In just over a decade, Europe has faced major difficulties. The financial crisis of 2007-2008, the migration crisis of 2013-2015, and the Covid-19 pandemic, which began in 2020 and continues through today, impacted the continent’s domestic agenda and affected the European Union’s reputation as a regional and multilateral actor. Italy, one of the EU’s founding members, continues to experience the fallout from these calamitous events, which have upended the country’s political balance, economic outlook, and social fabric.
A continent under siege: Europe’s reaction to a decade of crisis
The international financial crisis required a coordinated multilateral response. For Europe, this meant owning up to its responsibility for the situation and putting forth unprecedented financial and economic measures. Beyond the economic changes, however, the financial crisis affected European politics, deepening the North-South divide on key topics for the EU, fiscal rules among them.
An initial lack of strategy in managing new arrivals during the 2013-2015 migration crisis caused a political leadership upheaval and intensified the conflict between the continent’s northern and southern countries. This led to serious challenges about the way the public discourse and debate on this issue was run, and eventually brought about the gradual rise of Euroscepticism and Euro-criticism.
Then the Covid-19 virus hit and confirmed how connectivity can be a great asset but also an Achilles heel. As we enter the third year of the pandemic, Europe is slowly seeing the light at the end of the tunnel, thanks to a massive vaccination campaign. However, EU leadership is now dealing with the social and economic long-term consequences of this unprecedented event. One measure the EU has taken to strengthen economic recovery is the stimulus package known as Next Generation EU (NGEU), which will inject EUR750 billion into the EU’s budget between 2021-2027. NGEU is both a unique opportunity and a serious stress test for Europe and its member states, and its success or failure will majorly impact the future of the EU as a sovereign actor in the political, economic, and financial realm.
Decision 2021: Italians choose their future
These three crises impacted not only the EU but each of its member states. With a population of 60 million people, Italy has the fourth largest economy in the EU, accounting for 17% of the union’s overall industrial production. Italy is also a member of the G7 and the G20, which it chaired in 2021 for the first time since the forum was launched in 1999.
However, Italy is also among the most impacted by the pandemic, with more than 150,000 deaths as of February 2022, the second-most in the EU behind the United Kingdom. The country will receive almost EUR209 billion in loans and investments, about 27.8% of the total NGEU funds, and will thus play a determining role in the use of the recovery fund, whose success or failure will likely shape European integration for years to come.
The pandemic and its effect on healthcare and economic policy laid the basis for the formation, in February 2021, of the Mario Draghi government, the result of a broad coalition formed by the Democratic Party (Partito Democratico), the Five Star Movement (Movimento 5 Stelle), the League (Lega, known until 2018 as Lega Nord or Northern League), Forza Italia, and two smaller parties, Italia Viva and Article One (Articolo Uno). The only non-member of this coalition is Brothers of Italy (Fratelli d’Italia), whose leader Giorgia Meloni decided to stay with the opposition.
In recent years, Italy has become quite familiar with such grand coalitions, made up of the largest political parties and those with strongly opposing political ideologies who unite to form a government. In 2013, Enrico Letta formed a coalition when no major party was able to get a governing majority. The trend was interrupted in June of 2018 when Giuseppe Conte was chosen as an independent to lead a government built on an agreement between the Five Star Movement and the League, two political allies. In September of 2019, Conte II was formed after an internal reshuffle in which the League quit the government and the Democratic Party joined.
Draghi’s government, which is scheduled to remain in power until the 2023 political elections, reunites political parties with very different domestic and foreign policy orientations and priorities: the Democratic Party, a member of the Party of European Socialists, has a strong progressive orientation but is currently dealing with internal divisions; the Five Star Movement is in the middle of a loud public discussion around its leadership; the Forza Italia is currently at its lowest level of public opinion support; and the League, headed by Matteo Salvini, who since the 2019 European elections has lost almost 20% of his party’s public support, currently polls at 16% in terms of public approval.
Prime Minister Draghi worked in the European Central Bank, where he was respected during his long career, a part of which was spent at the forefront of the financial crisis management. His government faces a very ambitious yet delicate task in managing the Covid-19 pandemic from both a healthcare and an economic recovery point of view. With 88.98% of the over-12 population vaccinated (Italy ranks fourth after Portugal, Malta and Spain), the healthcare dimension of the crisis is almost under control. The economic recovery process, however, is posing challenges to Draghi, especially in the mediation between political parties’ domestic priorities and expectations.
