The Italian Compass - #1/2025
Making sense of Italian foreign policy, domestic politics, and economic risk
Welcome to the inaugural issue of “The Italian Compass”, a weekly newsletter dedicated to analyzing Italian foreign policy, domestic politics, and economic risk. This week, we obviously focus on the liberation of Cecilia Sala and its political implications. But that’s not all—this issue also analyzes other topics ranging from Salvini’s political ambitions to the potential impact of soaring energy prices on Italy’s inflation in 2025.
In the “Briefs” section, you’ll find two short analyses: one on Italy and the IMEC project, and the other on its evolving defense ties with Niger.
Happy reading!
Dario
Summary
From Victory to Challenge: How Sala’s Liberation Marks Meloni’s Triumph, and a Potential Trouble Ahead.
Getting the Balance Right: The Relationship between Meloni and Tajani.
Salvini: ‘The Viminale is on my mind.’ And no one else’s, apparently.
The Bittersweet Reality of Italy’s Inflation: Watch Out for Global Energy Prices in 2025.
Briefs
Italy and IMEC: Time to Appoint a Special Envoy?
Is Italy Niger’s western anchor?
From Victory to Challenge: How Sala’s Liberation Marks Meloni’s Triumph, and a Potential Trouble Ahead
The Fact(s):
Safe and sound, journalist Cecilia Sala returned to Italy on January 8, 2025, after spending three weeks in the infamous Evin Prison in Iran. At Rome’s Ciampino airport, she was greeted by her boyfriend, journalist Daniele Raineri, and her parents, before being welcomed by Prime Minister Giorgia Meloni, Foreign Affairs Minister Antonio Tajani, and the mayor of Rome, Roberto Gualtieri.
The Analysis:
Politically, this has been a complete success for Giorgia Meloni. The President capitalized on the initial uncertainties of Foreign Minister Antonio Tajani - who initially assured that Ms. Sala was being treated decently, a claim contradicted by Ms. Sala’s mother a few days later - to centralize the management of the case and the related media attention around herself. A gamble - partial, but still a gamble -principally because it was clear that the arrest was orchestrated by a group of predominantly radical pasdaran and that there was no unified stance within the Iranian establishment — a regime notoriously fragmented and internally particularly diverse — on how to handle this situation. As such, there was no guarantee that the situation could be resolved so quickly and with such a positive outcome.
The trip to Mar-a-Lago likely helped mitigate, if not entirely eliminate, the risk on the American side, from the incoming administration, regarding the eventual lack of extradition of Mohammad Abedini Najafabadi, the Iranian engineer detained at Malpensa Airport on December 16 at the request of the United States and currently imprisoned in Opera. Furthermore, President Meloni managed to resist the pressure coming from a significant portion of the Italian public, largely anti-American regardless of being on the Right or the Left, which pushed for this incident to turn into Meloni’s own “Sigonella Moment” - a momentary assertion of national pride over the Americans. However, such a move would have had repercussions, not only with the outgoing, Democratic administration but also with the incoming, Republican one, and despite Trump and Meloni’s personal ties.
From this perspective, Meloni played all her cards correctly and achieved a victory across the board. Both allies and adversaries acknowledged her central role and ability to manage the case. Tajani and his popularity were slightly hit; the appearance at Mar-a-Lago with Trump, Rubio, and other members of Trump’s cabinet definitively dashed Salvini’s ambitions to position himself as Trump’s favored Italian interlocutor in the coming months (making his eventual presence at the inauguration useless from this point of view). Meanwhile, the opposition - both political and media - came out looking bad. Matteo Renzi’s criticisms or Corrado Augias’s rebukes, just to mention a few, further fueled the perception among some of the public opinion that opposition leaders and opinionists are both self-referential and weak.
What’s Next:
Paradoxically, it is likely that things may now become a bit more complicated for President Meloni. Support for the Prime Minister and her party, although experiencing a slight decline, remains particularly significant, especially when compared to the approval ratings of other parties in previous governments at similar stages. The political and media success in managing the Sala case will likely strengthen both the President and Fratelli d’Italia, and this will inevitably lead to tensions with her allies - Forza Italia and the Lega - who will inevitably seek to differentiate themselves on both domestic and foreign issues to prevent the President’s and her party’s strength from evolving into full hegemony in the coalition. Meloni, thus, will need to manage this likely development.
Getting the Balance Right: The Relationship between Meloni and Tajani
The Fact(s):
After the release of Cecilia Sala, Foreign Minister Antonio Tajani sought to downplay the controversies, speaking of a “great team effort.” However, tensions have indeed existed, and in recent months there have been numerous moments of friction between President Meloni and her centrist ally. These range from the Senate Budget Committee’s vote against the government on the amendment proposing to lower the RAI license fee to disagreements over the so-called Ius scholae. Other points of contention have included issues surrounding the outgoing Raffaele Fitto’s delegations, the recent Cecilia Sala kidnapping, the resignation of the chief of the Department of Information for Security (Dipartimento delle Informazioni per la Sicurezza - DIS) Elisabetta Belloni - who had her own disagreements with Tajani—and Meloni’s surprise trip to Mar-a-Lago.
