Page 59 - The Economist Asia January 2018

Europe 43
The Economist January 27th 2018
2 ciency with better economic protection. If ning a parliamentary majority, and the founder, Beppe Grillo, has advocated a
he does not succeed, he could wind up as a three leaders have agreed that, if they gain consultative referendum, but no such pro-
failed reformer like Mr Renzi, leaving the one, the party with most votes should posal figures in its electoral programme, a
terrain to figures like Ms Le Pen or the left’s name the prime minister (who would, sign ofgrowingdifferences that may lie be-
Jean-Luc Mélenchon. Their versions of however, need to be endorsed bythe presi- hind his decision this week to separate his
welfare-state reform promise to render the dent, Sergio Mattarella). blog from that of his party). The latest poll,
labour market even more rigid, and to The League, which campaigns for last September, showed opinion for and
spend money that France does not have. It tighter immigration controls and sits in the against the euro to be tied.
already spends 31.5% of GDP on social pro- European Parliament with other populist But even in the League’s heartland,
tection, the mostin the OECD and nearlyas parties such as France’s National Front and grumblingabout the single currency is one
high asSweden atitspeak. An electoral vic- Austria’s Freedom Party, might also gain thing; actually quitting it another. Vicenza
tory by Italy’s Five Star Movement in power as part of a broader coalition. Or it registered the highest turnout of any prov-
March could have a similareffect. might join the intermittently eurosceptical ince in the Veneto region in a League-spon-
As for Poland’s PiS, it shows scant con- Five StarMovement (M5S) in a partnership sored consultative referendum on autono-
cern for the long-term affordability of its that Mr Salvini has discounted publicly, my last year. But its export-oriented firms
welfare policies. Even as Poles rapidly age, but which senior League officials are ready are profiting handsomely from the recov-
PiS is cutting the retirement age from 67 to to contemplate privately. That is the night- ery in Europe, and no one seems keen to
65 for men and 60 for women. That will mare scenario that terrifies Italy-watchers. rock the boat. Sales to the rest of the EU
furtherdepress the ratio ofworkers to pen- Mr Borghi’s hostility to the euro is un- were up by 4% last year, says Luciano Ves-
sioners in a country that already suffers dimmed. “We live in a country whose di- covi, the local presidentofthe bosses’ asso-
from mass emigration and a low fertility rectcompetitorcan shutdown ourbanks if ciation, Confindustria, who sees the euro
rate. But however misguided, such moves we do not obey it,” he says. “Is that some- as indispensable. Germany may be Italy’s
are popular. Ifliberal partiescannot devise thing a nation that is supposed to be free main competitor, he accepts, but in and
their own credible alternatives, populists can endure?” around Vicenza it is also the main custom-
could end up winning and holding power The depth of the League’s commitment er. Much of the leather upholstery that
in more European countries by promising to leaving the euro is less clear. On January goes into German luxury cars is tanned at
welfare forall. 7 11th Mr Salvini said Italy would need to co- Arzignano, west ofthe city.
ordinate its exit with that of “other coun- Vicenza also hostsEurope’sbiggestgold
tries in difficulty”, and that the next gov- and jewellery show, Vicenzaoro, which
Italy ernment should anyhow focus on negoti- closed on January 24th. Among manufac-
ating changes to the single currency. If turers, attitudes to the single currency are
League of sceptics conceded, theywould obviate the need for more jaundiced, says Roberto Ciambetti,
leaving. That appears to kick Italy’s depar- the Speakerofthe regional assembly and a
ture a longway down the road. senior League official. The strength of the
There are two reasons for the League’s euro curbs sales outside the EU and makes
newly cautious approach, Mr Borghi says. exporters vulnerable to competition from
MILAN AND VICENZA First, the defeat of Marine Le Pen in last Turkey. But that, he says, is a reason for re-
Despite the fears, no one reallywants year’s French presidential election shat- visiting the rules surrounding the euro, no-
Italyto leave the euro
tered hopes of France and Italy leaving to- tablythe 3% deficitlimit, notforgetting out.
HE man who has done more than any- gether. MrBorghi isworkingon procedures There is plenty to fret about in Italy’s
Tone to create an air of apprehension fora unilateral exit, buttheywould need to election. The parties are making wild
around Italy’s coming election is a genial include, for example, measures to prevent promises that, if implemented, would add
fellow with a round face, a broad nose and a run on the banks. A second reason arose substantially to Italy’s already vast public
silvery hair combed forward in the style of from the need for broad popular support debts of more than 130% of GDP. But the
the ancient Romans. Five years ago, Clau- for a decision, the League maintains, that idea thatthe vote could lead to an exit from
dio Borghi, a former managing director of can only be taken by government (M5S’s the euro looks fanciful. 7
Deutsche Bank in Italy, converted Matteo
Salvini, the head of the Northern League,
to the view that Italy should quit the euro.
“Salvini called me athalfpastone in the
morning,” he recalls. “But it didn’t matter
because I don’tsleep.” Aftertwo daysof ex-
planation, Mr Salvini, soon to become
leader of the League, was convinced. The
following year, he and his new economic
adviser set off on a “Basta euro” (roughly,
“dump the euro”) tour.
The concern in EU governments and
capital markets over the vote on March 4th
centres on the possibility that the League
will return to government, and the remot-
er, but still conceivable, prospect of Mr Sal-
vini becoming prime minister. His party
has only recently, and only barely, been
overtaken in the polls by its electoral ally,
Silvio Berlusconi’s Forza Italia. Their alli-
ance, which also includes a smaller far-
rightgroup, the BrothersofItaly, appears to
be the onlyone with even a chance of win- Which way will Salvini jump?