Since Draghi was appointed in February 2021, he has made it clear that his mandate is to overcome the pandemic and simultaneously reform the country. In his first speech as Prime Minister to the Senate, he quoted the Count of Cavour, one of the fathers of Italian unification, clearly convinced that his timely policy changes do not undermine the authorities but, on the contrary, reinforce them. The domestic agenda of Draghi’s government seems to be heading in this direction. The massive plan of reforms and investments, implemented under the NGEU umbrella, will target employment for youth and women, the health sector, education, infrastructure and other public projects, support to the Southern regions, as well as changes to the fiscal, justice, and public administration fields.
The evolution of party politics in Italy
While Draghi’s policies are bold, the sectors his government is targeting have been bones of contention in Italian politics for some time. In recent campaigns, public debt management, the integration of technology into the economy, and the transition to green energy have arisen as additional political issues.
Before the 2013 political elections, the differences between the North and South of Italy mostly dominated the public discourse; this division was the main plank in the Northern League’s platform in opposition to the more progressive Democratic Party. Although those elections did not have a clear winner in terms of votes, they represented a turning point for Italian politics, with the Five Star Movement entering the Parliament for the first time since its formation in 2009. In taking advantage of the longstanding political opposition between the Northern League, Forza Italia, and the Democratic Party, the Five Star Movement morphed into a political movement that more closely represented Italian citizens’ disappointment and dissatisfaction with Italian politics and public policy.
The founders and leaders of the Five Star Movement scrapped old politics in the name of a new way of managing the public good and interests, thus moving the public conversation away from talk of the North-South divide. The Movement had to wait for another five years to be officially part of a government, however, they used this window of time to push forward their vision of Italy and of the role the country should play in Europe. In the run-up to the 2019 campaign, the Movement drove the debate, forcing their political opponents to adapt in order to not miss out on new political opportunities.
Looking at the situation now, some factors immediately stand out with regards to how Italian domestic politics have evolved. The Five Star Movement, driven by the ambition to stay in power beyond the 2023 elections, has put aside its suggestion of aligning Italy with China in the name of a pro-European and a pro-Atlantic approach, causing a realignment within the party’s original group of supporters and voters. The League has gradually abandoned its strong pro-North stance in favour of a more Southern-oriented strategy with concrete results; the Party managed to secure a good number of votes in those regions of the centre of Italy, where years ago it could have never been able to get any. The Democratic Party, strongly anchored in its European and transatlantic roots, has attempted to balance its different internal groupings, while Forza Italia, which is politically and financially dependent on its founder and leader, Silvio Berlusconi, is at its lowest in terms of popular support.
A possibility for stability
Two additional elements provide more nuance to how the Italian domestic politics will move forward and integrate the priority of the implementation of EU recovery funds.
The first one is the recent re-election of the Head of State, which nowadays should be considered as a clear advantage for Italy. President Sergio Mattarella was re-elected on 29 January 2022 for his second seven-year mandate with the support of almost all Italian political parties apart from Brothers of Italy. The role of the Head of State in Italy is not comparable to, for example, the French President’s in terms of functions and prerogatives. He (a woman has never been chosen for this job) represents the country’s unity, is a guarantor of constitutionality, calls for elections, signs law, and heads the military forces. In recent times, however, the position of the Head of State has assumed a more assertive role, not only in domestic politics, but also on foreign issues. Starting with the former President, Giorgio Napolitano, who was in office between 2006 and 2015, the Head of State has tried to strengthen Italy’s typically pro-European and pro-Atlanticism stances. Considering how critical the next couple of years will be, Mattarella’s re-election, along with Prime Minister Draghi being in place until the 2023 elections, should allow Italy to experience a degree of political stability and continuity it lacked in the past.
The second element is the approved 2020 reform of the Parliament, which will reduce the number of members of the Chamber of Deputies from 630 to 400 and of the Senate from 315 to 200. The political effect of this reform is of major significance: political parties risk having their representation strongly reduced, and many of those MPs sitting in the Parliament today will not be able to be re-elected in 2023. This law has the potential to influence the course of domestic politics, with Italian political parties trying to anticipate trends, creating new alliances, and capitalizing on new political opportunities to stay in office. The political parties that are currently struggling in terms of electoral support will also benefit from an effective implementation of NGEU funds, which will aid the country’s recovery and evolution.
