Will Italy destabalise the EU?
For those who don't know, Italy looks like it will have an unusual coalition govt made up of populists.
Here is how the seats in the Italian Parliament get distributed:
The Five Star Movement and The League propose to make a coalition where they slash taxes dramatically, raise the minimum wage and ignore the EU's rules about whether they are able to bail out their banks.
Their policies are actually good - cutting taxes will cut tax evasion. Make it easy and cheap for people to do the legal thing, and they will. The EU rules for the bailout of banks, where they insist on a "bail-in" by stealing customers deposits, are also daft.
Italy poses a different threat from Brexit. Brexit is about law-abiding Britain leaving the EU because it thinks the EU's rules are mad and taking it's money and economy with it
This Italian development is about Italy saying, "We are just going to ignore rules we don't like, what are you going to do about it?" And the answer is nothing, there is nothing the EU can do. Which will lead to other countries just ignorring EU rules when they feel like it too.
That poses a question for countries outside the EU. Is it worth making trade deals with a zone where nobody abides by agreements anyway?
Italy likely needs another european country to back them up when they start pushing back. Perhaps Greece. I understand that sanctions by the EU need unanimity so a veto from Greece would help Italy.
The problem is that when Greece needed help Italy didn't reach out - so why would they help now (unless doing so meant the eurozone rules would be loosened for them too).
The EU appears to be embattled on all fronts. Brexit, Italy, Greece, migrants. At some point, something will give.
Yes. It's actually amazing they have managed to carry on as long as they have. I put it down to the risk aversion of the European population.