We use cookies to help improve and maintain our site. More information.
close

September 19, 2019

Italy's 2020 budget will be a moment of truth

The exit of Matteo Salvini from the government has taken some of the hot air out of the 2020 budget. But even without his demands of large tax cuts, the budget process will be extraordinarily difficult. 

Federico Fubini observes that the way ahead for the government is not a narrow path, as Pier Carlo Padoan once put it, but a maze. The only measure everybody agrees on is to avoid an otherwise obligatory VAT increase. That alone will eat up most of the fiscal room for manoeuvre. The various reforms supported by Five Star, the continuation and extension of the citizens' income, the partial undoing of the pension reforms will be hard to do. 

Giuseppe Conte yesterday called the leaders of Italy's three largest trade unions into his office to hear their demands. Corriere della Sera noted this hasn't happened for many years. It is a reminder that this is now a government firmly rooted on the left.

We expect the EU to grant some extra fiscal leeway, but not much. And Italy needs a lot of investment - including in public infrastructure and education.

What will be the influence of Matteo Renzi on this process? Not destructive, but likely to be very disruptive. Lucia Annunziata is no fan of him either, but she argues his exit from the party is important because it reveals that the PD has not managed its passage from opposition to government well. Renzi does not so much pose a danger to the government majority. His game plan is a different one:

"...the real danger Renzi constitutes for the Government is not that he might abandon it, but that he overshadows it. And it has already happened."

Show Comments Write a Comment

September 19, 2019

Austria's soft faced far-right

We did not report on the election of Norbert Hofer as the new leader of the far-right FPÖ on Saturday. If anything it sets the party up to becoming once again a possible junior partner for the ÖVP after the elections in two weeks. 

Hofer is a friendly and soft-spoken face. This contrasts with firebrands like Heinz Christian Strache, the former leader, and Herbert Kickl the former interior minister. Despite his softness, however, everyone still expects Hofer to deliver a tough far-right stance. His speech over the weekend under their campaign slogan: "Fair. Social. Loyal to the homeland" just gave a taste of this.

The FPÖ is stable around 20% in the polls. Whether Hofer will make a difference we shall see. The party regained support quickly after the Ibiza affair which brought down Strache and subsequently the coalition government. Party supporters were much more loyal than expected, and the affair has been dismissed by the party as a stitch-up. If anything it may have solidified the support the FPÖ enjoys in the Austrian regions. 

With less than two weeks until the election, polls suggest that as many as a third of voters remain undecided. The ÖVP under Sebastian Kurz is set to come first in the polls, though their support declined over recent weeks. But Kurz will have to find a coalition partner.

An ÖVP coalition with the second-placed social democrats remains unlikely, meaning that the fresh-faced far-right party could, once again, become junior partners. Alternatively, the ÖVP may choose to partner with the Liberals and/or Greens. Kurz himself has praised Hofer and kept the door open for a future partnership under the FPÖ's new leadership.

A rerun of the ÖVP/FPÖ coalition is also what the far right party is promoting in its two campaign videos. The first depicts Kurz and Hofer as a couple seeking a relationship counsellor. The second is a lady dressed in green making a pass on Kurz in a bar, only to be saved by Hofer. The message of the two is to vote for the FPÖ to save the coalition and the ÖVP from drifting to the left.

Show Comments Write a Comment

This is the public section of the Eurointelligence Professional Briefing, which focuses on the geopolitical aspects of our news coverage. It appears daily at 2pm CET. The full briefing, which appears at 9am CET, is only available to subscribers. Please click here for a free trial, and here for the Eurointelligence home page.

 

