OPINION: The potentially disruptive impact of a far-right, populist win at Italy’s upcoming general elections may be contained by the urgency of the energy crisis and the stringent requirements to access billions of euros of European funds.
As Italians head to the polls on 25 September, ballots point to a win for a three-group coalition led by Giorgia Meloni’s Brothers of Italy party, propped up by former prime minister Silvio Berlusconi’s Forza Italia and Matteo Salvini’s League.
There is plenty in Meloni’s expected rise to power that has worried domestic and international observers, from the party’s neo-fascist roots to her coalition partners’ pro-Putin gestures.
Salvini and Meloni have campaigned in recent years on a clear anti-European, anti-euro message, calling for an ‘Italexit’ and the return to a national currency.
On Russia, they have a solid repertoire of pro-Kremlin strongman politics: Berlusconi often listed Vladimir Putin as “a personal friend”. Salvini was infamously photographed in Moscow wearing a Putin t-shirt and, more seriously, held secret meetings with the Russian ambassador in March, after the start of the invasion of Ukraine.
Critics have questioned this group’s willingness to stick to Europe’s sanction plans against Russia, the role of Italy in European at a time of geopolitical tensions, and the response to the energy crisis.
Could a Meloni-led Italy move towards the Hungarian position, weakening Europe’s united front against Moscow? Would a far-right populist coalition ditch the energy transition efforts and double down on hydrocarbons?
The urgency of the energy crisis and the path of reforms locked in by the EU and the previous Italian government are likely to supersede populist urges and maintain a modicum of continuity, in the short term at least.
The new government would have only a couple of months to put together and approve a new budget before the end of the year.
Energy supply crisis
There is limited scope for radical deviation from Draghi’s earlier blueprint, and even less so when Italy is buffeted by an energy supply crisis of the kind that is most effectively tackled at a European level.
And while Meloni and Salvini openly courted climate change sceptics in their quest for votes, Italy cannot easily turn back a prescriptive path of reforms that the Europe Union set as precondition for the release of some €190 billion in loans and grants from the post-Covid European Recovery Fund. Renewables and transition targets are a part of that.
Meloni will desperately need that cash to spur growth, stave off a looming recession and jumpstart the sclerotic Italian economic machine. Without it, her time in power may prove short-lived.
She knows as much, and the more muted tone of the latest campaign weeks may indicate she is conscious of how limited room for maneuver her government would actually have.
Plans for new floating regasification terminals are likely to go ahead, but so will a renewed push to expand renewables capacity by cutting red tape and speeding up permitting processes.
Faced with contingencies on multiple fronts, even a far-right Meloni government may go green.
(This is an Upstream opinion article.)