Italy's new PM Meloni makes her first foreign trip to EU hub Brussels


© Reuters. FILE PHOTO: Italy’s newly elected Prime Minister Giorgia Meloni looks on during the swearing-in ceremony at the Quirinale Presidential Palace, in Rome, Italy October 22, 2022. REUTERS/Guglielmo Mangiapane/File Photo

By Gabriela Baczynska

BRUSSELS (Reuters) – Georgia Meloni is making her first foreign visit as Italy’s prime minister on Thursday to the heart of the European Union, a trip welcomed by officials from a bloc wary that her election promises could destablise the economy.

Known for her firebrand nationalism, Meloni has toned down her anti-European rhetoric, drawing a cautious sigh of relief from the 27-nation EU.

With Russia’s war against Ukraine and the related energy, inflation and economic crises topping the European agenda, Meloni will meet EU leaders in Brussels from 1500 GMT.

“Choosing Brussels for her first visit abroad is a good sign and shows the commitment of the new government to keep Italy at core of the European decision making,” one EU official said.

Meloni is due to meet EU chairman Charles Michel as well as the heads of the European Parliament, Roberta Metsola, and of the EU executive European Commission, Ursula von der Leyen.

“Her coming here sends an important message in terms of support for Ukraine,” said another EU official, noting how Meloni has defended Ukraine since Russia launched its invasion last February, and has supported sanctions against Moscow.

FISCAL GAP

The bloc remains uneasy, however, about Meloni’s campaign promises of cutting taxes and raising social benefits, fearing that would risk destabilising Italian finances as the continent faces a new recession.

“We will be looking for signals that she would not ruin Italian finances,” said a third EU official. All three spoke under the condition of anonymity.

The first test for Meloni comes as she presents new public finance targets for Italy on Friday.

That will require walking a line between plans to shield consumers from soaring energy prices on the one hand, and the Italian Treasury’s forecast of an economic contraction until the second quarter of 2023 on the other.

Meloni is likely to discuss Italy’s budget and the upcoming reform of the EU’s fiscal rulebook in Brussels, as well as spending some 190 billion euros earmarked for Italy from the bloc’s stimulus to help economies heal from the COVID pandemic.

Analysts said Meloni would seek a balance between building her international credentials and winning fiscal leeway.

“There is a risk on the fiscal side. But she’s also sent more moderate messages recently. Meloni will try to appear aligned on Ukraine and Russia, and moderate on finances,” said Gregory Claeys of the Bruegel EU think-tank.

Francesco Galietti of Rome consultancy Policy Sonar said Meloni had to position herself vis-à-vis top EU powers Germany and France, each keen to have the bloc’s third economy on their side amid rifts over addressing the energy crunch.

“She needs to leverage this status and extract some concessions in terms of fiscal leniency from the EU, as she prepares to hike the budget deficit for this year,” said Galietti.