Irony alert: Farage could be the biggest loser if Le Pen and Wilders manage to form a new anti-EU group in the European Parliament

Belonging to a group in the European Parliament matters. Groups receive money on top of individual MEPs' allowances and are given additional group staff. It also boosts chances of representation on committees (where EU laws are discussed and amended before they are put to a vote in the plenary).

Therefore, the prospect of Marine Le Pen, the leader of France's Front National (FN) and Geert Wilders, the leader of the Dutch Freedom Party (PVV), forming a new anti-immigration, anti-EU group in the next European Parliament is causing some distress around Europe. When this was last attempted - with the so-called Identity, Tradition, Sovereignty (ITS) group - it quickly fell apart. The Greater Romania Party (PRM) didn't quite approve of Alessandra Mussolini - the granddaughter of you-know-who - labelling Romanians "habitual law-breakers" and thus withdrew from the group. Rather telling.

So will Wilders and Le Pen succeed to unite parties that, per definition, don't always like each other? According to EU rules, 25 MEPs from at least a quarter (seven) EU member states are needed to form a group.

By our count, at least four more parties from as many EU countries look willing to join forces with FN and PVV: Italy's Lega Nord (who currently sits in the same group as UKIP), Belgium's Vlaams Belang, the Austrian Freedom Party (FPÖ) and the Sweden Democrats (whose leader today said they are considering joining). This leaves FN and PVV only one party and country short.

This could be filled by, for example, the Slovak National Party (SNS) - which is pretty hardcore, and currently sits with UKIP. Bulgaria's Ataka would probably also be quite keen to join, though Le Pen recently called the party "the real extreme right" (not meaning it favourably). Greater Romania may struggle to reach the 5% national threshold needed to win seats in the European Parliament, but could be another possibility.

The Danish People's party has said it won't join the group, while Greece's Golden Dawn and Hungary's Jobbik seem to be off-limits for everyone.

So this might come down to the wires. An interesting twist, though: if Le Pen/Wilders succeed, this could mean problems for Farage. UKIP currently sits in the Europe of Freedom and Democracy (EFD) group - which includes 31 MEPs from twelve different countries, but:

• Farage could lose several MEPs from Italy, with Lega Nord joining FN and PVV, and the other Italian, Magdi Cristiano Allam, standing for re-election with a different party (Fratelli d'Italia);
• The Slovak National Party might join the Le Pen/Wilders group in the end;
• The (True) Finns are talking to the European Conservatives and Reformist (ECR) group, where the UK Conservative Party sits;
• The two Greek MEPs in UKIP's group are from LAOS - a party which is currently polling below the national threshold of 3%. This means their re-election is not certain;
• In addition, seven out of twelve EU countries in UKIP's group are currently represented by only one MEP.

So Farage could need both new parties, additional MEPs and more countries to be able to set a group after May's European elections. And if not managing a group of his own, where will he go? Will he reconsider his decision not to join forces with Marine Le Pen, something he ruled out in the past  when he said UKIP and FN are from "completely different political traditions and background"?

What is clear is that the formation of political groupings in the European Parliament will be a messy affair - and then we haven't even begun to discuss the ECR...

Italian elections: The scandal-watch

Election season means scandal season in Italian politics. Less than two weeks to go to the elections, and a number of scandals are surfacing on the Italian peninsula (not entirely coincidental we think) which could undercut support for the 'establishment' parties in particular - and possible give comedian-cum-politican Beppe Grillo a boost.

Support for the centre-left Democratic Party has been dropping over recent weeks in part due to the big derivatives scandal involving Italian bank Monte dei Paschi di Siena - an institution with historical links with the local government in Siena, in the hands of the centre-left for years.

Two more scandals erupted over the past two days. Raffaele Fitto, a former Italian minister and a top member of Silvio Berlusconi's PdL party, has been sentenced to four years in prison for corruption, illegal financing of political parties and abuse of authority. This is a big blow for Berlusconi and his party, given that Fitto topped the list of PdL candidates in Italy's Southern Apulia region - of which he had previously been the Governor.

Separately, the CEO of Italy's defence giant Finmeccanica, Giuseppe Orsi (see picture), was arrested yesterday over bribery allegations relating to the sale of twelve military helicopters to India. The allegations cover the period from the awarding of the contract in 2010 - when Orsi was the CEO of Agusta Westland, owned by Finmeccanica - until December 2012. The Italian government holds about 30% of Finmeccanica's shares, and the question is whether someone within Mario Monti's cabinet knew what was going on, but failed to take appropriate action.

