The nationalist Third Republic

The EU blinked and accepted the Left-Right nationalist alliance rather than risk a La Lega government.

Italy’s new populist leaders commemorated the founding of the Italian republic by attending a pomp-filled military parade Saturday — and then promised to get to work creating jobs and expelling migrants.

“The free ride is over,” League leader Matteo Salvini, Italy’s new interior minister, warned migrants at a rally in northern Italy. “It’s time to pack your bags.”

The pledge of mass deportations to come was a reminder that Italy has a staunchly anti-immigrant, right-wing party in its governing coalition — and that the European Union will face a whole new partner governing its fourth-largest economy.

Earlier, Salvini joined Premier Giuseppe Conte and the rest of the newly sworn-in Cabinet to view the Republic Day parade. Italy’s aeronautic acrobatic squad flew low and loud over downtown Rome trailing smoke in the red, white and green of the Italian flag.

The national pride on display is a feature of every Republic Day, but it took on a particular significance this year after Italy on Friday ended three months of political and financial turmoil and swore in a government whose populist and euroskeptic leanings have alarmed Europe.

Conte, a law professor plucked from relative obscurity to head an unlikely governing alliance of the anti-establishment 5-Star Movement and League, said the celebrations Saturday transcended all the tensions of recent days.

“It’s the celebration for all of us, of our republic,” he said.

Conte’s Cabinet was sworn in after a last-minute deal averted the threat of a new election that could have turned into a referendum on whether Italy stayed with the shared European euro currency. The political stability relieved financial markets on Friday but Italy’s European neighbors continued to express concerns about the euroskeptic bent and the heavy spending agenda of Italy’s new government…. The political upheaval that has created western Europe’s first populist government this week has been dubbed the start of Italy’s Third Republic.

I think I would have preferred another election, but the fact that Salvini is still the interior minister is the most important thing. And it wasn’t exactly as if the Italians took the EU’s objection to Paolo Savona lying down, instead, they took trolling to new heights by naming him to the Ministry for European Affairs in place of the Treasury. The thing is, it took a while for Italy to get into the Euro, and they’re not going to extricate the nation from it overnight. The most important thing is for the new government to deliver on the promised deportations. As long as it does that, La Lega will be in a stronger position in the next election cycle.

And, of course, this being Italy, the chances are about 85 percent that the new government won’t last a year anyhow. It is tremendously encouraging, however, to see that the eurocrats are so desperate to avoid a popular referendum on the Euro. They know they would lose, because most Italians would prefer to go back to the Lira, despite what the new Minister of the Treasury says.

Italy’s new finance minister Giovanni Tria is a political economy professor whose policies dovetail with those of the far-right League party, with one crucial exception: he wants Italy to stick with the euro. This is an important distinction from Paolo Savona who was previously touted for the job and whose hostility to Italy’s eurozone membership turned out to be a dealbreaker for Italy’s president. But although Tria wrote on the Formiche analysis website that it was “not in our interests to leave”, he also said that the eurozone needed to be reformed. “Before saying why I think that we must reply ‘no’ to the question of a euro exit, I would start from the question ‘what are the conditions for the euro’s survival’, so we can move in the opposite direction of any breakup,” Tria said.

Except that’s not quite what he said.

“Tra tutti i partiti italiani, sia all’opposizione che al governo, non ho sentito una sola forza politica che dica che voglia uscire dall’euro. Questa è la verità: il mondo deve prenderne atto” 

“Throughout all the Italian parties, including the opposition and the government, I have not heard a single political force that says it wants to exit the Euro. This is the truth: the world must take note.”

I found this statement more significant.  Sembra di essere tornati ai tempi in cui Maynard Keynes criticava i vecchi ortodossi.

“It feels as if we have returned to the times in which John Maynard Keynes criticized the old orthodoxy.”

In other words, no major political party has made it an official policy… yet. My take is that he’s warning the Eurocrats that either they shape up fast or Italy ships out. And I am quite sure that he knows they have no intention whatsoever of shaping up. And, as I’ve already mentioned, Italy intends to deal with the migrant situation first. If the EU gets in the way of that, then Italy will leave both the Euro and the European Union.