Home The Washington Diplomat April 2017 Italy Fears Becoming Latest Victim of Populist Uprising Sweeping Europe

Italy Fears Becoming Latest Victim of Populist Uprising Sweeping Europe


a4.italy.varricchio.story Photo: Lawrence Ruggeri
Armando Varricchio,
ambassador of Italy to the United States

Political volatility and paralysis are about as Italian as al dente pasta and a good glass of chianti. Ever since Italy’s multi-party system was introduced in 1946, politics has been a rough-and-tumble, take-no-prisoners sport in the country that gave us gladiator fighting and the Roman Empire.

But like so many of its European counterparts, Italians are confronting a populist tsunami that has upended the conventional landscape. The country of 60 million is also grappling with stubborn economic malaise that could tip the eurozone back into a financial meltdown, an unrelenting refugee crisis and the residual threat of Islamic-inspired terrorism that has unnerved the entire continent. In addition, Italy must contend with a new American president who has openly dismissed the transatlantic alliance that has served as a bedrock of peace and prosperity since World War II.

For Italians, political dysfunction is nothing new. But even by Italian standards, transatlantic politics has become downright scary.

Yet Armando Varricchio, Rome’s polished ambassador to the U.S., says we have nothing to fear from democracy — or the populist tidal wave it may produce.

“We should never fear elections,” he said, “because whenever people are active and want to be engaged and take responsibility by casting their vote, this is a positive sign that democracies work.”

But what if the result is empowering parties with xenophobic, nationalist undertones that rail against globalization and want to destroy everything the establishment stands for?

“The very term populism sounds weird to me,” the ambassador mused. “Because [democracy] is governed by the people for the people” — and populism literally means supporting ordinary people.

Varricchio said that whenever people participate in the political debate, it is a healthy sign that democracy, however ugly, is functioning. At the same time, he admits that much of the current debate is being driven by fear — fear of inequality, immigration, elitism and rapid social change — whether those fears reside in Iowa or Italy.

Italy’s embattled former prime minister, Matteo Renzi — himself a victim of the populist revolt sweeping the continent — called populism “the offspring of fear.”

Varricchio was more circumspect.

“I feel that fear can be expressed in many ways,” he told The Diplomat in a lengthy interview at his stately “Villa Firenze” residence. “[It] can be translated either in a more aggressive attitude — in the desire to protect your own world, be it your community or your country, trying to turn your back on this global phenomenon of the free movement of ideas, of religions, of goods — or it can translate into a will not to participate, not to be engaged. I think that it is always important to be able to give voice to these fears and also turn them into a positive flow that could be channeled within the existing democratic path. I think that what is scaring me is that there are too many people in our societies that don’t want to take responsibility, don’t want to play the game. They simply give up. But whenever our citizens are ready and willing to participate and to transform their ideas, their fears, their desires, their dreams into a political platform, this is always good.”

Elections Threaten EU

Europe’s citizens will get a chance to do just that, for better or worse, in a string of critical elections this year that could portend the future of the European Union itself.

Last month, the Netherlands, usually a quiet bastion of progressive values, became a high-profile test case for the populist experiment. Center-right Prime Minister Mark Rutte’s party fended off a challenge from far-right maverick Geert Wilders, who was Europe’s Donald Trump long before the billionaire mogul even entered U.S. politics. The win comes as a huge relief for Europe’s mainstream parties. Despite his second-place finish, Wilders vowed to play a key role in the new government’s formation, and his nationalistic fervor still resonates with a broad swath of the population. He’s called for the “de-Islamification” of the Netherlands by closing mosques, banning the Koran and shutting down the country’s borders to refocus the government’s energy on what he views as its neglected natives.

Whether the Dutch vote serves as a bellwether for euroskeptic insurgencies elsewhere remains to be seen.

Now the focus shifts to France’s highly anticipated elections, which take place in late April, with a second round in May. Like Trump, populist firebrand Marine Le Pen has defied political convention and risen from the ashes by pushing a fiercely anti-immigrant, anti-globalization agenda. If France falls to Le Pen, who has advocated for a referendum to pull the country out of the EU, the repercussions could be disastrous for Brussels, which is still reeling from Britain’s surprise decision to ditch the 28-member bloc.

Photo: By Diliff – Own work / Wikimedia Commons CC BY-SA 2.5
The Colosseum in Rome, built around 70 AD, is considered one of the greatest works of architecture and engineering in ancient history and a symbol of the Roman Empire.