Recent News

  • April 09, 2019
  • What can go wrong now?
  • April 13, 2018
  • German support for eurozone reform next to zero...
  • ... and no support for France on Syria either
  • A French sermon
  • Why the euro endures
  • April 19, 2017
  • Shadows of money
  • Breppe Grillo vs Eurointelligence
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • January 06, 2020
  • A decade that started with a bang
  • What to expect of Spain's next government
  • Divide et impera: Macron's pension reform strategy
  • January 29, 2019
  • What comes after plan B fails? Plan C, of course. C for cliff-edge
  • Gilets jaunes, how to structure a movement in free flow?
  • European Court of Auditors criticises Juncker’s investment fund
  • February 26, 2018
  • Angela Merkel's cabinet
  • March 27, 2017
  • Governing formation troubles - Northern Ireland edition
  • Did Trump present Merkel with a bill for Nato?
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • August 17, 2020
  • How Putin could divide the EU over Belarus
  • The impossible mission of forming a federal government in Belgium
  • September 23, 2019
  • Corbyn’s last big battle
  • Germany’s CO2 compromise meets all targets - except the climate targets
  • November 13, 2018
  • Peak Salvini?
  • Protest uberisation
  • January 05, 2018
  • Catalonia's government by Skype
  • The case for EEA membership
  • February 28, 2017
  • Is Hamon losing the right wing of his party?
  • Something we just don’t understand
  • Solve the problem
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • March 11, 2020
  • While Italy is in lockdown, Germany allows football matches
  • Ireland grand coalition
  • May 31, 2019
  • Salvini’s frightening strength
  • The significance of Corbyn’s latest flipflop on the referendum
  • August 20, 2018
  • ... and a subtle shift in EU policies towards both Russia and Turkey
  • Nothing to celebrate about the end of the bailout programme
  • Support for Brexit holding up
  • November 09, 2017
  • From street protests to road closures
  • What Russia wants
  • January 31, 2017
  • Project fear against Italexit
  • On how not to frustrate Brexit
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • June 29, 2020
  • Édouard Philippe - mayor or prime minister?
  • Sir Humphrey, R.I.P.
  • October 17, 2019
  • A dangerous game for the EU
  • After Brexit, get ready for a German EU budget rebate
  • February 04, 2019
  • Watch out for the resurgence in Tory unity
  • The gilets-jaunes' effect on the European elections
  • What did he possibly mean by that?
  • May 25, 2018
  • Rejected by US, Germany is turning towards China...
  • ...and France is turning to Russia
  • UK ties Galileo to security partnership
  • Germans are discovering miniBoTs
  • September 14, 2017
  • Bravo Mr Juncker
  • ... what he said about the labour market
  • ... and what his speech means for Brexit
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • July 14, 2020
  • Why the far-right might win in the end
  • December 02, 2019
  • Will pension reform protests spiral out of control?
  • Malta's PM resigns over murder case
  • April 24, 2019
  • May's final and biggest gamble
  • Will the EP be Brexit's great parliamentary beneficiary?
  • Can Loiseau fight the far right given her past?
  • September 12, 2018
  • It is easy to criticise Chequers but very hard to come up with an alternative
  • February 05, 2018
  • How big is Germany's external surplus, really?
  • Macron's first election test
  • Coeure's endorsement of a fiscal union
  • July 03, 2017
  • Can Greece exit its programme without a credit line?
  • The softening Brexit
  • Macron's state of the nation address
  • November 28, 2016
  • And now what Monsieur Fillion?
  • The inescapable logic of an interim agreement
  • On Germany's foreign policy post-Trump
  • How to lose against the populists
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 14, 2020
  • There is no silver bullet for the second wave
  • March 16, 2020
  • Why many of the Covid-19 statistics are misleading
  • September 17, 2019
  • Beware of the diplomacy of humiliation
  • Germany’s climate hypocrisy
  • March 18, 2019
  • May's deal still on the table. Don't rule it out.
  • EPP decision on Fidesz still open
  • On the defeat of liberalism
  • September 21, 2018
  • SPD ministers want to continue grand coalition
  • March 28, 2018
  • The real reason for the sanctions against Russia
  • Wishful thinking: Brexit edition
  • Wishful thinking: Future of euro edition
  • Wishful thinking: Italy edition
  • October 02, 2017
  • Catalonia recalls EU and eurozone instability
  • French trade unions increase pressure over labour reforms
  • Watch out for a political accident in the UK
  • Municipal elections boost Portugal's Socialists
  • April 10, 2017
  • Nein, nein, nein, und nein
  • Sounds like a bad Brexit story, but ain’t
  • On how not to exit the euro
  • October 17, 2016
  • Ceta is dead for now
