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How Italy's Next Government Will Shake Up the EU

undefined and Director of Analysis at RANE

Adriano Bosoni

Director of Analysis at RANE, Stratfor

May 24, 2018 | 07:00 GMT

The Italian and EU flags hang side by side from the facade of a government building in Italy. Italy's leaders have long championed the cause of European integration, but the country's incoming government has promised to try to reverse the process.

(ARSENIE KRASNEVSKY/Shutterstock)

Highlights

Internal disagreements, along with Italy's bureaucracy, vested interests and parallel centers of power, could reduce the next Italian government's room for action on its ambitious agenda.
Though the Five Star Movement and the League parties have pledged to keep Italy in the eurozone, they will use the threat of unilateral action, such as ignoring EU fiscal rules, to negotiate softer deficit targets with Brussels.
Renegotiating the European Union's economic governance will be almost impossible, but Brussels will have to decide whether to reach a compromise with Italy, at the cost of alienating Northern Europe, or to hold its ground, increasing the risk of unilateral action from Rome.

To implement its agenda, the Italian government will have to overcome formidable challenges, not least of all the differences between the ruling coalition's constituent parties. But even if it doesn't bring about the end of the eurozone, Italy's new administration will force EU governments and institutions to make difficult choices....

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