The Italian coalition government of Mario Draghi has become the latest political victim of the cost-of-living crisis. The government’s collapse at the end of July triggered a fall on the stock exchange and a rise at one stage to up to 3.7% in the ‘yield’, the difference that Italy has to pay to service its debt compared to Germany: 2.5% is considered the ‘danger zone’. This has raised fears amongst the European capitalist classes that economic and political instability in Italy could trigger another sovereign debt and Euro crisis, ten years after the last one following the 2007-2008 global financial crash, which opened up social and political crises throughout Europe and potentially could have blown the Euro apart.
The trigger for the government’s collapse was the populist Five Star Movement (M5S) voting against an economic package that would have given some aid to those struggling with rising prices, arguing that the help was not enough. This was total political opportunism. In 2018, at the time of the last general election, M5S emerged as the biggest party with 33% of the vote. Now, according to the polls, it will struggle to get 12% in the elections scheduled for 25 September. A recent split in its parliamentary ranks, the latest of many, resulted in its former leader Luigi di Maio breaking away and taking 60 MPs with him. Now the party is desperately looking to try and channel anger and frustration at rocketing inflation to rebuild its social and electoral base. Given its record in the three coalition governments since 2018 this tactic is doomed to failure.
Read more