Is Italy’s Populist Government Manufacturing The Next Political Crisis?

In late September, the Italian Parliament approved the DEF (Documento di Economia e Finanza), with a deficit/GDP of 2.4 percent for 2019, considered excessive and dangerous by the EU. It was a critical moment. During recent months, prominent Italian politicians from M5S, the Partito Democratico and Lega had all weighed in on what the budgetary priorities should be. Possible measures included a flat tax, basic income (reddito di cittadinanza) and a revision of the Legge Fornero of the Mario Monti government (a pension scheme named after a former minister), about which the ECB has already expressed its concern. Comments from some influential politicians in Italy have raised the distinct possibility that the Italian populist government may be forced to exit the eurozone if tensions over spending persist.