More US than China: Meloni’s plans for Italy’s future

As a declining middle power heavily reliant on the United States for security, Italy feels significant concern over the ongoing transition in the global order, and Rome will have to face the choice of whether to trade military security for economic growth, asks Arturo Varvelli.

Arturo Varvelli is the head of the Rome office of the European Council on Foreign Relations (ECFR).

“Italy and China can maintain a strong relationship even without the Belt and Road Initiative (BRI),” Italy’s Prime Minister Giorgia Meloni’s recently said, hinting at a potential unilateral departure from China’s ambitious infrastructure project.

Italy – the first and only G7 country to sign a Memorandum of Understanding (MoU) with China regarding the New Silk Road – finds itself at a crossroads. The agreement, inked by the populist government led by Giuseppe Conte in 2019 – with Matteo Salvini, Meloni’s current ally, serving as deputy prime minister – is set to expire in March 2024.

Italy now faces the decision of whether to renew it by the end of 2023. This issue might also arise during Meloni’s visit to Washington later this month, in another round of the tug-of-war over Italy’s loyalty.

In the midst of the escalating rivalry between the United States and China, Italy’s choice holds the potential to influence European policy.

Although not signatories to any memorandum, France and Germany have made their discomfort with a sharp bipolarity apparent: Emmanuel Macron advocating for European autonomy and Olaf Scholtz not forsaking a privileged economic relationship with Beijing. But they do not face the unease of formally abandoning a past agreement. The Italian prime minister’s decision could have significant repercussions for Europe as a whole.

The growing normalisation of far-right movements within centre-right parties affiliated with the European People’s Party (EPP) places Meloni at the forefront of European politics, potentially making her a key player in the upcoming European elections – a position Italy has not held since Matteo Renzi’s landslide victory in 2014.

Italy’s traditional foreign policy approach revolves around maintaining good relations with all parties involved. After all, Italy relies on exports for nearly one-third of its GDP (32% in 2021). A peaceful international environment offers Rome the greatest success and economic growth prospects.

The public, generally inclined towards pacifism, typically supports this approach. For instance, a recent public opinion poll by the European Council on Foreign Relations (ECFR) indicates that Italians believe Rome should cooperate with the United States and China simultaneously.

Most (52%) view Washington as a partner rather than a political and military ally (only 17%). Meanwhile, 42% of Italians consider China a necessary partner for collaboration. The same percentage of Italians believe Beijing should not face sanctions even if it provides military support to Moscow in the war against Ukraine – an opinion shared by the highest number of all European countries polled, second only to Bulgaria.

Regarding a conflict between the United States and China, only 18% of Italians will side with the US, while 65% prefer neutrality.

Italy perceives the current international order as an emerging bipolar system, with the gradual decline of the American (or, from Italy’s perspective, Western) unipolar moment accelerated by China’s rise.

Unlike the Cold War bipolarity, predominantly shaped by military power, this new power structure relies heavily on the geo-economic dimension, encompassing industrial and technological capabilities, energy resources, and the digital realm, collectively shaping the future balance of power.

The Italian government is well aware of the stakes in this field. Recently, the government has expanded its special powers to intervene in business transactions to safeguard the nation’s strategic assets. The latest report on these “Golden Power” regulations reveals that 608 transactions were flagged in 2022, a significant increase from 83 in 2019, 342 in 2020, and 496 in 2021. On this matter, Meloni appears to be continuing the policies of her predecessor, Mario Draghi.

While Italy currently wishes to avoid choosing sides between the US and China, Giorgia Meloni appears determined to signal loyalty to the Atlantic Alliance. Italy cannot afford to become isolated from its historical allies.

The Meloni government has already aligned Italy with an Atlanticist stance regarding another critical issue – the war in Ukraine. Despite a longstanding pro-Russian sentiment in Italian public opinion and close political ties between Rome and Moscow, the current government remains consistent with the previous administration led by Mario Draghi.

In fact, the Russian invasion of Ukraine has altered Italians’ perception of Russia. At the beginning of 2021, only 22% of Italians regarded Russia as an opponent, whereas today, 54% perceive it as such – a sentiment shared by many other European countries.

As a declining middle power heavily reliant on the United States for security, Italy is concerned about the ongoing transition in the global order. Italy primarily seeks to slow its decline for fear of losing relevance, opportunities, and prestige in the new landscape.

Having greatly benefited from the liberal, Western-led global order for the past seven decades, Italy recognises the potential for diminished influence amidst the global power shift. Consequently, Italy aims to press the “pause” button on the current evolution of the international order.

However, Meloni’s approach appears rooted in realism, as she believes Italy cannot maintain an ambiguous stance without making a clear choice.

The Italian government seems prepared to compensate for its potential exit from the agreement with China by assuring Beijing of stable relations.

Simultaneously, it seeks to foster a broader relationship with the Global South, primarily focusing on the Mediterranean and Africa.

To this end, the government has introduced the concept of a “Mattei Plan,” named after the founder of the energy company ENI, which aims to establish relations with emerging countries on a new, equitable basis – similar to Mattei’s efforts in the 1950s.

It remains unclear how this flagship plan will align with other European initiatives or the available funding. Nevertheless, it appears to be an attempt to carve out a space for action in line with Italian interests, moving beyond pure Atlanticism – and contributing to a new globalisation, new interdependence.