The EU was founded by (then divided) Germany, France, Italy, and the six Benelux and their joint aspirations were articulated in the (1957) Treaty of Rome (recall here and here). I treat these EUsix as the core. Without wishing to belittle the contributions of the newer members (and neither to ignore De Gaulle's blockade and Thatcher's significance in the creation of the single market), the EU has always been sustained by the joint efforts of the EU core. The EU was sustained by historical memory of two world wars and a joint ethos that went beyond mere national self-interest. This shared ethos was made possible by the political dominance accross Europe and within the participating states of two transnational political outlooks, one was centered on Christian Democracy and the other on Social Democracy. These, in turn, draw on older and (in subsequent decades) revitalized liberal ideas.
With the Italian election results, it's now official that Social Democracy has collapsed in core Europe. Its future survival now depends on its finding charismatic and talented local leaders who can win elections on personality. Christian democracy has also retreated, but its retreat has been masked by its dominance in Germany. In France its collapse may be temporary because its main vehicle, the UMP, underperformed due to corruption scandal surrounding its Presidential frontrunner. There is historical irony in that Christian Democracy has outlasted Social Democracy because it was long thought by self-confident socialists that history was on their side. Here I take the joint (near) collapse of these movements for granted.
Italy is interesting because unlike the other five core countries, it has stagnated economically for two decades now and has had serious decline during last decade. Of course, that masks regional differences. But it's clear the Euro has been a distaster for Italian growth. It has de facto ensured strong purchasing power for the very rich north, at the expense of growth and jobs elsewhere. This is reflected in subtly different attitudes toward the EU in the two winners of the elections. The Northern League (which is centered on the Italian north) is critical of the EU but basically wants more devolution and more direct democracy within the EU. The five star movement was once skeptical of the Euro (which made sense given its electoral strategy), but in the run-up to the election changed course and now it is somewhat unclear where it stands.
A good chunk of the aging electorate of the EU core wants to limit entry by (non EU) immigrants. Where this desire is not fueled by xenophobia and racism, it is entrenched in a nostalgic and conformist vision of homogeneous societies of the past (some other time more about this, but recall my post on the so-called Paris Statement. The problem is that this electorate also wants to maintain a generous welfare state (for them). Because of declining birth-rates, Europe's immigrants have made this possible.
Assuming that immigration will be reduced now, one risks thereby undermining the solvability of the welfare state. Europe's political class has refused to acknowledge this fact and so been unable to develop a winning program. This is not to deny that one can maintain a welfare state by other means: higher economic growth and, perhaps, taxation on the wealthy. Higher economic growth will either require more international trade or rather serious and creative economic reforms (including streamlining Italian state capacity).
Interestingly enough, the five star movement has both (and incoherently) advocated a completely new economic orientation (inspired by eclectic mix of green thought, soft/left-libertarianism, and ideas related to direct democracy) that stresses socalled degrowth and proposed a large number of rather striking macro-economic reforms (including a guaranteed income) which may start to address Italy's structural problems short of breaking up the Euro (and the collapse of the EU as an open-ended political project).
Italy has been synonymous with political stagnation for quite some time. From necessity it will now become the site of political experimentation. The rest of the EU will watch closely. If Italian political and economic modernization fails, it is now foreseeable that the Core of the EU will fracture and, thereby, the EU will risk collapse (with some kind of Northern grouping remaining).
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