What Is Italexit (Italeave)?
Italexit is a portmanteau of "Italy" and "exit," is the Italian version of Brexit where the EU's third-largest economy would potentially leave the European Union (EU). It may also go by the alternative portmanteau Italeave ("Italy" and "leave").
- Italexit, or Italeave, is the term given to the possibility of Italy leaving the EU, similar to the U.K.'s Brexit.
- At the forefront of Italexit is the Five Star Movement, started in 2009.
- Sentiment for leaving, whether it be Italexit or some other "-exit," is often related to a loss of sovereignty to the EU and high financial contributions that foment extremist thought.
Each country in the European Union has a specific set of political interests that depend on the country's situation and its unique history and culture, as well as the values and ideologies of the extremist parties on either side of the political aisle. The prospect of Italy leaving the EU became more pronounced throughout the Spring of 2018 as national elections in March of that year were inconclusive, essentially leaving the country without a ruling government.
At the forefront of Italexit is the so-called Five Star Movement, started in 2009. The Five Star Movement is the second most popular party in Italy behind the Democratic Party. The Five Star movement was already gaining steam prior to Brexit, as the party experienced success in local elections, electing Virginia Raggi and Chiara Appendino as mayors of Rome and Turin, respectively. While the turnout was relatively low, the vote serves as an indication of the state of Italian politics.
During the last weekend in May 2018, Italy's president, Sergio Mattarella, appointed former IMF official Carlo Cottarelli as interim prime minister until new elections in early 2019. As Italian president, Mattarella has the power to nominate the head of the Italian government and its ministers. He nominated Cottarelli after refusing to accept the nomination of Paolo Savona as finance minister. Savona represents the Five Star Movement, which has pushed Italy to break away from the EU. This created an impasse that was solved by the formation of a coalition which saw the current Prime Minister, Giuseppe Conte, came to power in June 2018.
Motivation to Leave
Prior to the formation of the coalition between the Five Start Movement and the League, Italian political developments had rattled global markets as the prospect of a weakened EU was revived. Of central concern was the threat that Italy would default on nearly $2.7 trillion in debt, which would have had a massive impact on other countries, banks, and institutional investors.
Throughout Europe, nationalist political parties have latched on to the idea of leaving the European Union. The sentiment for leaving is often related to a loss of sovereignty to the EU government in Brussels, high financial contributions to the Union and specific issues that can vary by country—for example, immigration and healthcare.
While the majority of academics and mainstream politicians tend to argue for the European Union, the Brexit vote has inspired nationalist parties to intensify their efforts to split from the EU. Other countries with extremist parties that have acknowledged their own versions of the possibility of leaving the EU include Greece (Grexit), France (Frexit), and the Czech Republic (Czech-out).
Italexit Economic Consequences
The immediate consequences of the Brexit vote in 2016 were not favorable to either the UK or the EU. Global stock markets plunged. The UK's credit rating was quickly downgraded by the three major credit agencies: Standard and Poor's, Moody's, and Fitch, and the British pound (GBP) hit its lowest exchange rate since 1985. David Cameron, who was PM at that time and who opposed Brexit, announced that he would step down and was succeeded by Theresa May. Similar political and economic turmoil can be expected if, and when, Italexit comes to fruition.