Matthew Goodwin is a British professor and bestselling author who has specialized on the rise of national populism in Europe, particularly with the referendum on Brexit in his home country. His book National Populism: The Revolt Against Liberal Democracy, which was listed as The Sunday Times book of the year, argues that the political shockwaves in the Western world with Brexit, the election of Donald Trump and the rise of populism in Europe are just the beginning of a movement which will drastically change Western society. Worries about immigration, ethnic change and economic inequality have weakened the bond between voters and mainstream classical parties. In this interview, I ask Matthew what his views are on the difficulties regarding a Brexit deal and the future of the European Union.

What are your thoughts on the calls for a second referendum on Brexit by EU representatives and liberal pundits, and the claim that the British people have been manipulated and lied to by pro-Brexit politicians and the British tabloid media?

A case for a second referendum is very problematic. Most people in Britain don’t want a second referendum, if you look at the polls, and a lot of people worry a second referendum would undermine the quality of British democracy from below and would erode the social contract between ordinary people and the ruling elites. What I would remind the Italian audience is that a vast majority of Members of Parliament in the House of Commons voted for a referendum on membership in the European Union, and Article 50 to be triggered, and then stood on the manifesto and then committed on the Withdrawal act which committed to leaving the EU. This is the first time in history the British people asked for something which was endorsed by the parliament and that the government had sworn to respect, so I don’t think a second referendum is the best way to respond to that. As for your second question, many on the remain side argue leavers didn’t know what they were voting for, but my research and studies show leavers knew exactly what they were voting for: they wanted greater control over their legislation and their courts, and they wanted lower immigration by ending freedom of movement by EU nationals. I, therefore, don’t find it credible to say that after all of this time, people have changed their minds, when there is no evidence for this, and to the contrary, there is a lot of evidence that the British people who voted to leave knew exactly what they were voting for.

Do you think the 52% of people who voted for Brexit, voted for a hard Brexit or a soft Brexit?

I think we have to look at the implications of what they were asking for – most voters wanted to end freedom of movement, and on that basis, you cannot end freedom of movement in a soft way, as this requires you to leave the single market. Most voters, in my view, voted for what Theresa May called for in the Lancaster house speech in 2016 denouncing “citizens of the world” as being “citizens of nowhere”, which was very well received by voters (conservatives were 20% ahead in opinion polls), where she called for Britain to leave the single market and customs union and negotiate a new trade agreement with the EU. Most leavers did not vote for May’s soft Brexit deal of 2018: only 16% of British voters think the deal respected the referendum result. Leavers want a harder version of Brexit than the one the prime minister currently offered. They think it won’t allow the UK to develop trade deals with other countries in the world and to end freedom of movement.

Do you think there could be risks involved, should the Brexit vote not be respected, resembling a revolt like what is happening today in France with the Yellow Vest Movement?

The implications of Brexit being overturned or if Article 50 is delayed until the end of the year are significant: we will see the emergence of two competing movements. The first will be Nigel Farage organizing a new revolt against Westminster, with the UK Independence Party turning more right-wing with figures like Tommy Robinson, and a Brexit party carving its place in the European parliament. If May’s deal is accepted, it will leave space for a new populist party, and we will see a new campaign for a harder Brexit. I’ve interviewed all the people involved in these movements myself, and I know there is going to be a big push by leavers to register their disillusionment with mainstream parties, and it may be that that will mean greater coordination with national-populist movements across Europe. That populist element will almost certainly look for the League in Italy, the National Front in France, AfD in Germany, etc for a common cause.

In this context, do you believe the European Union, as it is today, has any chance of surviving?

If we happen to leave the EU it will strengthen national populists in Europe, but if Brexit doesn’t happen then that will undermine and weaken national populism in Europe because they will realize it is not possible to leave the EU. Brexit is, therefore, a real and natural experiment for a lot of political movements in Europe. Over the longer term, the EU is almost certainly going to have to change because of two main challenges: the first is the very significant and deep-rooted conflict over values of West and East, liberal and conservative – where you have a fundamental dividing line, the second is the economic dispute over redistribution and solidarity between North and South. These two dimensions to the European conflict will not be resolved in the short term and they will accelerate as demographic pressures continue to have an effect to EU member states. How can you have a both a Hungarian and a French conception of what the European Union should be doing? And with the UK leaving, a lot of those states of central and eastern Europe will have to pay more in the budget, and they will likely not pay a union not respecting their sovereignty and borders.

