Opinion: EU panic over Italian populism only exacerbates tension

Italy's populist government did not just fall from the sky — it was elected. And the incoming leaders could prove to be an explosive force for the European Union. DW's Bernd Riegert asks: What's next?

Italians fundamentally distrust their politicians, to whom many disparagingly refer as "the caste." It's a familiar story: Italy's politicians rarely fulfill the promises they make during election campaigns. Once they are in power, it's often about what's doing best for themselves. Those have long been the iron laws of political life in Italy. Now, populists from the left and far right are set to take power.

They are promising historic change, a revolution, to address the concerns of their citizens. Are Italy's iron laws of politics about to be rewritten? Or will this new, inexperienced, but deeply self-confident coalition soon forget the ambitious and somewhat dangerous goals of their governing agreement and instead focus on preserving their own power?

It might sound like a strange thing to say, but it would be in the interests of Italy and the European Union if the same old mechanisms maintain their grip on politics — and if the nationalist revolution fails.

The puppet prime minister?

The no-name man tapped to be prime minister, 54-year-old law professor Giuseppe Conte, will hopefully manage to blunt the populists' most radical ideas. If he cannot find compromises between the extremes within his coalition, he could very well soon face replacement.

Bernd Riegert is DW's correspondent in Brussels

The leaders of the two parties making up the coalition — Luigi Di Maio of the protest Five Star Movement and Matteo Salvini of the nationalist League — have made big promises to their respective bases: Lower taxes, improved social benefits, earlier retirement, a more favorable relationship with the EU, economic growth and less bureaucracy. The strong-headed Di Maio and Salvini are likely to try and use Conte as a puppet for their own populist power games.

Hollow phrases no substitute for policy

"Italy first" is the hollow rallying cry for the new leaders in Rome. That stance has left officials from the EU shuddering. They have argued that if every nation tries to go its own way, that does not leave much room for solidary among citizens in the bloc. "Nobody needs to fear us," The League's Salvini has said. But we should fear them. Brussels is allowed to be concerned, because the populists set to take over the EU's third-largest economy could rattle the euro zone with irresponsible financial policies.

Read more: Italy: The populist odd couple preparing for government

"Italy is not Greece," the new coalition in Rome has said. That's true. Italy is a founding EU nation and much larger than Greece, but it also has massive amounts of debt. To bail out an economy as large as Italy's in a way that is similar to what happened in Greece would be practically impossible.

The populists made out the euro currency, and its German fiscal guardians, to be the source of all evil during their campaign. It cannot be ruled out that they are actively trying to damage the economy in an effort to destroy the euro. Italy could introduce its own currency overnight and leave the eurozone.

The financial markets are simply ignoring the populists. The European Central Bank (ECB), with its flood of capital, is helping to keep Italy and other struggling countries afloat. It begs the question: How much longer can that last? If the ECB raised interest rates, it could quickly get ugly for Italy, to say the least.

Panic won't help

When it comes to immigration and asylum policy, the nationlist League threatens to torpedo all of Brussels' decisions. A sensible system of distributing migrants throughout the EU seems now like a distant dream. Close the borders and kick the foreigners out — that's about all The League seems to have in the way of proposals.

The vow of its leader Salvini rings hollow: Italy will change, and it will try to change the EU with it. How far can or should we go when it comes to seeking compromise with these new radicals?

Nonetheless, the EU should not be nervous. Heated or panicked attacks, like those from France's finance minister over the weekend, will have the opposite of their intended effect. Italy does not respond happily to criticism from abroad — and that doesn't just go for the populists. This, too, is one of the iron laws of Italian politics.

Italy's populist government: Key players

Conte: Novice at the helm

Giuseppe Conte, a little-known law professor with no political experience, was picked by the League and 5-Star Movement (M5S) as their candidate for prime minister. He was forced to temporarily give up his leadership bid after the parties' cabinet selection was initially blocked. However, after the two parties struck a deal with President Sergio Mattarella, Conte was eventually sworn in on June 1.

Italy's populist government: Key players

Mattarella: President with the final say

President Sergio Mattarella faced calls for his impeachment after he prevented the populist alliance from taking office. He singled out its choice for finance minister, Paolo Savona, warning that an openly euroskeptic minister in that position went against the parties' joint promise to simply "change Europe for the better." After the parties agreed to replace Savona, Mattarella gave the go-ahead.

Italy's populist government: Key players

Di Maio: Anti-austerity advocate

M5S chief Luigi Di Maio secured his party 32 percent of the vote in the March election. With the populist M5S-League coalition in power, Di Maio assumed the role of joint deputy prime minister and took over the economic development portfolio. The M5S leader has come under fire for his anti-immigration rhetoric, including calling rescue missions to save migrants from drowning a "sea-taxi service."

Italy's populist government: Key players

Salvini: 'The Captain'

Matteo Salvini is the leader of the anti-immigrant, euroskeptic League, which won 17 percent of the vote in the March election. A former MEP, he and his party have no experience in governing. Salvini has taken on the position of interior minister within Conte's Cabinet. Known for his hostile rhetoric toward immigrants and the EU, Salvini once described the euro a "crime against humanity."

Italy's populist government: Key players

Savona: Anti-euro radical

Paola Savona, initially tipped to lead the Finance Ministry, has called the euro a "German cage" and said that Italy needs a plan to leave the single currency. The 81-year-old's stance won him the backing of most Italian lawmakers but that wasn't enough to stop his appointment being vetoed. In his place steps Giovanni Tria, an economics professor without any previous government experience.

Italy's populist government: Key players

Cottarelli: Temporary caretaker

Carlo Cottarelli was set to become Italy's caretaker prime minster after the M5S-League alliance failed to have its controversial cabinet picks approved. The former IMF economist's time in the spotlight was short-lived, however. Political uncertainty in Italy rocked Europe's financial markets and prompted Mattarella to swiftly renegotiate and approve Salvini and Di Maio's governing coalition.

Italy's populist government: Key players

Berlusconi: Vanquished enabler

Silvio Berlusconi (right) and his Forza Italia entered a four-party electoral alliance including League in the March election that secured the bloc 37 percent. Berlusconi is now upset at his right-wing ally Salvini after the League leader moved to work with M5S. Berlusconi has said he would act as a "reasonable and scrutinizing opposition."