Matteo Salvini speaks at the annual Northern League Meeting Pier Marco Tacca/Getty Images

The Populists’ Euro

It is not hard to imagine that if Italy's new government proceeds with its ambitious fiscal plans, instituting both a flat tax and a universal basic income, it could blow up the budget deficit. In that case, Italy could quickly find itself out of the eurozone and ring-fenced by capital controls, whether the government intended this or not.

BERKELEY – The majority of Italians want two things: new political leadership and the euro. The question is whether they can have both.

The point about new leadership is uncontroversial. The country’s two ruling populist parties, the League and the Five Star Movement (M5S), together commanded 50% of the vote in the March 4 general election, and, as a result, have majorities in both houses of parliament. Their majorities may be slim, but the election, in which the main center-right and center-left parties eked out just 33%, was a resounding repudiation of the status quo.

The second point is less well known, but even less controversial: recent polls show that 60-72% of Italians favor the euro. Some believe the single currency safeguards their savings, while others regard it as an emblem of Italy’s status as a founding member of the European Union. But if motives differ, the balance of public opinion does not.