Another wildcard is Italy, which may hold early elections this year, further jeopardizing European unity. And if the populist domino effect takes down stalwart Angela Merkel in Germany’s elections later this fall, it could spell the demise of the entire EU project, which was spearheaded by Paris and Berlin and cemented in 1957 with, ironically, the Treaty of Rome. (The current political climate hasn’t stopped the Italian Embassy from celebrating the 60th anniversary of that treaty with a series of events this year.)

In terms of GDP alone, the governments in play this year account for some 75 percent of the euro area. Even former Italian Prime Minister Mario Monti says the EU is at risk of collapsing under the weight of widespread mistrust, as voters accuse the old guard of failing to deliver inclusive economic growth and protecting them against perceived threats such as radicalism and refugees.

Varricchio — a seasoned diplomat who previously served as deputy secretary-general of Italy’s Ministry of Foreign Affairs — carefully skirted around the question of whether the upcoming elections could imperil the EU’s survival, refusing to “prejudge their outcome.” But he is painfully aware of the tectonic shifts ahead — and the fact that Italy may be engulfed by them.

“We are very much integrated, so whatever happens in a single member of the EU will produce effects on other countries,” he said. “So whatever happens in the Netherlands will produce effects in France, and then eventually in Germany in September, or in Italy in case there is a possibility of elections.”

Down but Not Out

In Italy, there is always the possibility of elections. By some estimates, the country has cycled through roughly 63 governments in 70 years.

Ironically, this latest bout of uncertainty was sparked by efforts to stabilize Italy’s fractured political system.

Last year, then-Prime Minister Renzi introduced a series of constitutional changes intended to streamline the government. Under Italy’s two-chamber system, the ruling party needs a majority in both the Senate and lower house to pass legislation — a high bar in a parliament composed of “a patchwork of parties” that “juggle numerous particular interests in order to put together a large enough coalition to pass laws,” explained Johns Hopkins professor Erik Jones in an October 2016 piece for Foreign Affairs magazine.

a4.cover.italy.glance.storyRenzi’s plan was based on two pillars. One was to reduce the powers of the Senate, the influential upper house, by turning it into an indirectly elected body of regional and municipal appointees.

The other was to introduce a new electoral law for the lower house that would give the party that won over 40 percent of the vote a generous portion of extra seats to ensure it controlled a majority of parliament. If no party reached that threshold (a likely outcome in Italy’s fragmented system), a runoff ballot would award the bonus seats to the winner, again guaranteeing that one party held a solid majority.

The goal was to reduce the need for unwieldy coalition governments, speed up the decision-making process and push through the structural reforms that Renzi argued were needed to jumpstart Italy’s stagnant economy.

The “no camp” — led by the populist Five Star Movement and right-wing Northern League — argued that the changes would have concentrated too much power in the prime minister’s hands and removed too many checks and balances.

Renzi put the first phase of his plan, the Senate overhaul, up for a referendum in December. But by doing so, he turned a seemingly arcane reform into a plebiscite on his leadership — and a chance for Italians to lodge a protest vote against the establishment. They did just that, and Renzi lost the referendum — by a wide 20-point margin — forcing him to resign.

Shortly afterward, a constitutional court struck down the second part of his plan to hold runoffs for the lower chamber. That means Italy now essentially reverts back to the status quo — “grand” coalition governments, which, as the ambassador pointed out, are the norm in many European countries, including Germany and Britain.

Varricchio told us that any further talk of reforms has been shelved for now.

But Renzi is not out of the picture. The young upstart former mayor of Florence — who rose to prominence as an anti-establishment outsider, only to come to represent the establishment — is busy engineering a comeback. He’s pressing President Sergio Mattarella to call early elections, which aren’t scheduled until 2018.

Beppe Grillo, a standup comic-turned-cofounder of the Five-Star Movement, is also pushing for snap elections, hoping to capitalize on the party’s momentum.

Meanwhile, the man who makes that call — President Mattarella — is eager to avoid any more chaos and has thus far resisted entreaties to hold elections this year.

Renzi himself is mired in a leadership battle within his own Democratic Party, where “mass resignations by left-wing opponents now threaten his ambitions to reassert control over the party, win back disillusioned leftist voters and halt a surge in support for populists,” wrote Giada Zampano for Politico’s Europe edition on March 13.

