The EU has had a lot of trouble on its hands, as its members, such as Poland and Hungary, are openly challenging the established order. This time it’s a very serious situation, because Brussels is facing defiance from Italy, the 3rd largest national economy in the eurozone and the 8th largest global economy in terms of nominal GDP. It has a population of over 60 million. It is also a Europhile country and the bloc’s founding member.
The Italian government has rejected the EU’s calls to revise its draft budget for 2019 that includes a 2.4% deficit of GDP, which could dangerously boost the nation’s public debt. The ruling coalition in Rome, which is made up of the League and the populist Five Star Movement, has decided to increase borrowing so that it can fund its campaign promises, such as lowering the retirement age and increasing welfare payments.
Last month the European Commission claimed that these spending targets went against EU rules. Rome is burdened by the second-highest amount of public debt in the eurozone. There’s a 131.8% difference between borrowing and economic output there, but the government believes it will achieve substantial economic growth, while the EU’s predictions for Italy are rather gloomy. Nov. 13 was the deadline for submitting a revised draft budget. Rome did not comply. Now the EU leadership is threatening it with sanctions it until it falls into line. Italy could be slapped with a fine of €3.4 billion.
The Italian government takes an independent stance on a multitude of issues. It is seen as Russia-friendly in its calls for lifting, or at least easing, the sanctions against the Russian Federation. Italian Prime Minister Giuseppe Conte believes Moscow should be re-admitted to the G7. The Italian PM visited Moscow in late October, hailing Russia as an essential global player and inviting Putin to visit Italy. Despite the EU-imposed punitive measures that are in place, Mr. Conte signed a slew of trade and investment agreements. Last year, Russia’s parliamentary majority party, United Russia, and Italy’s Lega Nord (Northern League), a ruling coalition member, signed a cooperation agreement. The regional council in Veneto, where Deputy Prime Minister Matteo Salvini holds a strong position, recognized Crimea as part of Russia in 2016.
Austria is another Russia-friendly EU member. Even the recent “spy scandal” that was obviously staged by outside forces to spoil that bilateral relationship, has failed to damage that rapport. "We are a country that has good contacts with Russia, we are aimed at dialogue, it will not change in the future,” said Austrian Chancellor Sebastian Kurz, speaking to reporters on Nov .14. The conservative People's Party and the far-right Freedom Party — the members of the ruling coalition — are well-disposed toward Moscow. They don’t support the EU sanctions policy.
Hungary is another Russia-friendly EU member. Last month, the European parliament voted to initiate the Article 7 sanctions procedure against Hungary. The government led by PM Victor Orban has been accused of silencing the media, targeting NGOs, and removing independent judges. Launching the procedures stipulated under that article opens the door to sanctions. Hungary could eventually be temporarily deprived of its EU voting rights. In reality, the country is being punished for refusing to take in migrants.
This is the second time Article 7 procedures have been launched. The first time was last year, when the European Commission set that article into motion against Poland over its judicial reforms. A unanimous vote is required to suspend Hungary's voting rights and introduce sanctions. That move is likely to be blocked by Poland. It turn, Hungary said it would stand by Warsaw should the EU launch procedures to punish it. The two nations are united in their efforts to support each other and fend off Brussels’ encroachments at a time when the bloc is undergoing the most difficult times in its history.
Hungary, Poland, and Russia are trying to draw Europe’s attention to the threat to democracy and peace emanating from Ukraine — a problem that has been largely hushed up by the EU leadership.
Slovakia is another EU member state to nurture what some call “special ties” with Russia. It has never been happy with the sanctions against Moscow and has openly said so. Last month, its new prime minister, Peter Pellegrini, called on the EU to revise the sanction policy.
A diplomatic row was also staged in Greece but, as in case of Austria, it may have clouded those historically close ties but has failed to sever them. Cyprus has always been friendly toward Moscow, but Nicosia and Athens are not in a position to protect their independence, as both are heavily indebted and dependent on foreign loans.
The battle between Brussels and Rome comes at a time when Europe is preparing for the European Parliament elections in May 2019. Punitive measure taken by the EU against Italy will most certainly lead to growing public support of that government that is standing up to pressure in order to defend its people. It will increase the number of Italian Eurosceptics who win seats. With so many countries dissatisfied with the EU leadership, it’s hard to predict the outcome. There will soon be other people at the helm who hold quite different views on the problems faced by the EU, as well as on the bloc’s future. Everything may change, including the relationship with Russia and the sanctions that have become so unpopular and have resulted in many national leaders openly challenging the wisdom of such policy imposed by a powerful few.