Following massive pressure from Berlin, Italy's new government has renounced on appointing a well-known euroskeptic to become economy and finance minister. The renowned economist Paolo Savona must accept a less prominent post as Minister for European Affairs - above all because he criticizes Germany's blatant policy of domination at the expense of the other euro zone countries. The far right Lega Nord is now almost as strongly represented in Rome's government as the 5-Star Movement: Due to Germany's open interference, Lega's poll ratings have soared, thereby significantly increasing its political clout. In the run-up, German politicians and media had reactivated a tactic they had been using since the beginning of the euro crisis: With warnings of harsh financial market reactions, they fuel the fear of a crisis, thus applying even more pressure on Rome. According to German media with wide circulation, Italy's policy "concerns all of us" - "Interfere!"

"Enemy of Germany"

On June 1, accompanied by massive criticism from Germany and interference by German politicians and media, Italy's reshuffled populist 5-Star Movement and the far right Lega Nord coalition government was finally sworn in. Following Berlin and Brussels persistent harsh complaints, Italian President Sergio Mattarella had rejected the renowned economist Paolo Savona's nomination as Minster of the Economy and Finance, plunging Italy into a brief, but serious, political crisis.[1] At one point the Mediterranean country was threatened with new elections in the coming fall. Savona, who accuses Germany's blatant policy of domination at the expense of the other euro zone countries, has been dubbed an "enemy of Germany" by leading German media.[2] In her first reaction, German Chancellor Merkel declared that she will approach Rome's new government with an open mind - albeit with clear conditions: She would categorically reject all calls to write-off Italy's debt as is being demanded in Rome.[3]

"Berlin's Enemy"

The economist Giovanni Tria is Italy's Minister of Economy and Finances. According to media reports, he was chosen also at the request of Savona, who had been prevented from taking this position. Savona has now been named Minister for European Affairs.[4] Tria will probably refrain from an "offensive against Europe" - meaning fighting the euro - and instead "guarantee stability" in foreign policy, according to an initial assessment. With reference to reports in Italian media, he is also "Berlin's enemy," because Tria calls the German trade surplus an "indicator for the euro's failure" and sees in Germany's austerity policy the key problem of the euro zone. In Brussels, he and Savona will now work toward renegotiating the "European rules of the game." Above all, he will fight against the "two-class system," into which the EU has been sinking since the outbreak of the euro crisis. Italy should regain its first class position.

Popularity boost for the Right-Wingers

In the meantime, the government formation in Rome, which has just barely avoided new elections in the fall, is accompanied by a boost in popularity for the racist Lega Nord.[5] Recent election polls show the Lega's popularity has risen from 17 percent during the last elections to between 25 and 27 percent - in response to German interference and the Germany-approved rejection of Savona in favor of Mattarella. Only with wide-ranging concessions, was the Five Star's top candidate, Luigi Di Maio, able to dissuade the Lega's leader, Matteo Salvini, from proceeding with his plans for holding new elections. Even though the Lega - popular mainly in northern Italy - had drawn only half as many votes as the Five Star movement, it will be almost at parity within the government. Both parties' leaders will be Vice Premiers, while Di Maio will also be Minister of Economic Development, Labor and Social Policies, whereas the right-wing Salvini assumes office as Minister of the Interior, and can pursue his plans to deport hundreds of thousands of refugees.

Crisis Panic

The new coalition's renunciation of Savona as Minister of Economy and Finances and the unexpectedly rapid formation of a government, following the fierce clashes, are also due to the "reaction of the market," according to leading German media organs. The fact that interest rates grew rapidly on Italy's state bonds, as a consequence of the developing crisis, did not leave the coalition partners "unimpressed," making a rapid decision imperative. In fact, the strategy of using alarmist media reporting,[6] to exacerbate a slumbering financial crisis, to push up the interest rates in the countries in question and put them under more pressure is a tactic often applied by Germany since the beginning of the euro crisis. Also, in this case, German media have fomented fear of a crisis in the run-up to Rome's government formation, by declaring Italy the European Union's new "fault line."[7] The German EU Commissioner Günther Oettinger explicitly hopes that Italy's citizens would see the turbulence on the finance markets as an admonition not to vote for euro critics again.[8] Reports of flight of capital from Italy [9] persist - and alternate with major media commentaries' repeated demands not to "bail out" Italy.[10]

The Italian Hangman's Noose

At the same time, German media is spreading resentment against Italy, similar to that against Greece during the Greek crisis.[11] Italy was described, in a commentary on the largest German-language portal, as a country of "scroungers," "holding out their hands" to "make an easy life for themselves" - and then threaten their creditors not to pay their debts.[12] Politicians and parties - not just in Italy - critical of German predominance in the euro zone are regularly called "enemies of Germany." Germany's largest tabloid wrote of "rowdy" anti-German populists "pretending" to voters that Italy is being ruled from Berlin.[13] President of the EU Commission Jean-Claude Juncker, on the other hand, placed blame for the country's economic situation solely on corruption and mismanagement in southern Italy. The Italians must "take care of the poor regions of Italy," he declared, that means "more work, less corruption, seriousness."[14] Germany's largest weekly magazine illustrated its current cover story on the German-Italian conflict with the picture of a hangman's noose formed from an Italian spaghetti.[15] The cover read, Italy is in the process of destroying itself and "Europe."

European Domestic Policy

The online edition of the same weekly, simultaneously, called on Berlin and the EU to undertake an offensive interference policy toward euro countries in crisis.[16] "Italy's development" is "certainly not merely a national matter," it writes. If "the third largest national economy in the euro zone" will be "ruled by a right-wing and left-wing populist government," it "is all our business." In the struggle over Italian policy, the "mistake" that was made before the Brexit Referendum - shun outside interference - should be avoided. The "conclusion" drawn from the British citizens' decision - under the German establishment's disapproval - to withdraw from the EU, should be "interfere!" The online article has already countered in advance the anticipated objection that this would subvert the sovereign democracy of an EU member nation, by saying, the interference is a "desirable step in the direction of a domestic European policy."

[1] See also Eurocracy.

[2] Tobias Piller: Italien will einen Deutschland-Feind in der Regierung. faz.net 26.05.2018.

[3] Thomas Gutschker: Merkel: Gehe offen auf neue italienische Regierung zu. faz.net 02.06.2018.

[4] Anna-Lena Ripperger: Die EU bleibt Roms Feindbild Nummer eins. faz.net 01.06.2018.

[5] Ulrich Ladurner: Eine ganz besondere Regierung. zeit.de 01.06.

[6] Krise in Italien: "Alleine kann die EZB den Euro nicht retten". focus.de 02.06.2018.

[7] Henrik Müller: Italien ist die Sollbruchstelle des Euro. spiegel.de 27.05.2018.

[8] Oettinger bittet um Verzeihung. deutschlandfunk.de 31.05.2018.

[9] Andrea Cünnen, Regina Krieger: Anleger flüchten aus Italien - kommt eine neue Euro-Krise? handelsblatt.com 29.05.2018.

[10] Mark Schieritz: Wir sollten Italien nicht retten. zeit.de 31.05.2018.

[11] See also In der Gefahrenzone.

[12] Jan Fleischhauer: Die Schnorrer von Rom. spiegel.de 24.05.2018.

[13] Albert Link: Italiens Populisten pöbeln gegen Deutschland. bild.de 29.05.2018.

[14] EU-Parlamentspräsident erzürnt über Italien-Äußerungen. faz.net 01.06.2018.

[15] Der Spiegel 23/2018.

[16] Peter Müller: Mischt euch ein! spiegel.de 02.06.2018.