Italy's Prime Minister Giuseppe Conte at the World Economic Forum in Davos, Switzerland, on January 23 2019. Picture: AFP/FABRICE COFFRINI
Italy's Prime Minister Giuseppe Conte at the World Economic Forum in Davos, Switzerland, on January 23 2019. Picture: AFP/FABRICE COFFRINI

Rome/Berlin/Amsterdam — Italy has been picking public fights with France and Germany. In Davos, its government got a dressing down from European colleagues.

Many did not take kindly to Prime Minister Giuseppe Conte’s attack on Brussels and its institutions from the podium at the World Economic Forum (WEF), especially after his deputies took turns at making barbed comments about Italy’s closest trading partners.

EU’s commissioner for economic affairs Pierre Moscovici had this to say to Italy’s ruling coalition: “Changing Europe is one thing, destroying Europe is another. And that’s the difference between reform and populism, between pro-Europeanism and nationalism.”

Italy seems to be on a campaign footing, which helps explain the ratcheting up of anti-EU rhetoric that is straight out of the populist playbook. Its ruling coalition has an anti-establishment and an anti-immigration party that are increasingly at odds, jostling for the upper hand and possibly seeking to engineer early elections, as the country flirts with recession.

Its finances also are not in great shape and the government will struggle to deliver on ambitious spending promises based on unrealistic economic predictions of growth.

Dutch Prime Minister Mark Rutte could barely suppress his annoyance at Italy being let off the hook with its budget violations. “People start to ask me questions — if Italy, and in the past France, can get away with not implementing what they have collectively agreed,” he told a panel. “Why should we?”

The EU’s executive arm decided against launching a disciplinary procedure against Italy in December after the country’s populist government pledged to rein in some of its spending plans. While the Italians put off some of their more ambitious projects, the commission turned a blind eye to their failure to lower the structural deficit this year.

German Chancellor Angela Merkel’s successor as leader of the Christian Democratic Union party was asked n a Bloomberg Television interview if she thought Italy could “break” the bloc. Annegret Kramp-Karrenbauer used a German expression to say Italy was going to be “a hard nut to crack”.

Italy, she said, is “certainly a double challenge, given that in the government we have populist forces from the right and from the other political side.”

With Richard Bravo

Bloomberg