Europe’s euroskeptic politicians cheered and Milan’s stock index rose Friday after Italy’s populists put an end to three months of political gridlock, staving off the threat of new elections and forming Western Europe’s first populist government.
The anti-establishment 5-Star Movement and right-wing League are to swear in their Cabinet later Friday, capping a roller coaster week of political and financial turmoil by reaching agreement with Italy’s president to drop a euroskeptic economy minister.
Premier-designate Giuseppe Conte, who had promised to be the “defense attorney of the Italian people” in his first, failed bid to form a government, got a taste of the expectations many Italians have for his revived team as he reported for work Friday. He was confronted by a group of recently laid-off workers protesting outside parliament.
“You have to trust all of us,” Conte assured them, after listening closely to the workers’ plight.
Stocks rally, populists thrilled
Milan’s stock index opened up 2.5 percent, and Italy’s borrowing rates eased further after having soared earlier in the week when it appeared that Italy was heading to new elections that could have turned into a referendum on the euro.
Europe’s populists and right-wingers cheered the news as a slap in the face to Brussels, with French far-right leader Marine Le Pen tweeting: “Bravo to the coalition.”
“It’s a victory of democracy over intimidation and threats from the European Union,” said Le Pen, who shares the League’s firm anti-immigrant stance. “Nothing will stop the return of the people to the stage of history!”
“Best of luck to both of those parties, to both of those leaders,” Nigel Farage, former leader of Britain’s UKIP party that played a key role in the Brexit campaign, said in a video message. “One thing though: Gotta stay strong, the bully boys will be after you.”
It was a reference to European Union officials in Brussels, who have made clear in recent days their concern — in occasionally undiplomatic terms — about the euroskeptic direction of Europe’s third-largest economy.
“I’m in deep love with Italy, bella Italia,” European Commission President Jean-Claude Juncker told a conference on Thursday. But he said he refused to accept that all of Italy’s ills can be blamed on the EU.
“Italians have to take care of the poor regions of Italy. That means more work, less corruption, seriousness. We will help them, as we always did. But don’t play this game, insisting and loading with the responsibility, the European Union.”
His comments sparked outrage in Italy, with League leader Matteo Salvini blasting them as “racist” in his victory speech late Thursday in the League’s base in northern Lombardy.
“With the new government, we’ll see how to make them respect the rights and dignity of 60 million Italians who want cooperation from Europe, not insults,” he said.
Juncker’s verbal lashing targeted at a member state was unusual, especially since he hardly misses an opportunity to express his love for founding member state Italy. The EU Commission president had also chided one of his commissioners earlier in the week for comments deemed too harsh on Italy.
Week of turmoil
Stock markets in Italy and globally had plunged and Italy’s borrowing rates soared earlier in the week when it appeared Italy was heading to new elections after President Sergio Mattarella vetoed the prospective partners’ first pick for economy minister, collapsing the proposed coalition.
Within a matter of hours though late Wednesday and Thursday, 5-Star leader Luigi Di Maio and League leader Matteo Salvini agreed on a compromise: Paolo Savona, who had expressed doubts about whether Italy should stay in the euro, was shifted from the economy ministry to the ministry for European affairs.
In his place at the economy ministry is Giovanni Tria, a mainstream economist at Rome University who is considered close to the Forza Italia party of ex-Premier Silvio Berlusconi.