Sputnik: Is Italy set for a recession due to new budget plans and its disagreements with the EU?
James Newell: It’s very uncertain at the moment because there have been several different messages coming from various spokespeople of the government. On the one hand you’ve got Luigi Di Maio, who has been insisting on citizenship income, which is going to be very expensive.
On the other hand, Matteo Salvini, who is, of course, the 5 Star Movement’s coalition partner, with his flat tax, is making much more conciliatory noises, talking about the way in which the government would seek to respect the parameters set down by the EU.
My own feeling is that ultimately the government will be constrained by the parameters that are involved in its membership in the single currency, and it doesn’t really have any choice. Electors will be moved by the government’s economic performance and it won’t want to do anything to jeopardize that; so it’s very much wait and see, but my guess is, in the end the government will have to bow to the inevitable.
James Newell: That has been a recurring theme in recent weeks, months and years. However, it’s very unlikely because in order for Italy to leave the euro, it would have to change its constitution and in order to exchange its constitution it would probably, unless it could achieve the necessary two-thirds majority within parliament, have to hold a referendum on it. The institutional procedures that would have to be gone through to bring that about would be so complex that certainly anything like that is perhaps unlikely in the immediate term.
The views expressed in this article are those of the speaker, and do not necessarily reflect those of Sputnik.
The views and opinions expressed in the article do not necessarily reflect those of Sputnik.