The EU v Italy’s new government: which will blink first? | Barry Eichengreen

Populist parties' ambitious fiscal plans have put them on a collision course with Brussels

The majority of Italians want two things: new political leadership and the euro. The question is whether they can have both.

The point about new leadership is uncontroversial. The country's two ruling populist parties, the League and the Five Star Movement (M5S), together commanded 50% of the vote in the 4 March general election, and, as a result, have majorities in both houses of parliament. Their majorities may be slim, but the election, in which the main centre-right and centre-left parties eked out just 33%, was a resounding repudiation of the status quo.

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