This morning’s key headlines from GenerationalDynamics.com
- Italy threatens EU with immigration fight to get budget concessions
- Spain becomes the major destination for migrants from Africa
Italy threatens EU with immigration fight to get budget concessions
Migrants disembark at a beach in Tarifa, southern Spain, after crossing the Strait of Gibraltar (Spiegel)
Readers may recall that when Italy held nationwide elections in March, the elections failed to produce a majority party. Two particularly bitter rivals were the left-wing Five Star Movement (M5S) that got 32% of the vote, and the right-wing La Lega (The League) that got 17% of the vote.
Incredibly, these two parties got together and formed a governing coalition. They’re far apart on many issues, but they do share similar attitudes on three issues: a nationalistic anti-euro attitude, a xenophobic anti-immigrant attitude, and a complete lack of fiscal discipline. Much to everyone’s surprise, they formed a governing coalition based on these three principles.
This new governing coalition announced a list of policy proposals, including a completely delusional list of economic proposals.
Italian debt stands at around €2.3 trillion ($2.7 trillion), or 133% of gross domestic product (GDP), the worst in Europe. The new government does have a way of reducing the debt: spend a lot more money, and drastically reduce taxes. (As I wrote at the time, I wish I could tell you that this is a joke, but it isn’t.)
Specifically, the government would like to do the following right away:
- Sharply cut taxes to a flat tax of 15-20%.
- Give everyone a guaranteed free basic income of €780 ($922) per month.
- Increase pension benefits by substantially reducing the retirement age.
As wonderful as these proposals are, they have a serious problem: Implementing them would violate EU rules by pushing Italy’s annual deficit above 3% of GDP.
Italy’s deputy prime minister and M5S leader Luigi Di Maio has a solution: The EU should change the rules, so that Italy can spend as much as it wants on these social problems. According to Di Maio:
“It is possible to introduce both this measure and a flat tax and to respect European Union deficit limits, because this is a structural reform for Italy. The European Union must listen to us in this phase when we want to protect citizens facing a social emergency.”
He added that his request to change the EU deficit limit rules comes with a threat:
“We want to discuss these reforms with the European Union to obtain the margin for maneuver that will allow us to implement those measures. That means doing the same as we did on immigration. There shouldn’t be a clash with the EU, but a frank discussion.”
In the case of immigration, the “frank discussion” was accompanied by an order closing all Italian ports to immigrant rescue ships. This forced the EU government in Brussels to adopt new rules for immigrants, giving Italy at least a portion of what it was demanding. Interior Minister Matteo Salvini, leader of La Lega, claimed that his government had gotten 70% of what it wanted from the EU.
So Di Maio is demanding that the EU change its deficit rules, or Italy will “do the same as we did on immigration.” What that means remains to be seen.
It should be noted that Di Maio’s delusional plans and demands are not being met with unanimous agreement even within Italy’s government. Prime minister Giuseppe Conte is insisting on a “realistic” budget, and that the new measures will be introduced gradually. Bloomberg and Reuters and Bloomberg and the Guardian (London)
Spain becomes the major destination for migrants from Africa
At first, the major route for migrants into Europe was through Turkey into Greece. When the EU closed the so-called “Balkan route” for migrants, and then signed the EU-Turkey migrant deal in 2016, the number of migrants reaching Greece fell sharply.
Then the major route moved westward, with migrants crossing the Mediterranean Sea from Libya to Africa. However, in 2017 Italy paid money to Libyan warlords and the Libyan government to prevent migrants from crossing.
So the preferred route to Europe has moved westward again. The number of migrants crossing the Mediterranean from Africa to Europe has fallen drastically from previous years, but now the major route is to cross the strait between Morocco and Spain.
- European markets in turmoil over Italy’s unbridled spending proposals (23-May-2018)
- Bank run worsens Italy’s banking crisis (28-Dec-2016)
- Italy’s migration policy opens up battle lines within the EU (17-Jun-2018)
- Spain’s offer to take in Aquarius migrants is rejected as dangerous to migrants (12-Jun-2018)
- EU migrant crisis moves to Italy as Austria begins closing border (13-Apr-2016)
- France, Italy have bitter feud over migrants as quota system collapses (16-Jun-2015)
KEYS: Generational Dynamics, Italy, Five-Star Movement, M5S, Luigi Di Maio, La Lega, The (Northern) League, Matteo Salvini. Giuseppe Conte, Turkey, Greece, Balkan Route, Libya, Spain, Morocco, Gibraltar
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