Giorgia Meloni Makes Markets Anxious, But Italians Want Her in Charge

The far-right leader has a comfortable lead in the polls ahead of Sunday’s election, but no one is really sure what she will do under the pressure to meet the challenges her country faces.

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(Bloomberg) – Giorgia Meloni’s electrifying performances at political rallies have made her the literal exception to becoming Italy’s first woman prime minister. She will also be the first to fight with the flame symbol commemorating former fascist leader Benito Mussolini.

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Investors and officials are nervous at the prospect of a charismatic nationalist with no government experience taking power. Italy is, of course, grappling with the aftermath of the worst conflict in Europe since World War II. But the country has been adrift for years, struggling to find a formula that can unlock its potential while staying true to its identity.

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There is something about 45-year-old Meloni that voters simply resonate with.

When you see her on stage you can understand: she’s charming, she’s determined and she’s very, very Italian. But for officials and investors across Europe nervously watching as she nears victory in Sunday’s election, there remains one fundamental question to answer: Who is Giorgia Meloni?

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The first thing to remember is that Meloni is a product of the Italian system, and particularly its habit of occasionally marginalizing its elected governments. She founded her party in 2012 to avoid backing Mario Monti’s technocratic government and rose to prominence last year as Mario Draghi’s opposition leader.

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Basically, Meloni sees himself as an outsider fighting against the system on behalf of the common people. She also admires Hungarian Prime Minister Viktor Orban and his conservative stance on the LGBTQ community and abortion rights, and his opposition to European Union intervention. “The party for Europe is over,” she cried at a rally in Milan on September 11.

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For all her radical credentials, people close to Meloni say she is determined to show she can handle Italy’s huge debt burden and keep investors on her side. They do not intend to increase the budget deficit to fund their political plans, they say.

The markets are not convinced that she will make it. “Perhaps notions of European solidarity in the face of a common enemy isolating Italy,” said Rabobank strategists, including Richard McGuire. “However, it is difficult for us to imagine a scenario in which Italian bonds do not come under pressure.”

A senior German official, who asked not to be named, noted that the yield on Italy’s 10-year bond has already risen to over 4% from less than 1% in December. “And she hasn’t even done anything,” they added.

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Read more: Guide to what the Italian elections will mean for financial markets

Meloni is aware of the danger she would face as prime minister, her advisers say, and something has changed about her since Mario Draghi’s government was overthrown in July. She is more thoughtful, focused and has a certain apprehension about her.

Italy’s recent history is full of politicians who shone brightly and then burst into flames. Matteo Renzi, Beppe Grillo and Matteo Salvini all promised to change Italy and then fell back as quickly as they emerged. Meloni has been thinking about how to avoid this fate.

For years, she devoted hours each day to nurturing contacts in academia, national security, finance, business, diplomacy, and of course politics in short 10-minute phone calls. According to people familiar with her plans, she has no plans to select a government from among her longtime associates.

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As the election approaches, she has deepened her relationship with Draghi herself, speaking weekly to the former European Central Bank governor to discuss a potential move.

Italy is facing a treacherous winter crisis with energy shortages caused by the war in Ukraine, sending inflation spiraling out of control, straining public finances and leaving many families and businesses questioning whether they can afford to turn up the heating this winter to maintain.

Read more: Energy Crisis Empowers Europe’s Populists to Harness Their Anger

Having also backed the outgoing prime minister’s plans to send arms to Ukraine, it adds to the confusion as to where she really stands.

“I’ve been accused of following the Draghi line and labeled as a fascist,” she said during an election debate this month. “How can you be both at the same time?”

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To interpret Meloni’s shifting alliances and political positions, you also need to understand what hasn’t changed.

Meloni has been involved in far-right politics for 30 years, since joining the local branch of the Movimento Sociale Italiano in Rome when she was 15.

She had moved with her mother to the working class neighborhood of Garbatella in southern Rome after her father left the family and moved to Spain.

Today it is an up-and-coming area with trendy shops and bars. But when Meloni moved in with her mother and sister in the 1980s, it was a rough place where people spoke with heavy Roman accents and were quick to joke and laugh at themselves.

It’s a little too easy to draw a line from the fatherless girl to the patriarchal party machine. In fact, she found MSI almost by accident.

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Meloni was urged to become politically active after the Mafia murders of two Sicilian prosecutors in 1992. She had heard of MSI, and the party’s offices on Via Guendalina Borghese were near her home.

But her staff say Meloni found a family about a decade older among the MSI. They shared a passion for God, family and homeland. But more than that, they hung out, they had fun, they stuck with her.

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Although political designations have changed over the decades, the group has remained fairly constant. Most of the consultants now working with Meloni were part of that world. Her sister and brother-in-law are also members.

And the leader still makes notes on scraps of paper she keeps in her pockets, just as she did when she entered politics as a young girl. But now Meloni is in charge.

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Meloni makes all key decisions and provides clear instructions through the chain of command, her staff said. This has enabled her to create a carefully calibrated series of positions.

At the core of their appeal to traditional voters is values.

Echoing Donald Trump’s rhetoric, Meloni wants to put the Italians first. She also wants to limit immigration and abortion and impose restrictions on the LGBTQ community.

But her commitment to protecting Italian companies from foreign takeovers has become a mainstream position since Trump’s election victory. Draghi himself increased Italy’s powers to fend off unwanted foreign investors, and Meloni backed Draghi’s call for a price cap on gas prices.

Russia was her biggest change. In 2018 she welcomed Putin’s re-election. In 2016 she criticized sanctions against Russia after the annexation of Crimea.

But the invasion of Ukraine in February changed her view of Putin and caused her to switch to the pro-NATO camp. She was genuinely upset by the evidence of abuses committed by the Russians, aides say.

Read more: Italy’s divided loyalties are exposed by the war in Ukraine

For those who still say she hasn’t been clear enough about who she really is and what kind of government she would lead, the candidate herself has an emphatic response that has echoed in rallies after rallies.

“I’m Giorgia,” she calls out. “I’m a woman. I’m a mother. I’m Italian.”



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