Meloni’s Momentum vs. Macron’s Malaise: The Importance of Political Leadership

There was a time when the stereotype was simple: Italy was Europe’s perennial bad boy, staggering from one debt crisis to the next, its governments disintegrating before the ink on their investiture orders even had a chance to dry. France smiled in the radiance of its assumed stability—the Gaullist Constitution of 1958 gave her president a somewhat authoritative executive power; she enjoyed a solid fiscal situation and a tradition of centralism that, allied with an almost monarchical presidency, kept the chaos of the earlier 4th Republic at bay. 

How quickly fortunes shift: as reported by TradingEconomics.com, the yield on the Italian 10-year government bond is now within close vicinity of the yield on the French equivalent; as of September 29th, the Italian bond paid 3.575%, while the French yield was 3.542%. Now it is Italy, led by Giorgia Meloni, that exudes composure and credibility, while Emmanuel Macron is in charge of a nation careening towards chaos, its institutions unraveling, its finances hanging by a thread, and its society on fire. It is France, now, that seems on the hedge of its own “Anni di piombo.”.

The numbers speak for themselves. Italy, whose deficit was once shorthand for fiscal extravagance, is set to return to European budgetary discipline. The Rome budget for the current year is a deficit of nearly 3.3% of GDP, well on the way to the levels demanded by Brussels. France, by contrast, is looking at an astronomical 5.5% fiscal hole this year, with promises of adjustment pushed back to 2029, so far in the future as to sound utterly irrelevant. Investors now give French bonds the same risk category as Rome’s. Fitch’s downgrade of France and upgrade of Italy only served to ratify what the markets had already divined: France is cracking, while the former ’sick man’ of Rome is being prodded onto his feet.

And yet the about-face cannot be accounted for on economic grounds. Leadership matters—it is here that the gulf is most brutal. Meloni, who was previously derided as a parochial and inexperienced nationalist, has illustrated discipline and grit that Italy lacked for generations. She has kept her coalition together, managed Brussels without capitulating to it, and offered a sense of stability rare in Italian politics. In doing so, she has restored a measure of self-assurance—domestic and global—that Italy had lost to decades of revolving-door premiers and technocratic caretakers. It is no wonder Italians are pleased.