The Italian coalition government is fighting two battles, one in Brussels and one in Rome.
The leader of the centre-left Democratic Party (PD) MS5) Nicola Zingaretti and the leader of the Five Star Movement (MS5), Luigi Di Maio, clashed on Monday over citizenship law. The issue of migration is deeply divisive for the two coalition partners.
The centre-left wants the introduction of an ‘ius soli’ regime (law of the soil), that would give second-generation migrants an entitlement to citizenship. Echoing Greek legislation, Zingaretti proposes an automatic entitlement to citizenship after five years of schooling in Italy.
But M5S leader and Foreign Minister Luigi Di Maio dismissed the idea, expressing confidence that “on real issues” the coalition government is cooperating smoothly.
Polling suggests that MS5 is sliding on the polls, even though it has been able to push through flagship measures such as a guaranteed minimum income (“citizens’ income”), curbs on temporary contracts, and a cut in the number of parliamentarians.
Meanwhile, the whole government is facing a potential standoff with Brussels.
The 2019 Italian budget was rejected by the European Commission with the Vice President of the European Commission, Valdis Dombrovskis, calling for “a considerable correction.”
The budget foregoes a planned hike in value-added tax, introduces a reduction on the payroll tax, and creates space for a modest surge in public investment. This mildly expansionary budget could see the country’s deficit increase, undermining the objective of reigning over the138% debt-to-GDP ratio.
Last week, Italy submitted a revised budget plan to the European Commission, which was founded on a series of optimistic projections about tax receipts, including a promise to go after tax evasion. In what could very well be an election year, the Italian government is unlikely to introduce fiscal consolidation measures.