Do the British people still feel European, even outside of the EU, or do you think there is a historical sentiment among Britons that they are not part of Europe?

I think people here do feel European, and Brits identify with Europe overall. But I think the remainers misunderstood how the British people viewed the European Union: I always argued that leave was likely to win, but during the referendum, a form of group-think took over and people fell into the trap of thinking remain was going to win. If you think about British relations with the EU, Britain reluctantly joined an economic relationship, but never wanted a political and social relationship; it never fully committed to being part of the European Union because we always had a very strong national tradition that has emphasized sovereignty and English law. Since the 1700s, we developed a national culture that has always been very wary about European continental power, and all those things came together and found expression in the referendum of 2016. Many people were surprised, but in my book I emphasized why leave only got 52% of the vote, considering the history of British identity as an island nation that has never been fully committed to Europe.

L'articolo Brexit will pave the way for national populism in Europe proviene da InsideOver.

We have interviewed Ashoka Mody, visiting Professor of International Economic Policy at Princeton University, former deputy director of the International Monetary Fund’s European Department, and chief representative to Ireland during the Troika bailout. Author of the Eurotragedy, a Drama in Nine Acts. Mody is critical of how the Eurozone is being currently managed and sympathizes with Italy’s new spending proposal.

 Dear Mr. Mody, you said in a recent piece on Bloomberg that Italy needed a fiscal stimulus, and so increased spending to avoid an “unmanageable crisis”. What would this crisis look like?

Italy’s latest economic slowdown started around January, hence well before this current government came in. The pace of world trade had begun to slow down. The Italian economy moves in close tandem with world trade – when global trade growth increases, the Italian economy does well and when trade slows, so does the Italian economy. With world trade growth below 4 percent, as is currently the case, Italy has historically tipped into a recession. A recession will push up the government’s debt to GDP ratio. The interest rate paid by the government will rise, triggering the sovereign bank “doom loop” – a term used to describe how a rise in government’s interest rate creates losses on banks’ holdings of government debt, which pushes prices of bank stocks down – a weak government and weak banks make each other even weaker. The Italian economy is on the edge of such a loop. To be clear, a recession is likely regardless of what happens in Brussels and Rome, simply because world trade is slowing down. It would, therefore, be a mistake to follow the original agreement between the European Commission and the previous government because that requires austerity. Today, austerity makes no economic sense because, if enforced, it would make the impending recession even worse. Italy needs a modest stimulus.

Speaking of recession, how effective do you think Mario Draghi’s leadership of the European Central Bank was in resolving the Eurozone crisis with quantitative easing?

This is a very difficult question to answer. As everyone agrees, quantitative easing came too late. The delay allowed low inflation tendencies to set in. The ECB seems a bit helpless. It has been predicting since 2014 that inflation would rise back to 2%, but there is no sign of such a rise. The ECB has also been unable to use quantitative easing, as other central banks have done, to make the euro depreciate – which would help raise inflation and economic growth. The ECB never seemed committed to quantitative easing – and started talking of tapering in early 2017. Hence, the euro remains strong for the weaker countries and relatively easy for the stronger countries, which is the original flaw of the Eurozone. In other words, different economies have different necessities, and in this case the weaker countries have to deal with this monetary policy that is suited for the strongest members. I also don’t see any evidence that the ECB’s QE raised growth. In 2015 and 2016, the first two years after QE’s introduction, Eurozone growth remained low because world trade growth was low. In 2017, when world trade picked up, eurozone growth increased. The ECB took credit for the rise – but really, no credit is due to the ECB. The whole world grew in 2017. Now that growth has slowed, the ECB says it is temporary – that follows a typical ECB pattern of denying the problems it confronts. The reality is that the slowdown is not due to temporary factors, it is set to continue, and in the next few months it will become more evident. So why won’t the ECB do more? Because it has a fundamental problem – political interests within the governing council are limiting its actions.