That leaves the Five Star Movement in a prime position to seize on voters’ frustration with the ruling elites who have failed to fix Italy’s chronically sluggish economy. A recent poll showed Five Star holding a strong edge over the disarrayed Democratic Party in a possible contest.

Photo: By Simone Ramella – flickr.com / Wikimedia Commons CC BY-SA 2.0
Trade union protesters demonstrate near the Colosseum on Nov. 21, 2014, against then-Prime Minister Matteo Renzi’s labor market reforms.

Yet Varricchio points out that the Five Star Movement is different from other European populist parties in that it attracts a wide spectrum of disgruntled voters from both the left and right, robbing it of a coherent policy platform.

Despite being widely seen as inexperienced and all over the map ideologically, experts warn that Five Star’s appeal — like that of other “fringe” movements that sprung up as vehicles for protest — should not be underestimated.

As such, the defeat of Renzi’s reforms can be seen in a positive or negative light, depending on how you view the populist uprising.

On the one hand, the constitutional changes would’ve strengthened the prime minister’s powers. That would’ve benefited Renzi — assuming he was the one in power. If, however, Five Star had won an upset victory (something Americans are very familiar with), populists would’ve taken charge.

On the other hand, rejecting the changes will force Italy’s parties to cobble together broad-based coalition governments that, in theory, are better able to block insurgent movements like Five Star from amassing too much power, thereby thwarting radical change. On the flip side, sticking with the status quo entrenches Italy’s perennial gridlock.

That’s why Simon Nixon of the Wall Street Journal predicts that Italy will simply continue to muddle along.

“The country’s primary challenge for 20 years, since it first locked itself into the discipline of eurozone membership, is that it has struggled to adapt to the challenges of operating in an open, global economy,” he wrote in a Jan. 29 article, citing factors such inflexible labor rules, pervasive corruption and inefficient rule of law.

He warns that “without far-reaching reform, Italy will struggle to break out of its low-growth trap, raising the risk that popular frustration against the current establishment and mainstream parties will continue to build, culminating in a populist victory.

“If the price of keeping out the populists is a return to weak and unstable governments unable to deliver reforms, then the establishment’s victory may be pyrrhic,” he concluded. “Muddling though can be both a blessing and a curse.”

The ambassador insists that the current government — made up of respected technocrats, including Prime Minister Paolo Gentiloni, a close Renzi ally — will do more than just muddle through.

“This is not a caretaker government,” Varricchio told us. “When the president in parliament entrusted Mr. Gentiloni with the responsibility to form the government, he gave him wide authority to go ahead with [economic] reforms while at the same time managing the many challenges of our time because … we cannot simply transform the political arena into a sort of think tank discussing ideas. The government has to take responsibility and move forward with this ambitious program of reforms.”

He added: “It is not a matter of mechanics, it’s not a matter of legal provisions, but of political will.”

Political Will and Prized Cheese

Varricchio, a career diplomat who has advised Italy’s leaders since joining the Foreign Service in 1986, says the same philosophy applies to the EU: “Institutions are strong when there is a political will,” he said. “As long as national governments entrust European institutions with the authority to actually take decisions for a broader good [while] trying to find a compromise among … different countries, this is where Europe works. But as always in politics, as always in democracy, there is a need for reaching out and for finding a common ground.”

Photo: © European Union 2014 – European Parliament
Italian Prime Minister Matteo Renzi speaks before the European Union Parliament on July 2, 2014, about the priorities of Italy’s EU presidency.

But common ground and trust are in short supply when it comes to bureaucrats in Brussels — or Washington, D.C., for that matter.

A litany of grievances has ignited a populist fever on both sides of the Atlantic. Just as many Americans worry about immigrants taking away jobs or bringing in crime, many Europeans fear the unprecedented influx of refugees they’ve absorbed from war-torn, poverty-stricken nations such as Syria and Afghanistan is threatening their safety, social services and way of life. Whether it’s concerns over free trade, open borders or more liberal social mores, there seems to be a growing disconnect between alienated voters and the ruling elite they say ignores them.

Varricchio said he understands the forces that propelled Donald Trump to the White House, because they mirror the discontent that has been simmering in Europe for years.

“I’ve seen these voices loud and clear — people’s anger, people’s fear, people casting doubts — and I was not surprised at all because being a European, I’ve seen this coming,” he said. “Irrespective of the specific issue at stake, there is something that is going on related to a world where you have global connections, global trade. There is an issue of preserving identities — a national identity, cultural identity, religious identity, a cheese identity. You want to preserve your cheese!” he said with a wry smile.

