ZEW Economists on the Italian ElectionComment
“The ECB Has Given Europe’s Populists a Free Pass”
The right-wing alliance led by Fratelli d’Italia has won a majority in Italy’s parliamentary election. ZEW economists from Italy and Germany assess the results as follows:
“The government under Mario Draghi has initiated important reform processes in the areas of pensions, bureaucracy reduction, the judiciary and competition. He has also enforced a targeted use of EU funds from the pandemic recovery plan for important infrastructure. If the new government deviates from this path, it will face a severe economic setback,” says Adriano de Leverano, PhD, ZEW expert on public procurement issues.
Professor Friedrich Heinemann, fiscal expert at ZEW, draws attention to the ECB’s responsibility: “The election victory of the right is particularly delicate for the ECB. With its promise to curb spreads in the eurozone without any preconditions, it basically gave Europe’s populists a free pass. It must now actually withdraw this free pass. In doing so, however, it risks making itself the political watchdog of election results. It is becoming increasingly clear that with its massive purchases of government bonds, the ECB has taken on a role for which it has no mandate and no legitimacy.”