And what are the political interests limiting the ECB from acting on this problem, which harms the weakest countries in the Eurozone?

The members of the governing council represent different countries with different national interests. Resolving those differences and achieving a compromise slows down the decision-making process. At times, German and northern interests have clearly dominated, for example between 2013 and 2015. Germans took the lead in delaying QE.

Do you think Italy should lower its deficit to GDP ratio of 2,4%, even o a marginal 2% to appease the Commission, or should it demand that the European Union accept its spending program even if this means the risk of sanctions?

First, there will never be sanctions. Chancellor Angela Merkel once called them “idiotic.” Even European leaders will not add financial sanctions to make a bad problem worse. On substance, the difference between 2.4% and 2.2% is meaningless. We are not in a chemistry lab, making fine measurements of sub-atomic particles. In economics, such precision is silly. The focus of the Italian government should most importantly be on the projected growth numbers, which are far too optimistic. Because economic growth will be slower, the revenue shortfall – and, hence, the deficit – will be greater than 2.4%. The current government should scale back some of their spending ambitions, not because the Commission requires it but because the lower-than-projected growth could push the deficit too high. That said, some stimulus is necessary. I am, in principle, sympathetic to the government’s proposal, because I believe that more austerity would be a disaster. The stimulus is needed to compensate for slowing world trade, but the size of the stimulus needs to be set with a realistic growth forecast.

In light of these circumstances, how realistic do you see the possibility of Italy leaving the euro? What are the risks and benefits involved in such a decision?

In my book, I make it very clear that an Italian departure from the Eurozone would be a huge mistake both for Italy and for the rest of Europe. Everyone would suffer, because if the Italian economy moves back to the lira, repaying the debts that are due in euros will become virtually impossible. I know many believe there are clever tricks to try to avoid defaults. I don’t believe those tricks will work. There will be large-scale defaults, and because the Italian economy is so large, cascading effects from Italy – as Italy’s creditors default on their creditors – will cause enormous damage to the Italian, European and world economy.

What do you say to people who are nostalgic to the lira, when things were better?

Nostalgia is not very useful to making economic policy. Leaving the euro is too costly. The parallel currency is also a ridiculous idea – it has never worked in practice. With a parallel currency, the fundamental problem of repaying debts due in euros will remain.

Do you think Italy risks a potential economic scenario like Greece?

If there is an enforcement of austerity at this point, given the recessionary conditions that Italy is already in, there is no question that the Greek story will be grimly repeated. Austerity will make the recession worse, the debt to GDP ratio will go up, so the Commission will demand more austerity. That is the cycle Greeks went through, and repeating it would be a catastrophic mistake.

What do you think of the new proposal made by German Chancellor Angela Merkel and French President Emmanuel Macron on a new Eurozone budget to unify the Union even more, where only members who “respect the rules” could access it?

I don’t understand how serious people take the French and German proposal seriously. This is an example of what I call this “involution” – when it becomes impossible to make genuine progress, people create work to give themselves the sense that they are doing something useful. First, the size of the proposed fiscal transfers is trivially small. In addition, the idea that rules would need to be respected to receive those transfers is utterly mindless. For example, if the Italian government could receive a transfer only if it “follows the rules”, then (as today) there would be a debate for six months on whether the rules were being followed or not. By then, it would be too late for the transfer to be useful. To be useful, the transfer needs to be automatic, with no questions asked. Otherwise it’s not a transfer. The whole thing is a bit of a joke, and I doubt if the idea will survive.

How strong is Italy’s economy, in reality compared to other European powers like Germany and France?

 The Italian economy is plagued by many problems—low productivity growth, fragile banks, and a highly indebted government. The central problem, however, is the dismal productivity growth, which over the past two decades has been negative – productivity has actually fallen by over 10 percent. Italy does worse on this score than any other eurozone economy. The problem lies in weak schools and universities, which results in extraordinarily low research, development, and innovation. Italian governments have only themselves to blame for this outcome. The result, however, is that whenever the Italian economy approaches a recession, as is now the case, it has little internal strength to pull out of the recession. The economy needs the help of easier monetary policy and a weaker exchange rate. However, this not possible in a monetary union. That is why I call Italy the theater of EuroTragedy.

