wars that are tearing our societies apart. Indeed, the Left’s embrace of wokism is part of this same process. This is the terrifying new world the EU’s economic superstructure has in store for us: one where our “democratic” choice will be limited to choosing whether we want to want to live in relatively conservative or liberal societies, but where no one will dare to challenge the EU’s overarching socioeconomic regime.


Thomas Fazi is an UnHerd columnist and translator. His latest book is The Covid Consensus, co-authored with Toby Green.

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Simon Denis
SD
Simon Denis
2 years ago

The culture war is upon us, so whatever the EU does is secondary. That’s for starters. The left opened up the battle, using so-called “supremacy” as a spurious excuse to attack European identity itself. Thanks to its capture of government, media, entertainment and academe, (and, as Joel Kotkin among others points out, the corporations), it has made great headway in the last few years. Incremental advance has turned into blitzkrieg. The EU itself is under the thumb of the Left thanks to the reddening of the west’s education systems, such that its personnel will be imbued with the “correct” attitudes. Again, it’s a matter of incremental change, at first. No, this is not conspiracy, it’s the tide of fashion modified by a new, proselytising religion. The way in which protestants infiltrated and took over the city states of northern Europe is perhaps the closest model. Others would instance the takeover of Rome by Christianity. And in effect “Woke”, “left modernism” etc are falling into the church shaped hole left by European Christianity in its decline. So to say that the manoeuvrings of the EU are pushing these developments is, in my view, inaccurate. They result from larger forces operating from deeper premises.

Paddy Taylor
Paddy Taylor
2 years ago

“The EU’s plan to defeat Euroscepticism”
Until morale improves, the beatings will continue.

Last edited 2 years ago by Paddy Taylor
Peter LR
PL
Peter LR
2 years ago

Well , what a blessing for us not to have entered the Euro: it was obviously an emasculating poisoned chalice which robs politicians of sufficient ba lls to make real national change.

Rob Britton
RB
Rob Britton
2 years ago

Salvini, like Le Pen, has gone mainstream and turned into just another establishment politician. It seems like it is only the UK which has the courage of its convictions and leaves the EU.

Michael James
MJ
Michael James
2 years ago

I hadn’t heard that Hayek was an ancestor of the euro. I thought he advocated currency competition within countries.

Thomas Fazi
Thomas Fazi
2 years ago
Reply to  Michael James

Let’s say he advocated a different path to reach the same objective: the denationalisation of money. This is a good speech on the topic by Otmar Issing, former chief economist and member of the board of the ECB: https://www.ecb.europa.eu/press/key/date/1999/html/sp990527.en.html
“Although the path taken to achieve denationalisation of money has been very different than that advocated by Hayek, the ultimate objective being sought by Hayek, i.e., monetary independence from political interference and price stability, have, to all intents and purposes, already been achieved”.

Franz Von Peppercorn
MB
Franz Von Peppercorn
2 years ago
Reply to  Thomas Fazi

That just means no political decisions in interest rates etc. What’s that got to do with the Euro particularly.

Matt B
Matt B
2 years ago
Reply to  Michael James

Maybe he meant Bitcoin?

Franz Von Peppercorn
MB
Franz Von Peppercorn
2 years ago

This seems pretty ludicrous.

“ he point is the way in which the EU has succeeded in shifting any opposition to itself from the socioeconomic terrain to the identitarian terrain, thus fuelling the very culture wars that are tearing our societies apart.”

Er, what now. How is the EU responsible for an
“identitarian” group of parties hostile to its multicultural stance? How did it shift debate exactly. All of those parties were nationalist to begin with and their economic policies vary.

Cheryl Jones
CJ
Cheryl Jones
2 years ago

You want money. The EU gives you a loan. You have to pay that money back. Somehow. The EU now controls you because it holds your debt. Suddenly the EU seems like a great idea to a politician who wants to win votes by spending money.