Europe News

Italy is side-lining itself from the EU. And its populist deputy leader stands to benefit

Key Points
  • Tensions between Rome and Brussels have risen on different occasions since the anti-establishment government took power last June.
  • Some Italian politicians have recently joined French protesters, creating a rift with its neighboring country.
PESCARA, ITALY - FEBRUARY 7: Italian Interior Minister Matteo Salvini attends a political convention for the closure of the upcoming regional election in Abruzzo, on February 7, 2019 in Pescara, Italy.
Antonio Masiello | Getty Images News | Getty Images

Italy's relationship with the EU has deteriorated since an anti-establishment government took the reins in Rome last year. And for Deputy Prime Minister Matteo Salvini, that breakdown has coincided with a surge in popularity. 

Tensions between Rome and Brussels have risen on different occasions since the new coalition took power last June. There has been a dispute over how much the Italian government wants to spend; an intense exchange of words over the collapse of a bridge in the city of Genoa during the summer; and an ongoing battle over immigration. In addition, some Italian politicians have recently joined French protesters, creating a rift with its neighboring country.

"It is clear that the relationship between Italy and Brussels is much more fractious (now) than in the past," Wolfango Piccoli, a political and policy risk advisor at research firm Teneo told CNBC via telephone.

He described the government's attitude toward Europe as a "vote-winning" strategy.

Europe is not helping.
Wolfango Piccoli
Co-President of Teneo Intelligence

The Italian government is a coalition between the left-leaning Five Star Movement (M5S) and the right-wing and anti-immigration Lega party. Both have taken a strong stance against what could be considered a mainstream view in Europe, particularly when it comes to immigration.

Salvini, who heads up the Lega party, closed Italian ports to migrant rescue vessels last year. He has also criticized a European-wide distribution plan for migrants.

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"Unfortunately, Italian governments over the past five years have signed agreements (in exchange for what?) so that all these ships disembark immigrants in Italy," Salvini said last year. "With our government, the music has changed and will change."

Francesco Papadia, a senior fellow at the Brussels-based think tank Bruegel, believes Salvini's "macho" approach is in contrast with what's actually needed to deal with migration. However, his stance has clearly bolstered his popularity. Opinion polls show that Lega has constantly gained more support since taking power.

Salvini's party is the most popular among Italian voters, according to current opinion polls, ahead of its coalition partner by 10 percentage points. At the start of this new government, M5S was ahead of Lega by five percentage points.

In upcoming European parliamentary elections, due in late May, Lega is also polling well. It's set to become the second single-largest party in the European chamber with 28 out of 705 seats, according to a survey by the European Parliament.

A poll late last year by Italian newspaper La Repubblica also showed that 58 percent of Italians see Salvini as the country's leader, even though he's just one of the deputy prime ministers. The actual prime minister, Giuseppe Conte, was only seen as the country's leader by 16 percent of those surveyed, Reuters reported.

A 'noisy spectator'

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Last fall, there was also a strong exchange of words over the government's spending plans. The European Commission said that an initial draft budget for 2019 was risking the financial stability of the country: Rome's intention to increase spending was an issue given the country's large debt pile. After much confrontation, Italy lowered its deficit target from 2.4 percent to 2.04 percent. The previous government had a deficit target of 0.8 percent for 2019.

With these separate confrontations over the last year, analysts believe Italy is side-lining itself from EU policy making. However, these EU institutions are not actively trying to stop that, analysts believe.

"Europe is not helping. There is this attitude of some people in Brussels not shutting up," Piccoli told CNBC. Several European commissioners have publicly told off the Italian leaders for challenging the bloc's rules.

Italy is still the euro zone's third-largest economy and one of the six founding members of the European Union. "The Italian government cannot be ignored entirely. But we have seen moments where Italy has had more influence and moments where its influence is less. This is one of the lesser moments for Italian influence," Jones told CNBC via email.

Piccoli added that Italy has become a "noisy spectator" in European politics which is "unlikely to change any time soon."