L'articolo “Italy, center of the Euro Tragedy” proviene da InsideOver.

From Washington D.C. – A new relationship is developing between Washington D.C. and Rome. The Five Star Movement and the League’s victory was brought about by the same establishment that Donald Trump fought against during his campaign. Both countries now have governments intent on protecting their national interests. As a result, Italy and the United States also share important strategic goals.

They both oppose mass migration and Brussels’s current hegemony in Europe. However, on foreign policy, the two countries’ policies don’t necessarily align. We travelled to America’s capital city, Washington D.C., to speak to journalists and analysts from the White House’s perspective, to understand what this American presidency thinks about Europe and Italy’s new anti-establishment government.

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“This presidency has a lot of respect for the new Italian government, especially its position regarding immigration,” said the White House correspondent for The Daily Caller, Saagar Enjeti. When Prime Minister Giuseppe Conte visited President Donald Trump at the White House, Enjeti noticed a particular affinity between the two leaders.

Immigration has been a central theme of Trump’s campaign. The American population is changing rapidly, and Trump has repeatedly expressed his concern for what is happening in Europe. “Trump cares about Europe’s problems, in part because of his origin, but also for strategic purposes: the issues with terrorism brought about by mass migration, for example,” said Daniel McCarhty, director of the Novak Fellowship.

The European Union is another central theme that makes Italy and the United States share common cause, in particular with regards to Germany’s control over the bloc. “Trump isn’t against the European Union as a project, but he’s against how it’s being governed now under Germany,” Enjeti said. “The relationship between this presidency and Angela Merkel is very difficult,” said the foreign affairs reporter for The National Interest, Curt Mills. Trump favored Brexit during his campaign, and he tried to impose tariffs on the European Union, in particular over Germany’s trade surpluses. Italy also shares a concern for how the European Union is being currently run, in particular with regards to the Eurozone. The new Five Star and League coalition has had constant disputes with Brussels over its spending plan. It’s no coincidence that the United States has expressed an interest in buying Italy’s debt. The two countries share common cause in opposing the European Union’s diktats on their economies.

Although Washington and Rome don’t necessarily agree on foreign policy, this hasn’t caused a strain in their relationship (at least not yet). This is likely due to the fact Trump’s foreign policy differs from that of the GOP establishment. Trump expressed a desire for less American interventions in the Middle East and a friendlier approach to Russia during his campaign, similar to Italy’s current foreign policy programme in its manifesto, but Trump began changing his approach once in office in order to appease the neonconservative members in his administration. Trump had used the campaign slogan “America first” to express his desire to fix his own country’s problems before those of others in distant, Middle Eastern lands, and Matteo Salvini used the same message “Italians first” to express his desire to help his own people before foreigners. But the two leaders have very different approaches to their relationship with Russia, a country that has dominated mainstream headlines since their elections.

“It’s no secret that there’s an internal conflict between the GOP establishment and the line of this president. The establishment is strongly opposed to Russia, and I see no chance of having a better relationship at the moment,” Mills said.

Nonetheless, Trump’s hostile attitude towards Iran was expressed during and after his campaign, and it’s a battle Italy wants no part in. Russia is an important strategic partner to Italy, and as a result it doesn’t want problems with Iran – its main ally in the Middle East. This is why Italy has always resisted sanctions against Iran, both from the European Union and the United States. But while Iran continues to be Israel’s main enemy in the region, America will continue to view the country with hostility. America has always supported Israel almost unconditionally as its main ally in the Middle East. So while Trump managed to achieve a more peaceful foreign policy than his predecessors Barack Obama and George W. Bush, whether he will manage to resist the neoconservatives in the GOP establishment is yet to be seen.

A new Italian and American axis, together with other European populist powers, which share common cause like the fight against mass migration and Brussels’s control over the Western economy is developing. How this relationship will develop, however, still needs to be determined, particularly with regards to their approach towards Russia and their roles in Middle Eastern wars.

L'articolo America eyes on Italy to fight the EU proviene da InsideOver.