Another Brexit-Size Shock to the EU?

It finally happened. A government is on the verge of being formed in Italy.

Italian parliamentary elections took place on March 4, followed by round after round of inconclusive negotiations. The main sticking point for the top vote-getting party, the Five Star Movement (M5S), was the center-right's insistence that Silvio Berlusconi be prime minister.

Once the League's Matteo Salvini agreed to sideline the octogenarian -- the League is the real power of the center-right coalition, not Berlusconi's Forza Italia -- things got cooking; that, and president Sergio Mattarella threatened to name a technocratic caretaker government.

The League-M5S plan has been published, and it has two components that are sure to stir things up: an end to the EU sanctions on Russia and an increase in debt spending. RT crows, "Italy’s anti-establishment Five Star Movement and Lega Nord parties have called for an immediate lifting of sanctions imposed on Russia." Reuters outlines other features of the plan:

The document, published after 11 weeks of political stalemate in the euro zone’s third-largest economy, calls for billions of euros in tax cuts, additional spending on welfare for the poor, and a roll-back of pension reforms.

The euro sank on the latest developments on Friday and was headed for its fifth straight weekly fall against the dollar, in what would be a first for the currency since 2015.

The possibility of a eurosceptic government in Rome is shaking investor confidence ... at this point, a larger fiscal deficit and greater bond issuance (in Italy) does seem likely,” said David Madden, a strategist at CMC Markets.

The euro gave up gains and fell 0.2 percent to $1.1778 after the Italian parties outlined their economic plans. It settled near a five-month low reached on Wednesday of $1.1763.

The final accord dropped a previous draft proposal, seen by Reuters, to create fiscal headroom by adjusting the formula used to calculate debt burdens in the EU, and contained nothing questioning Italy’s membership of the euro.

But it still called for a review of EU governance and fiscal rules — setting the stage for the bloc’s biggest political challenge since Britain voted to leave two years ago.

So we're right back to back to Syriza 2015 and the question of whether a nation-state can change course through democratic elections or is the status quo so cemented in place that nothing short of armed rebellion can alter the neoliberal Washington Consensus.

The neoliberals are pining for Mattarella to take control, which Politico encapsulates here:

What role does the president play?
If the deal passes muster with members, the parties will present it to President Mattarella. As guarantor of Italy’s constitution and international treaties, he has the power to approve or reject ministers and even specific bills in the government’s program if he deems them to be unaffordable. He can even reject the coalition government altogether and appoint his own — a power that has been used once before, in 1953.

M5S's Luigi di Maio and Salvini are going to meet with Mattarella Monday. M5S members are currently voting online whether to support the new government. The candidate for prime minister has yet to be named.

Signs are good that an M5S-League government will be the real deal. Reuters says that, "Salvini’s pre-election ally, former prime minister Silvio Berlusconi, accused him of betraying their centre-right electoral alliance and urged him to back out of the deal with Di Maio and 'come back home'."

The U.S. is already making threats about upending Russian sanctions. From Politico:

In June, the European Council will have to roll over the Russian sanctions that the two parties strongly oppose. Last month Kurt Volker, U.S. President Donald Trump’s special envoy for Ukraine, warned Rome that “Italy cannot lift the measures without serious consequences.”

An outbreak of European democracy comes just at the right time. The U.S. is trying to maintain the Continent's vassalage as Trump lurches from brinkmanship in East Asia to the Middle East.

The Washington Consensus is now clearly held together by nothing other than war -- economic warfare, armed conflict, genocide and information war. May the consensus collapse as soon as possible.