The probable next prime minister has not yet explained her sums
Save time by listening to our audio articles as you multitaskOxford Economics, a consultancy, calculates that the right’s stimulus could add around 1.6 percentage points togrowth next year. But even assuming that some of the measures were phased in gradually, the increase in output would come at the cost of higher inflation and a budget deficit of about 6.2% for the next five years.
The calamitous reaction to Mr Kwarteng’s mini-budget showed that investors do worry. And with Italy owing more than half as much again as Britain relative to its, a similar response from the markets could have grave consequences for the entire euro zone. So much, you might think, for PlanBecause of Italy’s unhurried provisions for changing governments, Ms Meloni is not expected to become prime minister until late October.
But Ms Meloni, coached by the outgoing prime minister, Mario Draghi, is more reluctant than her ally, the Northern League leader, Matteo Salvini, to increase Italy’s already vast public debt. She and her advisers are reportedly planning to mitigate the effects of the cost-of-living crisis with a package of measures worth 1.25% of.
So far, so prudently pragmatic. But there are already signs that Ms Meloni will face resistance if she simply tries to ditch the right’s original plans. On October 4th Mr Salvini and a senior member of the third main group on the right, Silvio Berlusconi’s Forza Italia party, both argued for persisting with the flat tax extension.
Much will depend on the composition of Ms Meloni’s cabinet. A team long on technocrats would reassure markets and Italy’spartners. But her allies want seats at the table. The more they have, the greater will be the pressure on Italy’s next prime minister to stick to PlanThis article appeared in the Europe section of the print edition under the headline"What’s the plan?"
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