Euroskeptics Get Key Italy Lawmaker Posts in Further Sign to EU
Euroskeptics Are Named to Key Posts in Italian Parliament
(Bloomberg) -- Two euroskeptic lawmakers from the government coalition partner League were named to head key economic committees in Italy’s parliament, while the party’s chief threatened more trouble for the European Union.
Economist Alberto Bagnai, author of two books advocating the dismantling of the European monetary union, was selected on Thursday as head of the Italian Senate finance committee. Claudio Borghi, a top economic adviser for the League, was named the head of the budget committee in the lower house.
The appointments are likely to add weight to the new government’s promise to challenge the EU in key areas.
However, the new finance minister, Giovanni Tria, has pledged that the country remains committed to the euro single currency. “This is an old story -- in the government the euro is not up for debate,” Tria told reporters on Thursday, arriving at a meeting of euro-area finance ministers in Luxembourg.
Italy’s 10-year bond extended declines after Bagnai confirmed to Bloomberg News an Ansa report citing unnamed sources on his appointment. The bond yield jumped to an intraday high of 2.72 percent before slipping slightly to 2.71 percent as of 3:31 p.m. Rome time. The FTSE MIB benchmark stock index was down 1.6 percent.
“I would humbly advise the markets not to insist on the ‘we are afraid of the euroskeptic economists’ narrative,” Bagnai said in a post on Twitter in English, commenting on investors’ reactions. He added that his and Borghi’s appointments were widely expected and with their moves traders showed little ability to price in beforehand this “obvious information.”
An economics professor at Gabriele d’Annunzio University in Pescara, Bagnai was elected as part of the League bloc to the upper house in March. Borghi is the League’s chief economics spokesman.
“The appointments confirm both the League’s strong political and technical influence,” said Raffaella Tenconi, founder of London-based consultancy ADA Economics. “This doesn’t impact the government’s commitment to the euro, though it shows that Italy today is open to full debate of any sensitive topics including euro membership, migration and freedom of movement.”
More Trouble
Meanwhile, Italian Interior Minister Matteo Salvini threatened to stir up more trouble for the EU unless the rest of the bloc meets his demands for help to contain immigration.
In an interview with RAI television Thursday, Salvini, who is also deputy prime minister and head of the League, said Italy might review its contributions to the EU budget if it isn’t given more support. La Repubblica newspaper reported that he also raised the prospect of setting up controls on Italy’s land borders at a meeting with Prime Minister Giuseppe Conte in Rome on Wednesday.
The government’s program does not include any reference to a possible option for the country’s exit from the European monetary union.
Mini-Notes
Still, the so-called government contract signed by League and Five Star does contain the possible issuing of “instruments such as mini-government notes” which may be used by the state to settle bills with suppliers or creditors. Some fear that the notes, which were first proposed by the League’s Borghi, could become a form of parallel currency or even a temporary form of payment to be used in a transitional period following a possible exit from the monetary union.
“The idea points to a real problem -- the State’s debts to businesses,” Tria said in an interview earlier this month with Corriere della Sera when asked about the mini-bills. “I believe that the best way to deal with it is to eliminate it at its root, to ensure that payments are made on time and in cash,” he added.
Separately on Thursday, Carla Ruocco from the Five Star Movement was named head of the finance committee in the lower house.
--With assistance from John Follain, Alessandra Migliaccio and Joao Lima.
To contact the reporters on this story: Kevin Costelloe in Rome at kcostelloe@bloomberg.net;Lorenzo Totaro in Rome at ltotaro@bloomberg.net
To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Kevin Costelloe, Dan Liefgreen
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