The elections of 25 September are approaching and polls give the center-right coalition a conspicuous advantage to obtain a majority in Parliament. The right-wing coalition is composed
Meloni’s Brothers of Italy, Salvini’s League and Berlusconi’s Forza Italia. Fratelli d’Italia, which is the most radical of the coalition parties, is the one that seems destined to garner the most support.
Although theItalexit seems very unlikely, there are still some looming risks that could come from a right-wing government. “It is not yet clear whether a right-wing government will maintain a constructive approach with the EU, both in relation to the upcoming fiscal consolidation and the PNRR, of which Italy is the main beneficiary”notes a report by Oxford Economics drafted by the Chief Italian Economist, Nicola Nobile.
Tensions with Europe, but no tears
Second Noble maintaining the status quo remains the simplest option – Nobile asserts -. The next government may try to depart from current commitments, but we expect Italy to back down after some market turbulence and perhaps some small concessions from Brussels, as happened with previous “unorthodox” governments. Nobile mentions the case of 2018 when the Lega-M5S-led government finally accepted the EU’s demands.
“For now, we still think that Italy will maintain access to the full funds of the PNRR, even if there could be delays in the disbursements”.
The economist at Oxford Economics is skeptical about the possibility that the next government will implement the reforms necessary to address Italy’s structural issues. “A right-wing government, with the Brothers of Italy as its main party, could take a highly protectionist stance rather than encourage much needed foreign investment. This, combined with a nationalist vision of the stateit means that we do not see any positive impact from such a government on the side of the economy ”.
The knot of the balance of accounts
Then there is the crux of fiscal policy. “Recent center-right governments have not paid particular attention to fiscal sustainability. There is a clear possibility that this will also happen this time, despite some factors, such as eligibility for the ECB’s anti-spread mechanism and the choice of the Minister of Economy, could reduce this risk “, reads the Oxford Ecnomics report. .