A final third challenge needs to be taken into consideration. Apart from the recovery funds and pandemic management, this government has the important task of strengthening the role Italy can play at the EU and in supporting the EU as a geopolitical actor and interlocutor. To achieve this, Italy, as with any other actor who decides to be politically proactive, needs to look in its own backyard and set certain priorities and objectives. Since he came to office, Draghi has put Europeanism and transatlantic relations back at the core of Italian foreign policy, believing that this is the path to make Italy stronger. This is the political mantra that has driven Draghi’s foreign policy and which has represented a reshaped approach compared with prior Italian foreign policy.
During the Berlusconi era, Russia represented a privileged partner for Italy, with economic-financial and energy relations at the core of the Rome-Moscow dialogue. Starting from Mario Monti’s technocratic government and through the two cabinets led by Democratic Party leaders, namely Enrico Letta, Matteo Renzi, and Paolo Gentiloni, the strong orientation towards Russia has been rebalanced with a major attention on transatlantic relations and EU priorities.
When Conte became Prime Minister in 2018, Italy entered into a new phase of its foreign policy with each political party belonging to the two government coalitions and putting forward their own foreign policy orientations: the League towards Russia; the Five Star Movement towards China; the Democratic Party toward Brussels and Washington.
Under Draghi’s leadership, the country has entered a new phase characterized by the promotion of Italian and European interests within a broader multilateral scenario, especially on issues such as the environment, health, technology, and infrastructure. The 2021 G20 presidency and the COP26 co-chair perfectly fit this strategy, but also marked a U-turn in foreign policy whereby Russia and China are now multilateral interlocutors for selected crisis management as well as economic partners with common interests and opportunities. The Russian invasion of Ukraine has completely overturned EU policy towards Russia and has put some member states such as Italy, strongly linked to Moscow through energy dependence, in an unprecedented position. Italy is now completely aligned with the EU in the condemnation of Russia’s aggression and in the implementation of hard sanctions.
The collaboration with other member states remains vital in this approach. With France’s Emmanuel Macron soon heading to the polls and with German Chancellor Olaf Scholz still trying to forge his foreign policy imprint, Draghi has a unique opportunity to play a proactive role in the Franco-German-Italian triangle in order to strengthen the EU.
To conclude, domestic and foreign policy should always develop in an aligned fashion. In a more and more interconnected global order like the one we are experiencing now, the national and foreign agenda should always support and complement each other and contribute to each other as they are strictly linked and dependent on each other.
Foreign policy choices usually have consequences on domestic development, with the Russia-Ukraine conflict serving as the most recent example. Choosing Russia as a key energy partner for years has put Italy and Europe in a very delicate conundrum, as they are energy dependent on a country they now wish to sanction. Supporting a stronger, more strategic, more sovereign, and more vocal EU should be in the interests of Italy, not only for the future of the European project, but also for Italy’s stability and for the role that Italy wants to play in the years to come.
 Teresa Coratella. 2021. “The League of Leagues: Pan-European cooperation against the EU,” European Council on Foreign Relations. https://ecfr.eu/article/commentary_league_of_leagues_pan_european_cooperation_against_eu/
 Worldometers. 2022. https://www.worldometers.info/coronavirus/#countries
 Alberto Magnani. 2021. “Next Generation EU, cos’è e come funziona,” Il Sole 24 Ore. https://www.ilsole24ore.com/art/next-generation-eu-cos-e-e-perche-l-europa-deve-correre-fondi-la-ripresa-covid-ADlKpzMB
 Teresa Coratella and Arturo Varvelli. 2021. “Rome’s moment: Draghi, multilateralism, and Italy’s new strategy,” European Council on Foreign Relations. https://ecfr.eu/publication/romes-moment-draghi-multilateralism-and-italys-new-strategy/
 Report Vaccini Anti Covid19. 2022. https://www.governo.it/it/cscovid19/report-vaccini/
 Coronavirus vaccination coverage in Europe: Live data tracker. 2022. Politico. https://www.politico.eu/article/coronavirus-vaccination-europe-live-data-tracker-coverage/