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Lessons from Italy’s election, part five: The non-populist parties must adapt or die

The motif of monkeys who “hear no evil, see no evil, speak no evil” is often used to depict a person or group that walls itself off from reality. European “ins” have been like those monkeys with regards to populist parties and impulses for quite some time. If Italy needs saving from the populist parties that swept this month’s elections, Italy’s “in” parties must drop this approach and begin to truly address the problems their country faces.

First among these is migration. As Peter Franklin’s recent article notes, Italy is inevitably going to be under pressure so long as EU countries to its north profess to want to resettle Middle Eastern refugees. Italian ships and troops will have to be deployed to keep them out; Italian resources will have to be deployed to process and house those that get through; and inevitably Italy will have to house more than its fair share of refugees when their northern neighbors change their minds about how many refugees they will settle. Nothing short of a clean break with refugee resettlement policy will be necessary. It may need to resemble Australia’s “stop the boats” policy that removes all refugees to offshore island detention centres with the goal of returning the vast majority to their homeland, will satisfy the Italian public.

Migration within the EU, however, is an even greater challenge. As I noted in part four, life in Italy remains comparatively superior to that in the poor countries of southeastern Europe even as its own economy stagnates. The right of free migration cannot mean that Italians must continuously compete with increasing numbers of migrants when opportunities are scarce. A serious attempt to recapture public sentiment, therefore, requires a strong stance to reform the right of internal migration.

So long as Italy’s “in” parties care more about what Brussels thinks of them than what Neapolitans or Venetians do they will remain out of power.

This could take the form of limiting that right only to regions or countries where economic conditions are already promising. Ireland has avoided any anti-migrant populist backlash despite massive migration. About 12% of Irish residents are non-Irish. Contrary to popular belief, many of these are Eastern European. There are more Poles (about 122,000) in Ireland than there are Britons, for example. The next three largest nationalities of Irish immigrants are Lithuanians, Romanians, and Latvians. The fact that the Irish economy has largely grown quickly enough to accommodate these migrants surely is one reason we don’t have Gaelic versions of Donald Trump or Matteo Salvini. Italian “ins” who genuinely want to save Europe have to insist that the right to free migration cannot come at the expense of worse outcomes for citizens. “More Europe” must also mean “Italians First”.

Ultimately, Italian “ins” will need to reform the economy to really regain public credibility. That cannot, however, mean cutting benefits and hiking taxes to reduce the persistent Italian budget deficit. All Italian populist parties ran on platforms that rejected this approach, and it is clear that the Italian people believe they have sacrificed for long enough. Instead, Italian “ins” should be looking for creative ways to boost Italian growth. That could involve pushing the EU to permit economies with persistently low growth to cut their own trade deals with other countries. It could also involve slashing corporate taxes to Irish levels to invite foreign investment. Ireland’s corporate tax rate is only 12.5% compared to Italy’s 24% (an additional 3.9% is levied at the local level). Other EU countries won’t like this, but the alternatives – Italian default on its debt, departure from the Euro or worse – may make it look like the best option.

Italian “in” parties can only recover if they reinvent themselves as agents of change. Italians decisively voted for change, and so long as the “in” parties care more about what Brussels thinks of them than what Neapolitans or Venetians do they will remain out of power. The populist moment is real and the writing is on the wall for the “ins”: adapt or die.