The greatest threat to the EU lies in Italy, a country on the edge
Back in January, Italy’s deputy foreign minister Mario Giro warned that the UK was entering into an economic ‘cold war’ with the European Union. More recently, Italy’s deputy finance minister Enrico Morando played down fears that Brexit would have disastrous consequences. The problem is, Brexit and any stumble in the UK’s economic fortunes will put pressure on the Italian economy.
When the UK leaves the EU, Italy faces the prospect not just of increased contributions to the EU budget, but potential barriers to the UK market, upon which it is reliant for exports. Already the UK is experiencing sluggish wage growth and increased costs of living. Along with the weakness of the pound, Brexit-shaped pressures will impact upon Italian businesses.
If anything, Italy’s precarious position provides good reasons to hope that the EU will push for a sensible Brexit deal that preserves the frictionless trading between the UK and countries like Italy. Brexit may not be the EU’s greatest problem, but indirectly Britain’s desire to leave the EU puts pressure on the real problem facing the European project.