Cheese, in fact, is no laughing matter in Europe. Local farmers are fiercely protective of their feta, parmesan and other national cheeses — and wary of EU regulations and large corporations eating into their profits.

Whether Denmark, Greece or France, “you have European countries particularly close to us where cheese is very serious,” Varricchio said. “So that’s why … it is important that both elected officials and those who represent institutions like myself listen and not be deaf to what is happening.”

So how can EU institutions better listen to citizens who say the bloc is infringing on their sovereignty, and their cherished dairy products?

Varricchio said the EU should embrace a concept pioneered by the Catholic Church known as “subsidiarity,” which “means taking at the higher level only those decisions that can’t be taken at the lower level.”

In other words, “political decisions should be taken at the local level whenever possible, while … leaving to Brussels only the major regulatory norms, which is a dynamic not different from the one that you are having here,” the ambassador explained, noting that many Americans prefer that the federal government stay out of local affairs. “What is happening inside the Beltway is happening for us in Brussels. So if you are a citizen in Oklahoma or Arkansas or Oregon, you want to have decisions affecting your community taken at the lower level.”

 At the same time, he warned against politicians using Brussels as a convenient scapegoat “for whatever is not effective and whatever is politically sensitive or difficult.”

But the ambassador suggested that the EU does deserve some blame for fanning the flames of populist resentment. In particular, by pushing austerity to respond to the 2008 recession instead of pro-growth policies, Varricchio said the EU aggravated a vicious cycle of higher taxes and painful spending cuts that stunted the recovery of indebted economies like Italy, Greece and Spain.

“It is very, very telling the comparison between what happened here in this country after the Great Recession and what happened in Europe. The United States was able to grow at a much steadier and higher percentage than Europe, [which] was very much austerity-prone and cautious,” Varricchio said. “Now of course this is becoming politically crucial, so this is what our government is advocating: growth, growth, growth.”

Asked if there’s been a shift toward more growth and less austerity in Brussels — and, by extension, Berlin — the ambassador offered another wry smile.

“Let’s hope so.”

Dangers Beneath the Surface

While the eurozone crisis has faded from the headlines, many analysts fear that Italy, Europe’s third-largest economy, is a ticking time bomb. The country’s debt stands at over 130 percent of GDP. Youth unemployment is a staggering 40 percent. Growth is essentially flat. And its banks are saddled with debt.

Photo: By Governo Italiano (Note legali) – Prima pagina del portale www.governo.it / Wikimedia Commons CC BY 3.0
Matteo Renzi, who resigned after his referendum on proposed constitutional changes failed, right, congratulates his ally, Prime Minister Paolo Gentiloni, during Gentiloni’s swearing-in ceremony last December.

To reassure jittery investors, the Italian government recently approved a €20 billion bailout of Banca Monte dei Paschi di Siena, the world’s oldest bank and a “national asset,” as the ambassador called it.

Varricchio also cited the words of European Central Bank President Mario Draghi that the ECB is “ready to do whatever it takes to preserve the euro.”

Varricchio concedes that Italy’s banks are burdened with bad loans that are a byproduct of the 2008 crisis. “But all in all, the Italian economic banking center is very, very, very solid. The more the economy starts growing steadily again, the easier it will be to solve the remaining problems.”

And one of the most pressing problems is youth unemployment, which Varricchio said “is poisoning the very fabric of our society.”

“We are able to cope with it because we are a very integrated society. We have families, so we have a natural safety net, but the country is suffering because of this.”

At the same time, Varricchio points out that Italy is Europe’s second-largest manufacturer, with a thriving export sector underpinned by many small- and medium-size enterprises. “So we have this tremendous tradition and ingenuity of our entrepreneurs.”

To foster this “dynamism,” he says Italy must cut red tape, increase investment in education and vocational training and keep markets open to allow unfettered trade.

“We have to travel with lighter luggage in a way. We carry very, very heavy luggage,” he said.

Italy’s finances have been strained by another heavy burden: tens of thousands of desperate refugees washing up on its shores.

Like Greece, Italy has borne the brunt of Europe’s refugee crisis. “By the end of last year, we received more than 180,000 people,” Varricchio said, noting that the Italian Coast Guard has rescued thousands from ramshackle boats that often capsize at sea. “But this is where the problem starts because we cannot go on accepting all these people without any eventual solution to the problem.”

