Italy’s election challenges: Immigration and the economy

Italy, the eurozone’s third-largest economy, goes to the polls this Sunday in a fiercely contested general election that’s being closely watched across Europe.

But how much will issues like migration, debt and the economy sway voters? 

The arrival of more than 600,000 refugees and migrants over the last four years – with nearly 120,000 having arrived in Italy in 2017 – has led to a surge in support for Italy’s anti-immigration parties.

Al Jazeera’s Laurence Lee travels to Sicily, where right-wing parties have focused their ire on refugees and migrants.

And as Jeremy Cook, chief economist and head of currency strategy of World First, explains, “The issue of migration and refugees … is probably the issue that’s going to determine how this election really goes.”

“But in the grand scheme of things, there are a lot more important issues for the Italian economy like structural unemployment, which we’ve had since 2008; problems within the financial services sector like non-performing loans; lack of productivity; all of these longer-scale issues that will impact the economy much longer than migrational effects of one or two summers,” he says.

The issue of migration and refugees are very important in the short term for the Italian economy, because it's probably the issue that's going to determine how this election really goes, but in the grand scheme of things, there are a lot more important issues for the Italian economy.

by Jeremy Cook, chief economist and head of currency strategy, World First

The Italian economy has been growing for three consecutive years, according to Cook, but it hasn’t returned to its level of GDP that it had in 2007, because “it’s shackled by high debt … It’s not translating in terms of the pockets of the Italian populace. Unemployment is very high, as one-third of 18-25 year-olds are still unemployed … Productivity remains very weak, it’s about 10 percent below the numbers that you see in Germany, for example, or in the UK. Therefore, the average Italian is having to work just a little bit harder to get to the same level of productivity as elsewhere in Europe. That’s affecting their growth, their prospects, and affecting their sentiments as well.”

The new government will have to deal with the country’s debt “very, very carefully,” says Cook. The current candidates are campaigning on slogans about higher spending, “but debt to GDP is still very high as a result of an expansion of the debt pile and also the slow-run of GDP that we have seen. While it has been positive, it’s been slow over the last three, four years. So, we’re not likely to see any form of debt reduction strategy coming out of this election, purely because if the government of the day goes for it, then the voters are quite able to turn around and say ‘hey, that’s not what we voted for – it wasn’t in any of your campaign pledges’.”

“But we do need to see investment within the Italian economy. The amount of investment that we’ve seen into Italy from outside of the country has been very, very poor over the course of the past 10 years. It’s been half of what we’ve seen in France and about an eighth of what’s happened in the UK,” says Cook.

Also on this episode of Counting the Cost:

Steeling for a global trade war: US President Donald Trump has said he will slap new tariffs on imports of steel and aluminium. It was one of Trump’s key campaign pledges but the announcement is driving fears of a global trade war. The European Union and Canada have already said they will retaliate, and opponents in the US say it will end up hurting businesses and consumers. Kristen Saloomey reports.

Brexit draft: Trading relations are at the heart of what Brexit is all about. The UK wants a Brexit treaty on trade to avoid crashing out of the European Union. Brussels put forward a deal which was the result of months of negotiations, but the UK isn’t happy with what it says about Northern Ireland. It says Northern Ireland can remain within a customs union if the UK fails to come up with a better idea. Thus, the pressure is on Theresa May‘s government to spell out an alternative, Nadim Baba reports.

The fifth generation (5G):: Technology companies are promising to change people’s lives with super-fast wireless mobile networks. So-called 5G systems are the main focus of the Mobile World Congress in Barcelona. But some critics are warning of a growing digital divide, as Charlie Angela reports from Barcelona. Daniel Gleeson, senior analyst at Ovum explains the significance of 5G technology.

Germany’s diesel ban: A court in Germany has just made it legal for cities to ban cars that run on diesel. The ruling in Europe‘s largest car market is designed to tackle air pollution but not all car owners are happy. Dominic Kane reports from Berlin.