Italy, co-founder of European integration

Avrai tu l’universo, resta l’Italia a me.

(You may have the universe, if I may have Italy)

Giuseppe Verdi, Italian Opera composer, 1813 – 1901

Italy, the country that captures the imagination of people both within and outside Europe. Known for its natural beauty, rich culture, unique works of art, world-famous cuisine and stunning scenery, admired for the achievements of the Roman Empire and being cradle of the Renaissance.

Italy's turbulent history has seen both glorious and dark times. After the fall of the vast Roman Empire in the fifth century AD, Italy fragmented into a patchwork of small states and city-states. Nevertheless, a new period of prosperity emerged between the 14th century, known as the Renaissance. Harking back to the classical culture of the Greeks and Romans, the Renaissance brought about major changes in art, literature, and science. A ‘rebirth’ that spread throughout Europe. Only in the second half of the 19th century did the Risorgimento, the unification, lead to the Kingdom of Italy and lay the foundation for a modern nation-state. In the early twentieth century however, Italy transformed into a fascist dictatorship under Benito Mussolini. His authoritarian rule led to a one-party system, strict censorship, and a repressive police state. Nationalist propaganda and widespread repression and violence went hand in hand. Mussolini sided with Nazi Germany and participated in World War II alongside Hitler. The Italian army proved poorly organized and suffered numerous defeats. In 1943, Mussolini was deposed, and before the end of the war, in April 1945, he was executed by Italian partisans while attempting to escape to Switzerland.

The fascist regime left behind a devastated legacy. While democracy was restored, postwar Italy faced enormous challenges. The country struggled with an unresolved fascist past and a communist party with a large following - so much even that the party's influence by Italy's Western allies during the Cold War led to distrust and huge concern. Large numbers of migrants moved from the impoverished south to the north, where industrialization in the 1950s led to an unprecedented economic boom, but also caused numerous social problems. However, it was precisely these difficult economic, political, and social circumstances that prompted Italy to become one of the six countries that founded the European Coal and Steel Community (ECSC) in 1951. Given the economic reconstruction, the country needed access to essential raw materials and political stability through cooperation and integration with other European countries. In 1957, Italy also signed the Treaties of Rome, which paved the way for the creation of the European Economic Community (EEC) and Euratom, paving the way for a common market characterized by the free movement of goods, people, capital and services. Italy, together with France and Germany, thus formed the leading group of European integration and the EU that emerged from it.

Italy, 75 years later, remains a vital member of the European Union. With approximately 12% of the total GDP of all EU countries, Italy is one of the largest European economies. With 73 seats in the European Parliament, numerous Italians in top EU-positions, and as a member of the G7, Italy's participation in and influence on political decision-making is considerable. However, there are some drawbacks. Despite it’s relatively large economy Italy is the EU's smallest net contributor. Its economy is plagued by structural problems, such as a public debt exceeding 135% of GDP, low productivity, too little innovation and modernization, high (youth) unemployment, and, still, a huge wealth gap between the north and the south. Italy's competitiveness is too low, mainly because many companies remain too small to be internationally relevant. To keep its successful sectors competitive in the global market, Italy needs to implement drastic reforms.

One would think that, given these challenges, Italy would still need the EU, just as much as the country needed European cooperation through the ECSC after the war. EU membership has brought Italy many benefits. It has provided a larger sales market to the industrial north, and the south has benefited from various subsidies. The financial crisis did hit Italy hard, partly due to the country's large debt position. EU mechanisms like the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM), as well as lower interest rates and cheap loans by the European Central Bank (ECB) supported Italy coping with the financial crisis. About ten years later, when the COVID-19 pandemic broke out, the European Union even provided substantial financial aid to Italy. The EU approved state aid measures helping Italian companies cover liquidity needs and fixed costs to survive. Also, the EU’s Recovery and Resilience Plan, funds to support economic post-COVID recovery and future resilience, concerned direct assistance to Italy.

Although Italy has been actively involved in the European integration process from the outset and has demonstrably benefited the country, the countervailing forces are strong. Italians, like residents of many other member states, are increasingly critical of the EU. Under Prime Minister Giorgia Meloni, the political debate in Italy about the EU has noticeably hardened. In line with her party's right-wing populist course, she frequently emphasizes national sovereignty and national interests, citing the will of the people. Within Meloni's party, Fratelli d'Italia (Brothers of Italy), a strongly nationalist party that is not entirely free from fascist tendencies, sharp criticism of the EU is often voiced, with labels such as a "bureaucratic and hyper centralized superstate." The conservative nationalist party primarily believes that Brussels imposes too many rules and that Rome should have more control over, for example, its own budget. Matteo Salvini's Lega (formerly Lega Nord) is even more radically nationalistic and Eurosceptic. Salvini has a history of very close ties to the Kremlin and is suspected of receiving election campaign funds from Russia. The third party on the right, Forza Italia, is actually more moderate than the Fratelli d'Italia and the Lega. On the left side of the political spectrum, the parties are pro-EU. The center-left Partito Democratico, for example, continues to support greater European integration and cooperation, despite significant electoral losses. As in many European countries, in Italy voter dissatisfaction with migration policy is leading to anti-EU sentiment and support for populist right-wing parties. Meloni is pushing for a much stricter immigration policy and is demanding more control from Europe in this area. Nevertheless, Meloni does not want an ‘Italexit’, although she has hinted at it in the past. She is well aware of the impact the lack of EU funds and a free European market would have on Italy's weak economic position, although this does not prevent her from engaging in confrontation on numerous policy areas.

Despite Italy's long record of European integration and cooperation, the political reality in the country, as in many member states, is that national sovereignty is considered more important than (further) European unification. However understandable the underlying reasons for this political reality may be, the pursuit of greater national sovereignty is in no way in the interest of European citizens, even though many inhabitants of European nation states seem to think so. Nationalist sentiments lead to division and weakness—a trend applauded by Beijing, Moscow, and Washington. Presidents Xi Jinping, Putin, and Trump view the EU as an opponent, a militarily and geopolitically insignificant player, but an economic power bloc they would like to see disintegrate. Their administrations invest considerable energy in pitting European countries against each other, ranging from subversion to political and economic blackmail. Leaders of nationalist parties often believe that bilateral ties with the US, Russia, or China (in Victor Orbán's case, all three) are more beneficial than EU membership. Brexit has clearly demonstrated the opposite; the estimated shrinkage of the United Kingdom’s economy is 140 billion Euro so far (already costing every Brit about 850 euros a year), the expected trade relationship with the US has come to nothing, and Trump's tariffs are hitting the UK just as hard as they are hitting other countries - differences in percentages are merely symbolic and can be adjusted at any time. The more united the EU is, the stronger Europe is in defending the interests of the European member states. Meloni's Italy seems to understand this better than the English Conservatives. Meloni primarily focuses on dialogue between the US and Europe, although the question remains whether dialogue is even possible with a president who claims that "the EU was founded to screw the US."

Contrary to Trump's claims, the EU was founded to promote peace and prosperity on the European continent, and the union has been very successful in this regard. At the same time, the EU is a community of values that is desperately needed to defend Europe’s rule-based order. Europe is increasingly finding itself alone in the struggle between the rule of law and autocracy, now that the US no longer shares the classic values of the liberal world order: freedom, equality, and democracy. It’s essential that Italy, cofounder of the European integration, stays on board and continues to contribute to the further unification of Europe as they have been doing for decades.