Tag: Western Europe

Italian budget proposal sparks controversy

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By Mariah Franklin

BOLOGNA, Italy — After months of internal deliberations, the government has put forward a highly controversial set of economic and fiscal targets for 2019, resulting in considerable rancor in Italian and wider European politics.

Critics both in and outside of Italy suggest that those targets are flawed. The proponents of the budget responded to such criticisms variably. Most notably, Italian Interior Minister Matteo Salvini, a member of the eurosceptic Five Star Movement (M5S) that has governed Italy in coalition with the League (Lega) since May, has threatened to sue the European Union (EU) for damages to the economy.  As talks between the Italian government and EU leadership continue, the political consequences of a potential agreement have yet to be fully realized.

Some observers see echoes of the 2015 standoff between Greece and the EU in Italy’s current budgetary dilemma. Like Greece, Italy’s financial troubles escalated dramatically in 2008 as a result of the worldwide recession. In the ten years since the 2008-2009 financial crisis, Italy, at the behest of the EU, implemented a number of reforms to ensure its debt-level remains sustainable. Such measures have been moderately successful, though Italy’s public sector debt remains significant — at 131.8 percent of national GDP, the Italian public debt is among the world’s highest.

From a political perspective, Italian financial reforms have proven problematic. Public dissatisfaction with the austerity policies championed by the EU have arguably contributed to the electoral successes of the M5S-Lega coalition earlier this year. Together, they have promoted the notion that the EU has been acting the part of technocratic dictator over the past decade.

Budget negotiations for the 2019 fiscal year proved both arduous and heated. Beginning in June, negotiations took place within the Italian government until the self-imposed deadline for the initial economic and fiscal target proposal had nearly passed. In the last weeks of September, the government released a proposal to simultaneously reduce taxes and increase public spending. Members of the government’s anti-austerity wing repeatedly clashed with those favoring spending more in-line with EU stipulations. Ultimately, the government agreed to run a 2.4 percent deficit in 2019, rather than the 1.6 percent figure initially put forward by Italian Finance Minister Giovanni Tria.

The EU responded to the fiscal targets ultimately set out by Tria with warnings that the plan may be amended, if not rejected. Because of Italy’s large public-sector debt, the EU continues to require that Italy reduces its public spending. The 2.4 percent deficit is within the 3 percent EU-imposed limit on domestic deficit spending, but far greater than the .08 percent  limit set on Italy specifically.

EU Commissioner Jean-Claude Juncker stated that, should the proposals set out by the Italian government be implemented, they would represent an existential threat to the eurozone. Prominent members of Italy’s government responded negatively to this assertion, claiming that such comments constituted material damage to the Italian economy. This conflict of vision for Italy’s economy is still ongoing; however, it must be resolved in time for Italy to submit a draft budgetary plan to the European Commission by October 15. Whether Italy’s current government is ultimately capable of both sustaining itself in the long term and resolving its current dispute with the EU remains to be seen.

 

Sebastian Dannhoff: Germany

Screen Shot 2018-09-20 at 10.59.55 AMAfter spending his first year in the Strategic Studies program at SAIS Bologna, Sebastian Dannhoff moved to Berlin, Germany for a summer internship with The German Marshall Fund of the United States (GMF). A departure from his business background, working for the think tank ultimately shaped Sebastian’s concentration and unveiled the rewards and particularities of nonprofit work.

Originally from Dusseldorf, Germany, Sebastian speaks fondly of life in Berlin and shares advice for students hoping to build careers in the capital.

Tell us about your position at the German Marshall Fund.

I was a Berlin Program Intern in the second largest office the fund has after Washington, D.C.. The GMF works on transatlantic issues like US-European relations, migration, NATO and security, but the Berlin Program mainly focuses on holding events and expanding the constituency of the organization. I was responsible for a target group analysis, so my job was to sift through event data— number of invitees, the invitees’ sector, time of day, topic of event, etc.—and then analyze it and put it all in a comprehensive presentation for the management. I went beyond just data analysis and suggested things that could be improved or done differently in the organization.

My priorities for the summer were being in Berlin to network and seeing whether the think tank atmosphere was for me. If you’re German and you want to go into politics, chances are you’ll end up in Berlin at some point.

What kind of events were you organizing?

There’s a whole different range, from small, off-the-record meetings to large, public events. The most interesting one I saw had 150 people in attendance and was about Trump, the new conservatism and how to understand American politics from a European perspective. We invited German and American stakeholders, including Michael Stumo, an American economist who strongly supports Trump’s economic policies.

From an economic perspective, Germans are flabbergasted by Trump, so we tried to get Trump supporters to give a better understanding of his policies. The goal was to get European and German politicians, journalists and professors discussing the topic and devising ways to work with his policies.

There was also a very interesting event with Lecia Brooks talking about racial tension and diversity in the U.S. and the resurgence of nationalism.

What was the most challenging aspect of your internship?

The most difficult things were due to my background. All of the internships I’ve had before were in business or finance, so this was the first time that I worked in a think tank and nonprofit. The internships I did before had a bottom line, a tangible result and profit figures. I could pat myself on the back when those were good. In a think tank, the results are much more distant. You put together an event and you feel good about it, but what comes of it in the short- or medium-term? An event might affect policy one year down the road, or a paper that your organization puts out might influence new legislation later on. There’s no instant gratification and you need endurance to see your work through, because what you spent days and days on might not immediately translate into tangible results.

What was life like in Berlin?

Berlin is such a cool city. All the multiculturalism translates to a really interesting nightlife. In Berlin we call the different parts of the city kieze and every different kiez is like its own city.  

There’s something for everyone. If you want to go party on Tuesday at 1 p.m. in Berlin, you can. There’s every kind of restaurant you could possibly imagine and weird twists on every bar. The city also has posh and nice areas if everything becomes too much. You can take public transit outside the city into more scenic, natural areas.

The one thing I tell people is that Berlin is not Germany. Berlin is its own thing. You can hop on the subway, hear six languages and none of them are German. People love it, but don’t take it as your standard of what Germany is like.

Were there any SAIS classes that proved helpful during your internship?

During my internship, I wasn’t doing research that was thematically related to my concentration, but I got to attend events that concerned themselves with NATO or the Bundeswehr. Those events confirmed that I chose to go into the right field, because they were the things I found most interesting.

The experience probably pushed me more towards geopolitical and geostrategy courses as opposed to the more nitty-gritty operational, tactical analysis. Whereas after my first year in Bologna I was fascinated by all the tactics and policies, I came to realize that I have to prioritize issues that I’ll be working on later in life.