When Giuseppe Conte dials into a meeting of European Union leaders Thursday, it’s a safe bet he’ll be keeping a close eye on what’s happening back home.
The Italian prime minister has set himself a high bar for success in European negotiations over the post-pandemic response to the crisis. He has insisted that any recovery plan include the creation of so-called eurobonds — joint debt backed by the entire eurozone and the use of which is vehemently opposed by the Netherlands, Germany and Austria.
With pressure building domestically as Italy enters its third month of coronavirus crisis, Conte needs a win if he’s to contain surging Euroskepticism and fend off opposition parties eagerly awaiting the moment they can declare he failed to muster enough support from Italy’s European partners.
Once dismissed as a nobody, a placeholder set atop a governing coalition of Euroskeptics and crazies, Conte has evolved in his nearly two years in office into something closer to a statesman.
As corona casualties begin to dip for the first time since the start of the crisis, he has so far pulled off an impressive balancing act: Appreciated back home for how he has handled the crisis, he’s also respected on the international stage as someone who brings stability and order to the Italian maelstrom.
Whether he’s able to maintain that balance — between an ever more furious and frightened Italian public and fiscally conservative European leaders leery of getting pulled deeper into economic union — will depend greatly on the outcome of the discussion that EU leaders will have during Thursday’s meeting of the European Council.
Puppet?
The stakes are high for a man former Belgian Prime Minister-turned-MEP Guy Verhofstadt once dismissed as a “puppet.”
Italy, one of the countries hardest hit by the coronavirus, is the eurozone’s third-largest economy, but it’s also heavily indebted, limiting its ability to respond to the crisis.
According to estimates from the International Monetary Fund, the Italian economy is expected to plunge by 9 percent this year, compared with a eurozone average of 7.5 percent. One of the reasons for the devastation is the epidemic’s impact in the highly productive region of Lombardy, which accounts for about 22 percent
Conte has generally received high marks for his handling of the epidemic. More than 60 percent of Italians support his performance during the crisis, according to an Ipsos survey. He “has shown out-of-the-ordinary mediation skills,” according to Fabio Martini, a political columnist at La Stampa.
But that could easily change as post-pandemic economic reality begins to bite.
Conte has already received fire from some quarters for the way he seized new powers during the emergency. Sabino Cassese, one of the country’s most important jurists, has criticized the government for issuing “incomprehensible norms, badly written and contradictory.”
With talk turning to how to exit the lockdown, Italy’s entrepreneurs are up in arms because they want to resume production. The Bank of Italy has calculated that every week in which lockdown measures “of this scope” continue will cost Italy 0.5 percent of its GDP.
“Our competitors in Europe continue to produce in many sectors,” said Carlo Bonomi, the newly elected president of Confindustria, the Italian business lobby, on Thursday. Time, he stressed, “is the real enemy of the country.”
Conte’s political opponents are also starting to up the pressure. “We were the first ones to be hit by the pandemic, and I’m afraid that we’ll be the last ones to exit from it,” said Marco Zanni, an MEP with the far-right League party who is the chairman of the Identity and Democracy group in the European Parliament.
What support Conte is able to secure from Brussels and other EU countries could determine Italy’s ability to bounce back from the crisis, and with it his government’s chances of surviving.
Conte governs with the support of a fractious coalition of the center-left Democratic Party and the anti-establishment 5Star Movement, to whom he owes his political career.
After months of public bickering, the two sides have largely managed to work together during the first months of the crisis. “But in May, attention will shift from the emergency to the economic problems,” said Rado Fonda, director of research at the polling firm SWG. “It’s likely the government will suffer from it.”
Plucked from obscurity
Conte was born in Volturara Appula, a small village near Foggia in the Puglia region of southern Italy. The son of a local official and an elementary school teacher, he moved to Rome to study law at La Sapienza University.
He was working as a law professor, with postings in Florence and Rome and with no experience in electoral politics, when he was plucked from near-obscurity in 2018 to serve as prime minister.
An election earlier that year had resulted in an uncomfortable coalition between the League and 5Stars, and the two parties needed a compromise candidate.
While he was not known by the wider public, he was well-connected in academic circles, the upper-middle-class Roman establishment and the Catholic political hierarchy, according to Giulio Sapelli, an economist whose name was also floated to lead the country at the time.
It was connections like those that led to him having his name included by the 5Stars on a list of possible ministers ahead of the election.
Key in Conte’s formation was his association with Villa Nazareth, a small Catholic college with close ties to Vatican luminaries and the Italian political class, including President Sergio Mattarella and former Prime Minister and European Commission President Romano Prodi. After becoming a university professor, Conte was appointed to the college’s scientific committee.
Conte, said Sapelli, “played a role, with many other professors from the Catholic world” in a deal between the Vatican and Beijing over the appointment of Catholic bishops in China.
‘Angela, don’t worry’
Conte is not a member of a political party, which means he doesn’t belong to the pan-European political groups that run the show in Brussels: the conservative European People’s Party, the Socialists and the liberals.
Given his lack of experience, and his position at the top of a chimeric and often squabbling coalition, it’s perhaps no surprise his first steps on the international stage were awkward ones.
At his global debut, a G7 meeting in Canada in June 2018, he left fellow leaders unimpressed because of “his lack of preparation,” according to an EU diplomat.