Orsi is also close to Lega Nord - Silvio Berlusconi's main ally. Last October, Italian daily Il Fatto Quotidiano published the transcript of a phone call between Orsi and Lega Nord leader Roberto Maroni, during which Orsi thanked Maroni for backing his appointment as CEO of Finmeccanica. Maroni has moved swiftly to deny any involvement in the story - and has threatened to sue anyone who claims otherwise. But this might still hurt Lega Nord in terms of votes.

It remains unclear if, and to what extent, these scandals will impact on the final election results. But one thing is clear: the Italian election campaign is heating up. Follow us on Twitter (here and here) for all the news and updates from Italy!    

European regionalisation: do two negatives make a positive?

As we've argued before, there's a lesson for the eurozone to learn from the all the semi or full-blown separatist movements across Europe; trying to impose central control on an inherently regionalised structure is extremely difficult and artificially imposing a top-down identity remains as challenging as ever. At the same time, should a region choose to leave an EU county it could, after negotiations, be absorbed by the European structure, which in turn would have a stabilising effect on the tumultuous politics that will follow.

Therefore, separatist movements across Europe simultaneously showcase both the weakness and strengths of the European project. However, what's clear is that the austerity sweeping Europe is not only creating tensions between national capitals and Brussels, but also national capitals and regions. Just in case you thought the eurozone was on the verge of a agreeing a transfer union....

Belgium

The Flemish are as unhappy as ever about their domestic transfer union, and this weekend, local elections in Belgium saw the moderate Flemish nationalist N-VA party make substantial gains, using the €16bn a year that Flanders sends to the Francophone region as a political springboard. A leader in Belgian daily De Morgen notes that that the N-VA's objections to "the left-wing tax government of [Belgian PM Elio] Di Rupo don't differ that much from "the criticism in other countries of the [eurozone] solidarity mechanism which keeps the Greeks or Spaniards afloat".

Spain

In Spain, the Catalan independence movement is stepping up a notch off the back of Madrid (and Brussels) imposed austerity measures. In September, a pro-independence rally in Barcelona (pictured) mustered between 600,000 and 1.5 million people depending on whether you ask the Catalan or national police. The Catalan government has said it wants to hold a referendum on independence, with a majority of Catalans in favour according to some polls. A motion to permit a referendum was voted down by a majority in the Spanish lower house and could trigger a constitutional crisis if Catalan PM Artur Mas goes ahead with the plans regardless. Spanish Prime Minister Mariano Rajoy has said holding a referendum without the central government's approval would violate the Spanish Constitution.

Italy

The Lega Nord party has been calling for the separation of Italy's northern regions from the rest of the country. Possibly the main difference between the Italian case and the others, is the fact that the geographical entity evoked by Lega Nord (the so-called 'Padania', including all the regions above the Po river) has never existed as an independent state. Furthermore, Lega Nord has usually been more or less aggressive in its pro-independence claims depending on whether the party was in government or in opposition. Nonetheless, many northern Italians do feel that too big a chunk of the taxes they pay is then used to fund 'dysfunctional' Southern regions. Potentially one to watch, especially if Lega Nord (as it looks likely at the moment) will stay in opposition after next year's elections. 

Germany

While there is no talk in Germany of an independent Bavaria just yet, in July the regional government announced that it will launch a complaint at the German Constitutional Court against the German system of "Equalization payments" between richer and poorer German Bundesländer. Bavaria is the main net contributor to this system with €7.3bn, sharing the burden with only three other states - Hessen and Baden-Württemberg and Hamburg). The rhetoric of Bavarian politicians on the eurozone crisis has also been notably tougher than that of other German politicians as we've noted here. Meanwhile, a recent Bild poll found that 46% of Germans were against the separate West-East solidarity income tax levy compared with 42% in favour.

United Kingdom 

In Scotland the Scottish National Party has won its battle for a independence referendum with Scots being given a single Yes/No question on independence to be held in 2014. The prospects of Scotland becoming independent have however, in contrast to other regions, been damaged by the eurozone crisis with previously favourable comparisons with Ireland and Iceland being turned into examples of the problems of small economies with oversized financial services industries. Other questions that are beginning to be asked are whether an independent Scotland will use the euro (decreasing in popularity) or retain the pound, remain in the EU or have to have border controls. It has also been noted, including by the EU Commission, that Scotland would have to negotiate its EU membership afresh rather than opting in by default off the UK's entry in 1973.

Meanwhile in Brussels...

European Council President Herman Van Rompuy has presented a report calling for a central eurozone 'Treasury' with a shared budget and eurobonds - very close to a full-blown trasnfer union.

In Brussels, the logic seems to be that two negatives make a positive.

