Analysis: Italy’s foreign policy set to stay course

Italy's new prime minister, Giorgia Meloni reacts during the cabinet minister bell handover ceremony at Palazzo Chigi in Rome on Oct 23, 2022. (ANDREAS SOLARO / AFP)

ROME – With Italy's newly installed government facing pressing domestic priorities, analysts do not expect immediate changes to the country's foreign policy line.

Observers told Xinhua that Giorgia Meloni, who was sworn in as the country's prime minister on Saturday, will likely have her hands too full with challenges like rising prices, energy supplies, slowing economic growth or overall political stability.

"There are some Euroskeptic and pro-Russian elements in her coalition, but I expect Meloni to be cautious when it comes to foreign policy," Riccardo Puglisi, a professor of public economics at the University of Pavia, told Xinhua. "There are only so many issues a new government can take on."

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Gian Franco Gallo, a political affairs analyst with ABS Securities in Milan, agreed.

"The new Meloni government has to prove it can make progress on key domestic topics like energy prices and jobs," he told Xinhua. "If it doesn't, that will create division within her coalition and if that happens then all the government's priorities will be out of reach."

The new Meloni government has to prove it can make progress on key domestic topics like energy prices and jobs… If it doesn't, that will create division within her coalition and if that happens then all the government's priorities will be out of reach

Gian Franco Gallo, Analyst with ABS Securities

The conflict between Russia and Ukraine has had a dramatic impact on Italy, which at the start had been the Europe Union's (EU) second-largest importer of Russian natural gas.

The conflict's impact on energy prices and supply chains has had a ripple effect across Italy's economy to the point that the International Monetary Fund (IMF) this month slashed its economic growth estimates for the country to a negative 0.2 percent next year compared to estimates of a positive 0.7 percent growth from July and 1.7 percent from April.

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Alfred Kammer, director of the European Department at the IMF, told Italian newspaper La Repubblica that the new government should largely follow through on the energy policies set by the previous Mario Draghi-led government, which were based on finding new, non-Russian sources of energy and developing renewable sources.

In his interview with the newspaper, he said that Meloni should use public finance to soften the economic blow from high energy prices felt by energy-intensive industries and poor families.

"We need targeted and temporary aid only for the people most impacted by the energy and economic crisis," Kammer said.

But experts noted that Meloni might be limited on that front by a campaign pledge not to champion economic policies that would add to Italy's already massive public debt.

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According to the country's National Institute of Statistics (ISTAT), the government debt to gross domestic product (GDP) ratio was 150.3 percent at the end of 2021, one of the highest rates in the world among industrialized economies.

source https://eastmud.com/latest-news/analysis-italys-foreign-policy-set-to-stay-course/