Exclusive-Italy’s Meloni says public finances will be safe in her hands

Published: Aug 25, 2022, 11:08 UTC

By Angelo Amante, Giselda Vagnoni and Crispian Balmer

Reuters interview with Brothers of Italy leader Giorgia Meloni

By Angelo Amante, Giselda Vagnoni and Crispian Balmer

ROME (Reuters) – The Italian rightist alliance’s ambitious spending plans will respect European Union budget rules and not blow a hole in the country’s finances, the head of the party topping the polls ahead of a national election next month said.

The nationalist Giorgia Meloni, seen as the front runner to become Italy’s first woman prime minister, said she wanted to focus on investments to boost Italy’s chronically weak economic growth but pledged responsibility in managing its debt-laden public accounts.

“I am very cautious… No responsible person, before having a full picture of the resources that can be invested, can imagine wrecking the country’s finances,” she told Reuters in an interview in her office in parliament.

The Sept. 25 election was called in July after the collapse of Prime Minister Mario Draghi’s national unity government.

Meloni’s Brothers of Italy provided the main opposition to Draghi and polls suggest her conservative bloc, including the League and Forza Italia, is poised to win.

Investors saw the former European Central Bank chief Draghi as a safe pair of hands and his resignation has spread uncertainty. Investor bets against Italy’s government bond market are at their highest since 2008, data from S&P Global Market Intelligence suggests, in a sign of growing unease about Italy’s economic and political outlook.

The rightist alliance manifesto promised steep tax cuts, early retirement and amnesties to settle ongoing tax disputes, which look hard to implement in a country whose public debt is targeted at 147% of GDP this year.

“We have put down on paper a few things that depend on state accounts… The first thing we would have to do would be the budget law and we clearly intend to make it within the parameters that are required,” she said.

Meloni, whose party has expressed anti-euro views in the past, is rushing to reassure markets and partners that if she becomes prime minister she will not usher in a era of conflict with European institutions.

“We want a different Italian attitude on the international stage, for example in dealing with the European Commission, (but) this does not mean that we want to destroy Europe, that we want to leave Europe, that we want to do crazy things,” she said.

“It simply means explaining that the defence of the national interest is important to us as it is for the French and for the Germans.”

She declined to answer a question on media speculation over a possible role in a future conservative government for ECB board member Fabio Panetta, but said he is a person “of the highest standing”.

Meloni said the EU stability and growth pact, which aims to keep budget deficits below 3% of GDP and public debt below 60% of GDP across the bloc, cannot be reinstated as it was before being put on hold in 2020 due to the coronavirus pandemic.

Meloni suggested the money needed to stem the impact of the energy crisis on business and families could be taken out of such calculations.

“On the energy issue, the nations that are facing the greatest difficulties due to their past debts could be better helped,” she said.

Meloni ruled out any intention to take full control of national energy groups Eni and Enel as the French government is aiming to do with EDF, saying the two companies are proving successful in their current shape.

However, she believes it is the government’s duty to shield nationally relevant assets and avoid takeovers from foreign groups.

Brothers of Italy wants state lender Cassa Depositi e Prestiti (CDP) to take control of former phone monopoly Telecom Italia and manage its broadband network.

“My aim is a state owned, non-vertically integrated network and private operators operating under free competition,” Meloni said.

The outgoing government is also pressing ahead with plans to sell a majority stake in state-owned ITA Airways, a move Brothers of Italy has opposed, saying it should be up to the next administration to make a decision.

“I don’t know if there is still time … I asked, stop, because it is very important to understand … if it is possible to keep a flag carrier,” Meloni said.

(Reporting by Angelo Amante, Giselda Vagnoni and Crispian Balmer in Rome; additional reporting by Yoruk Bahceli in Amsterdam; Editing by Nick Macfie)

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