  • L’après-Hollande, c'est Hollande
  • SPD against Russia sanctions
  • Nissan to join customs union and other fanciful tales
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • May 29, 2020
  • Why it is not €500bn
  • Is reshoring the answer to this pandemic?
  • January 22, 2020
  • Erdogan and European Libya diplomacy
  • On the importance of mutual recognition agreements in the Brexit trade talks
  • September 17, 2019
  • Beware of the diplomacy of humiliation
  • Germany’s climate hypocrisy
  • May 10, 2019
  • Target2 debate raises legitimate questions with unsatisfactory answers
  • No more German questions please
  • January 04, 2019
  • Will the AfD become the Dexit party?
  • Romania's corruption problem in the spotlight of its EU presidency
  • August 28, 2018
  • Urban politics and national crisis - the Irish case
  • How anti-semitism became one of the main issues in British politics
  • April 23, 2018
  • More bad news for the SPD
  • Will Theresa May accept a customs union? The Times says yes. We think so too.
  • A comeback for Marine Le Pen?
  • December 21, 2017
  • Catalonia votes
  • A deputy prime minister resigns
  • Will Gibraltar result in another Irish fudge?
  • Blood, sweat and tears
  • August 21, 2017
  • Soft, getting softer
  • Tsipras' chances of a boost
  • On the fallacy of a middle-ground option for the eurozone
  • April 19, 2017
  • Shadows of money
  • Breppe Grillo vs Eurointelligence
  • December 19, 2016
  • Inside the customs union, outside the single market
  • Back to the future in Italy
  • The lessons from Fillon's first gaffe
  • Montebourg - a bit of everything
  • The Maastricht error
  • If Paul Romer is right...
  • August 22, 2016
  • Gold for Brexit
  • EU and Turkey talking past each other
  • Switzerland is the next migrant transit country
  • On the death of neoliberal economics
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 14, 2020
  • There is no silver bullet for the second wave
  • August 17, 2020
  • How Putin could divide the EU over Belarus
  • The impossible mission of forming a federal government in Belgium
  • July 20, 2020
  • What will happen on January 1
  • June 24, 2020
  • How not to fob off Karlsruhe
  • June 01, 2020
  • Refugees' mass eviction in Greece
  • This is Brexit week again
  • May 10, 2020
  • On court rulings and folk economics
  • EU regions - some far better on Covid-19 but not on downturn
  • April 20, 2020
  • What if we are wrong?
  • April 01, 2020
  • Stats with bad numbers
  • March 13, 2020
  • France closes schools but allows municipal elections
  • Multiply by ten
  • February 24, 2020
  • Coronavirus comes to Europe
  • Municipal elections - a precursor for Le Pen?
  • Germany and France get involved over Idlib
  • February 06, 2020
  • One left, others want to join - the new EU accession process
  • On the practical limits of fiscal policy
  • January 21, 2020
  • A truce over French digital tax and US tariff retaliation - really?
  • Climate crisis faces central banks with radical uncertainty
  • Why strong enforcement rules will be critical in the EU/UK trade agreement
  • January 06, 2020
  • A decade that started with a bang
  • What to expect of Spain's next government
  • Divide et impera: Macron's pension reform strategy
  • December 23, 2019
  • What’s behind the NordStream2 sanctions
  • An important ruling by the Dutch constitutional court
  • This time Popolare di Bari brings EU bank resolution into question
  • The reversal of the eurozone external balances
  • No Christmas truce in France
  • Brace for Erdogan's foreign policy ambitions
  • On the decline of the centrist left
  • December 10, 2019
  • Squeezed between US and Russia - Open Skies edition
  • November 28, 2019
  • Merkel’s legacy
  • November 18, 2019
  • Is Macron facing another uprise against elites?
  • Forget the inflation target: Lagarde’s job is much bigger.
  • November 07, 2019
  • Merkel's Huawei decision now questioned by SPD
  • Decentralisation: the Achilles' heel of Macron?
  • October 29, 2019
  • People's Vote descends into Civil War
  • CDU at odds on dealing with extreme parties
  • October 21, 2019
  • Philippe to brace for more union protests
  • Greens are the electorates' new favourite
  • October 14, 2019
  • What is Turkey's medium-term game?
  • Germany sabotages EIB climate change policies
  • October 07, 2019
  • What did Conte know?
  • September 30, 2019
  • A pyrrhic victory for Kurz
  • Will there really be UK elections?
  • September 26, 2019
  • Could Johnson be headed for an electoral landslide?
  • Macron's conquest of public opinion over pension reform
  • Marion Maréchal keeps dream of political comeback alive
  • September 23, 2019
  • Corbyn’s last big battle
  • Germany’s CO2 compromise meets all targets - except the climate targets
  • September 20, 2019
  • Violence in Northern Ireland - not so far-fetched after all
  • German coalition fails to agree climate deal, but negotiations continue