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I keep saying people who argue that Lega is pulling the plug on the government because they DO NOT want to go through the 2020 budget process. I think it is wrong, and by focusing on that you are missing the real danger. 1/
Lega is polling at 38%, 2 pp away from being able to govern alone. In a coalition with FdI (with whom it shares a lot in terms of ideology and pledges) it would have a comfortable majority buffer and none of the fractures we see today within the government 2/
In that condition, it is a piece of cake to get literally everything past Parliament. So if things stay as currently polled, and if we do vote in October, Lega will be the one that gets to pass the budget law. They are not stupid and there is no way they do not know this. 3/
The Oct. 15 EC deadline is meaningless (Spain missed it before with no consequences). The only real hard deadline is December 31st: if you get no budget passed by then, the Italian system goes into what we call "provisional budgeting" and VAT hike kicks in. 4/
So why would they do it? wouldn't any government in his right mind do his very best to avoid having to deal with a budget law that foresees an automatic VAT increase by 23bn JUST to stick with the (larger than recommended) deficit that was promised to BXL? 5/
Here's the bit you are getting wrong: the 2020 budget law is a thorny issue only if you assume that the government would want to decommission the VAT hike through lower spending, rather than through simply doing more deficit. 6/
And you would assume as much, because that is the only way a government would have to remain in decent terms with BXL, avoid a market freak-out, and the consequent kind of crisis that could easily end up pushing the country out of the single currency. 7/
But when Lega is the single (or the vastly major) party of government and Bagnai becomes finance minister, does that assumption still make sense? I doubt it. That's the part you are not seeing, and the most dangerous. (end)