Then, during his first appearance at the European Council a few weeks later, he showed up threatening to veto an agreement on migration.
EU leaders, forced to work overnight to come up with a new accord, produced an agreement that was so vague it proved unworkable. “He was so uncollaborative, so against any kind of European spirit, that it was pretty remarkable,” said the EU diplomat.
At his global debut, a G7 meeting in Canada in June 2018, Giuseppe Conte left fellow leaders unimpressed | Pool photo by Ian Langsdon/EPA-EFE
After those initial missteps, however, Conte seemed to grow into the job, learning how to deal with the EU and his fellow leaders — especially as his political situation back home evolved.
During his time at the top of a Euroskeptic government, Conte made an effort to show he was a moderate, not a hardliner. In a video taken in Davos and published in February 2019, Conte was caught telling Angela Merkel he had things under control, despite the League’s militant line on migration.
“Angela, don’t worry, I’m very determined,” he told the German chancellor.
A turning point came last July, when representatives of the 5Stars in the European Parliament voted in favor of Ursula von der Leyen as European Commission president. It was a decision vociferously opposed by the League, and shortly after the government collapsed.
When Conte arrived at a G7 meeting in Biarritz in August 2019, amid political chaos back home, many leaders welcomed him warmly, asking whether he expected to be able to stay on as Italian leader.
Conte’s future could very easily be decided by the outcome of the negotiations over the next steps in the European response to the virus.
“Starting to look good for the highly respected Prime Minister of the Italian Republic, Giuseppe Conte… A very talented man who will hopefully remain Prime Minister!” tweeted U.S. President Donald Trump. Later that month, Conte confirmed he would stay on as prime minister, after cobbling together a new governing coalition of the Democratic Party and the 5Stars.
With time, he has become “cooperative, trustworthy and appreciated,” said the EU diplomat.
When he started “expectations were very, very low, and he has been sometimes emotional and loud, but it seems he has now learned how to deal with other leaders,” said an EU official.
At a meeting of the European Council in February, where leaders discussed the EU budget, “there was a moment when (French President Emmanuel) Macron was in a room with some others like Merkel and (Spanish Prime Minister Pedro) Sánchez,” said a senior EU diplomat. “Macron insisted on waiting for Conte before starting” out of respect for him and for Italy, the diplomat added. “It’s not something I would have expected until a few months before.”
Politically toxic
Conte will have to use every trick he has learned if he’s to emerge victorious from negotiations on the use of eurobonds.
In advance of Thursday’s summit, which will be held by teleconference, the Italian leader insisted that the EU risks collapse if his proposal is not adopted and threatened to veto any Council conclusion that does not include some form of shared debt.
Italian officials have also sought to ramp up the pressure on the EU by highlighting shows of assistance from Moscow and Beijing, including Russian military vehicles delivering emergency supplies to northern Italy and planeloads of medical equipment arriving from China.
Conte’s future, as well as Italy’s, could very easily be decided by the outcome of the negotiations over the next steps in the European response to the virus. Conte has so far painted himself in a corner by describing anything short of joint EU bonds as insufficient.
The European Central Bank stepped in last month, announcing a €750 billion asset purchase to ease pressure on financial markets. Meanwhile EU finance ministers agreed to suspend the fiscal limits countries are required to adhere to under the EU treaties.
They also pledged to deploy a package of rescue measures worth €540 billion, but the effort relies on the EU bailout program known as the European Stability Mechanism (ESM), an instrument about which Conte has said he’s “skeptical.” The mechanism is politically toxic in Italy, where it has become associated with the painful austerity that followed rescue operations in countries like Greece, Spain and Ireland.
As the crisis — and the debate over what to do about it — drags on, Italians are increasingly turning their anger toward the EU.
Support for the EU in Italy has collapsed from 42 percent in September to 27 percent this month according to SWG, the Italian polling firm. Meanwhile, the percentage of Italians who favor leaving the EU rose from 21 percent in October 2018 to 35 percent this month, prompting League leader Matteo Salvini to call for a referendum on the issue.
Conte “cornered himself, because he said that he will never sign off on the ESM, but he’ll be forced to do it because otherwise the government will fall,” said Pietro Senaldi, editor-in-chief of right-wing newspaper Libero.
The most likely outcome will be a classic EU fudge. While Conte has maintained his call for eurobonds, he has been careful not to precisely define what they are. Speaking in parliament Tuesday, he showed some pragmatism, stressing that “we are interested in bringing home a result, we are not interested in this moment to highlight our primacy.”
A proposal by the European Commission to issue debt as part of its seven-year budget might be something Conte could sell to the Italians as a sign of success.
“It has become a battle of words,” said Carlo Cottarelli, director of the Observatory on the Italian Public Accounts at the Catholic University of Milan, noting that securities issued by the ESM are in effect a sort of eurobond.
The trouble for Conte, however, is that it’s the very word — eurobond — that is politically problematic for his counterparts in Northern Europe.
The result, complained an EU diplomat, is that the fight over the wording could slow or reduce the aid Italy so desperately needs.
Conte “equates eurobonds to solidarity,” a third EU diplomat said. But “by pressing on eurobonds, he makes a deal more difficult.”