The ambassador said the solution is twofold: One, authorities must manage the immediate emergency at sea, where thousands have died; target the human traffickers who prey on refugees; process claims; and resettle legitimate asylum-seekers while sending back economic migrants. Second, they need to address the root causes that are sending people on the risky journey across the Mediterranean in the first place.

That means tackling violence in nations like Syria, Iraq and Afghanistan, he said, and poverty in African nations like Eritrea — “so this is a long-term process.”

On both fronts, however, Varricchio said the EU has abandoned front-line countries like Italy and Greece. Asked if the bloc has delivered the assistance it’s promised, both to help Italy’s beleaguered Coast Guard and to resettle refugees among member states, the ambassador tersely replied: “No.”

Photo: By Alvesgaspar – Own work / Wikimedia Commons CC BY-SA 4.0
The Altare della Patria in Rome, home of Italy’s Tomb of the Unknown Soldier, was built as a monument to King Vittorio Emanuele II to commemorate the unification of Italy.

As for the EU pact with Turkey that significantly cut down on the number of refugees entering Greece, Varricchio said refugees simply switched from the Aegean route to the more perilous trek between Libya and Sicily to reach Europe.

In response, Italy reached a deal last month to curb the flow of migrants from Libya, offering the war-torn nation cash, training and equipment to secure its vast desert border and catch smuggler boats in its waters. Human rights groups have criticized the pact for sending refugees back to lawless Libya, where they are often herded into detention camps rife with abuse.

Varricchio said he understands these concerns but argues that Europe needs to prevent migrants from embarking on the dangerous journey for two reasons: “first humanitarian, so you save their lives, because the number of drowned people is appalling … and also because if you stop them, you can avoid this arrival into Europe, which has become such a political nightmare.”

‘All In This Together’

The subject of refugees became a political nightmare for Donald Trump with the botched rollout of his travel ban, although the resilient president has since moved on to other controversies.

Despite the backlash over Trump’s unorthodox style and divisive policies, America’s new president is very much at home with the populist earthquake that has rattled the EU. He’s casually shrugged off the value of the transatlantic alliance that has served as a pillar of global stability; praised Brexit and speculated that other EU member states would be better off leaving the bloc as well; cozied up to Russia despite its provocations in Ukraine and Eastern Europe; put a major transatlantic trade accord on ice; and repeatedly denigrated NATO as obsolete and its members as free-loaders.

Europe’s only consolation may be that the U.S. president may be too busy picking fights with Mexico and China to notice the EU, even though the bloc of 500 million consumers is America’s largest trading partner.

But those deeply embedded interests are exactly why Varricchio says he isn’t worried about Trump’s isolationist rhetoric.

“For the last 60 years, the United States has always been the staunchest supporter of integration. I have no doubt that this is going to stay. It is in the interest of both Europe and America that the two sides of the Atlantic are strongly united,” he said.

“The same goes for NATO. When [Trump] says that NATO is obsolete, this is a political expression,” the ambassador told us. “Obsolete means that we have to adjust, update, we have to have a new strategy — and this is exactly what we are trying to do, so I tend to consider this expression as a sort of wake-up call that we all have to answer.”

Varricchio said Italy is doing just that, serving as a “strong player” in NATO’s collective security. “We have our military forces engaged in Afghanistan and Iraq, in the Balkans, so we do our share.”

As for Trump’s insistence that NATO members boost defense spending to 2 percent of GDP, Varricchio said the issue is complicated.

While Italy’s defense spending comes to about 1.2 percent of its GDP, it subscribes to another important target: devoting 20 percent of its security expenditure to upgrading its defense industry and advanced systems. But here, the country runs into EU rules against exceeding certain budgetary limits to ensure fiscal discipline among member states.

“And this drives us back to the issue of austerity. So we have to be able to persuade Brussels and [Berlin] that austerity is something that is not in our broader interest because the more we invest in our security, the more we are able to increase our ability to face our common challenges,” Varricchio said. “I’m confident that also because of these warnings coming from [the U.S.], this process will go forward.”

Asked if he could convey one message to President Trump about Europe, the ambassador gave a Twitter-ready response: “We are all in this together.”

About the Author

Anna Gawel (@diplomatnews) is the managing editor of The Washington Diplomat.