Economic Stagnation and the Rise of Giorgia Meloni

Economic Stagnation and the Rise of Giorgia Meloni

The Italian far right has capitalized on the country’s profound economic dysfunction. But Meloni’s government will only bring more hardship to Italian workers.

Giorgia Meloni speaks to the media at her party's electoral headquarters in Rome, Italy, on September 26, 2022. (Marco Ravagli/Future Publishing via Getty Images)

Many people around the world have been shell-shocked by the victory of Giorgia Meloni, the leader of the far-right party Fratelli d’Italia (Brothers of Italy), in the September 25 parliamentary elections. They ask how such an extreme figure, whose party directly descends from the neo-fascist Movimento Sociale Italiano, could form and lead a government in a Western democracy. Some have tried to explain it as an expression of cultural regression and the growing dominance of anti-liberal viewpoints, racism, bigotry, and sexism, especially in a conservative country like Italy. These factors all played a role in Fratelli d’Italia’s win. But such reactionary stances find their most conducive audience in times of profound economic and social hardship—precisely the conditions faced by Italy, which has suffered prolonged stagnation over the course of decades.

The Italian economy has been through decades of stagnation during which its GDP has barely grown. As economists Philipp Heimberger and Nikolaus Krowall have highlighted, around the year 2000 the standard of living in Italy was comparable to that of Germany and France. Today, Italy’s per capita income levels are 20 percent below Germany’s. The introduction of the euro helped to send Italy into a prolonged stagnation; its economy has been severely damaged by the major economic downturns of the past fifteen years. While Italy did not experience a housing bubble and collapse like other Western countries did, it still feels the effects of the sovereign bond crisis that exploded in 2011 (as do Greece, Spain, Ireland, and Portugal—dubbed, with Italy, as the PIIGS).

The 2010s were dominated by austerity policies that deprived the country of necessary investments and severely weakened an already under-resourced state. And the COVID-19 crisis led to Italy experiencing one of the deepest drops in GDP in 2020 across the West. While the economy regained strength the following year, COVID-19 restrictions heavily hit the tourism and hospitality sector. (Meloni tapped into the anger of workers and business owners affected by pandemic policies like lockdowns, quarantines, and mask mandates.) Hopes of a more progressive economic policy emerged under the tenure of Five Star Movement Prime Minister Giuseppe Conte (2018–2021) and with the creation of an EU pandemic recovery fund in 2020. But Conte’s successor, the technocrat Mario Draghi, implemented a fiscal reform that benefited higher income brackets while doing little for those facing major economic difficulties.

This economic disarray has had terrible consequences for workers. Italy is the only European country where wages have lost value in real terms since the 1990s. On average, Italians earn 10,000 euros less per year than the French, and 15,000 less than Germans. This difference has only widened since the pandemic. Italy’s low wages are a direct consequence of the precarization of the labor market and the surrender of trade unions, which have too often heeded calls to put the national interest before that of workers.

In recent decades, Italy has also experienced a decline in the quality of public services, in environmental conditions, and in self-reported life satisfaction. While foreigners still fantasize about life in the bel paese, Italians have been abandoning the country in droves. It has been estimated that in the last decade a million Italians have emigrated, especially those with higher education degrees. The country also has one of the lowest fertility rates in the world. To a large extent this is the outcome of economic conditions that make it difficult for young Italians to form a family, but the right blames dropping birth rates on a supposed attack on tradition and Christianity.

This dismal economic and social picture goes a long way to explain the rise of Meloni. Her politics may not be as extreme or dangerous as those of her fascist forerunners a century ago, but they are informed by a similar impression of societal decline, which animates her nationalistic stances and her attacks against various scapegoats, like migrants and LGBTQ people. What Meloni clearly lacks, however, is any serious solution to the economic problems Italy is facing. On the cultural front she is likely to undertake a war on civil rights like those seen under Donald Trump in the United States and Viktor Orbán in Hungary—all while resolutely defending the interests of business and the wealthy against workers’ and citizens’ demands for redistribution.

While Fratelli d’Italia has cross-class support, its base skews toward the self-employed and business owners, 37 percent and 30 percent of whom voted for the party respectively, according to the polling firm Demopolis, and lower than average support from workers. (Fratelli won 26 percent of the vote overall.) The party performed particularly well in Northern and Central Italy, while obtaining only 20 percent of the vote in Southern Italy, which is more economically disadvantaged. The party did best among those between thirty-five and sixty-four years old, with lower support among younger voters, who have disproportionately borne the burden of Italy’s economic stagnation.

The most salient example of Meloni’s brutal economic agenda is her intention to eliminate the Reddito di Cittadinanza (citizen wage), a miserly poverty subsidy that provides families an average of 567 euros a month and is widely resented by business owners who argue that it discourages people from working. The center-right coalition also supports implementing a regressive flat tax of 23 percent at every income level. While the final version of this proposal is likely to be more limited, the Meloni government is clearly on course to further exacerbate inequalities in what is already one of the most unequal countries in the EU.

These policies in favor of the rich go a long way to explain why many Italian elites are turning a blind eye to Meloni’s vicious cultural conservatism. They see her as the best guarantee for the stability of the economic system. Indeed, she is already ditching her war-like declarations against globalists, finance, and the EU, and promises she will be a responsible and prudent steward of the economy. She is currently having discussions with sitting Prime Minister Draghi to ensure a smooth transition.

Italy is a perfect case study of how the new far right, far from being a force aiming at upsetting the neoliberal world, in fact constitutes a last line of defense for a capitalist class that, amid profound economic and geopolitical crisis, believes its profits depend more on suppressing workers’ rights and wages than on creating new products and exploiting new markets. Meloni’s government will bring more hardship to Italian workers and ordinary citizens, who have time and again been blamed for their country’s decline while being forced to foot the bill. They may have to wait a long while for a new opportunity to change their country’s direction.

Paolo Gerbaudo is a sociologist and political theorist at Scuola Normale Superiore in Florence and King’s College London. He is the author of The Great Recoil: Politics After Populism and Pandemic.