Lega Nord steps anti-Euro rhetoric up by another notch

Italian Lega Nord party's opposition to the euro is clearly not limited to two nostalgic MPs organising a rally where the Italian lira is used as the official currency. Call it political opportunity, but since Lega Nord is no longer in government, it has stepped up its anti-euro rhetoric by several notches.

Roberto Maroni (see picture) - the party's recently appointed Secretary General and a former Italian Interior Minister - made some very interesting remarks in an interview with La Repubblica (available here).

He said,

“At the end of August, we will submit to the Court of Cassation [Italy’s supreme court] a citizens’ initiative for a legislative proposal to hold a consultative [i.e. not legally binding] referendum on the same day as the 2013 elections, in which Italian citizens can have their say on the euro. I want to collect millions of signatures, and I can guarantee that our initiative is not an isolated one in Europe.” 

“Listening to the people is no blasphemy. In any case, it would be a consultative referendum. My objective would be for such a referendum to be held in all [eurozone] member states before the 2014 European elections. This is why I am going to meet the euro-critics in other EU member states.” 

So what would happen if the ‘no’ camp were to win (which, according to recent opinion polls, looks unlikely at the moment)? This is Maroni’s thought-provoking idea,

“New scenarios would open up. What I would like to see is a new eurozone with Northern Italy in the euro. But in order to get there, a referendum is needed first. The most important thing is that democracy should decide, not bureaucracy.” 

However, Maroni’s position sounds rather confused. On the one hand, keeping only Northern Italy in a ‘new eurozone’ would entail splitting the country first (which, by the way, remains the primary aim of some Lega Nord members). On the other hand, Maroni also seems to suggest that Italy would not face mayhem outside the single currency. He argues,

“Great Britain taught us a great lesson with the Olympics. Someone must explain to me why that country is so strong outside the euro, whereas Italy outside the single currency would be a catastrophe…Anyway, our vision is not anti-European, but neo-European. And we are the only ones who have it.” 

On a more general note about the future of European integration, Maroni said,

“The analysis [Lega Nord] made more than ten years ago turned out to be correct. Europe has failed. We are not going towards the United States of Europe envisaged by Carlo Cattaneo and Altiero Spinelli, but rather towards a single state which has all the characteristics of Hobbes’ Leviathan.” 

“I agree with what the Bavarian Minister-President [Horst Seehofer, who also featured on our blog recently] has said. People don’t want a European super-state…One thing is certain: the political union supported by the élites has turned out to be a fantasy of poets [this expression should sound familiar to the readers of our daily press summary, see here], and a denial of democracy. This [happens] because the bureaucracies rule.”

Pretty strong words to say on the Ferragosto bank holiday, with many Italians (including Mario Monti) enjoying their summer break. It is too early to say how far Lega Nord can get with this initiative. According to the Italian constitution, 50,000 signatures are required to submit a citizens' initiative - a number Lega Nord should be able to collect easily. However, the draft bill then needs to get parliamentary approval to become law - which looks much more difficult to achieve.

Nonetheless, the initiative in itself is politically quite significant. Furthermore, it will be very interesting to see how many Italians will sign up to it - we can see the number going well beyond the legally required threshold of 50,000.

The Lira is back (for a weekend)

Lega Nord has decided to treat its supporters to a bit of 'throw back' party, remembering the days when Italy used the lira as its currency. The party has organised a rally in Avio (north-eastern Italy, where else?) for this weekend, at which the lira will be used as the only official currency. Interestingly, the two Lega Nord MPs who promoted the rally - Maurizio Fugatti and Sergio Divina - have decided to officially invite Italian Prime Minister Mario Monti.

The two said in a joint statement,

“This will be the opportunity to show to the technocrats and the enlightened bureaucrats who built this Europe, including Prime Minister Mario Monti, the damages caused by the euro, which they decided to introduce sitting around a table without the people’s approval – the consequences of which the citizens are now paying every day in terms of cost of living. The need for a popular referendum is now evident, so that those who work and pay taxes can express their opinion on Europe and the euro.” 

It is the second time in only a couple of days that Italian politicians use the words 'euro' and 'referendum' in the same sentence. From the opposite side of the political spectrum, Italian comedian Beppe Grillo - whose Five Star Movement has been consistently polling at over 20% during the past few months - wrote on his blog recently,

“A referendum on the euro and the restructuring of [Italy’s public] debt is ever more necessary. See you in parliament...It will be a pleasure.” 

Neither of these parties is likely to be in government after next year's elections, and recent opinion polls suggest that a referendum on the euro would see a quite clear victory for the 'stay inside' camp. However, as we noted several times before (see here, here and here), such a change in rhetoric and the fact that cross-party support for the single currency can no longer be taken for granted in Italy is in itself very significant.