The Analysis:
Managing the relationship with Tajani and Forza Italia is likely the actual keystone for ensuring the government’s stability. The Foreign Minister leads the centrist and moderate pillar of the coalition, Forza Italia, a party many had written off after Berlusconi’s death but which has now emerged as the second strongest in terms of support within the government. Meloni faces a delicate balancing act in her dealings with Tajani: on the one hand, Forza Italia must remain strong to keep the Lega in check; on the other, a Forza Italia that becomes too strong could become a problem, as it might push some members of the party to consider aligning elsewhere. As demonstrated by President Meloni’s harsh words against former Prime Minister Romano Prodi last December, there are only a few political maneuvers she truly fears – and one of them is the creation of a significant centrist force within the Italian political landscape.
Furthermore, while President Meloni needs no support in her relationship with Trump’s America, the European situation is entirely different. Without the backing, influence within the European People’s Party, and the extensive network Tajani has cultivated during his two decades in Brussels, Meloni’s position in Europe would be far more precarious. This is an element many in Italy overlook or ignore, particularly in the centre-right, which by tradition and definition is less focused on European dynamics. However, anyone familiar with the halls of European institutions knows that Tajani enjoys a robust reputation in that environment. Without his involvement, it’s unlikely President Meloni could have achieved what she did with the new European Commission, especially given the politically difficult position she found herself in after the European elections, despite her victory in Italy
What’s Next:
Over the coming months, Forza Italia will have plenty of opportunities for differentiation: from regional elections to economic decisions, European dynamics, and the impact of a Trump presidency on global affairs, there will be no shortage of opportunities to challenge Meloni. That being said, Tajani, like many others within Forza Italia, has no immediate interest in breaking with President Meloni. From this perspective, any differentiation will likely be managed within limits that will not lead to any structural rupture. That said, unlike the Lega, Forza Italia has more options and could, in theory, look elsewhere. For this reason, President Meloni and Fratelli d’Italia will also seek to manage the relationship carefully, aiming to avoid reaching a breaking point. At the same time, they will be careful not allowing Forza Italia to grow too strong, as this development could upset the delicate balance within the coalition.
Salvini: ‘The Viminale is on my mind.’ And no one else’s, apparently.
The Fact(s):
Last December, the judges in Palermo acquitted Matteo Salvini of charges of kidnapping and refusal to perform official duties related to the case of the Open Arms ship, which was stranded at sea in August 2019 with 147 migrants on board. The Palermo Prosecutor’s Office, and later the Ministers’ Tribunal, had accused him of violating national and international law. Following his acquittal, Salvini spoke of a possible return to the Viminale as Minister of the Interior in 2025, stating that he had already performed the role of Minister of the Interior well in the past. This self-nomination does not appear to thrill Giorgia Meloni though, who wants to avoid both a major cabinet reshuffle and giving Salvini a position he could politically leverage to siphon support from Fratelli d’Italia.
The Analysis:
As human beings, we tend to return—at least, we maintain the ambition to do so—to the places where we have been happy. This saying seems to apply to Matteo Salvini as well, at least politically: the Viminale was the place from which Salvini propelled the nationalist and sovereignist Lega to a staggering 34.3% in the European elections of 2019; it was the place from which he siphoned political support from the inexperienced grillini during the yellow-green populist government; and it was the place where he could even conduct his own foreign policy, firing shots at France and Germany, working to align Italy with the Visegrád Group, and trying to foster friendly relations with Putin’s Russia—all while taking advantage of the weakness of then little-known Prime Minister Giuseppe Conte and the technocratic role of then Foreign Minister Enzo Moavero Milanesi. In short, for Salvini, the Viminale would be the ideal platform from which he hopes to launch his political comeback.
However, the situation is very different from 2018/2019. The current Minister of the Interior, Matteo Piantedosi, after some initial hesitation, is becoming less of a technocrat and more of a politician. The half-hearted attempt to float his name as a candidate for governor of Campania failed to gain traction. Giorgia Meloni, for her part, wants to avoid major upheavals or significant cabinet reshuffles, and giving the Viminale to the leader of what is now the third party in the coalition would set off mechanisms that could quickly spiral out of control. Furthermore, Salvini’s bid to establish himself as Trump’s primary Italian political connection has also basically collapsed, definitively undercut by Meloni’s trip to Mar-a-Lago.
Salvini’s room for maneuvering remains remarkably limited, both internally and externally. Moving further to the right is not currently viable, and a convincing pivot to the center is both unlikely and impractical.
What’s Next:
Salvini will try, within the limitations of his currently restricted political space, to create some headaches for the Prime Minister. The electoral base of Fratelli d’Italia is the only source from which the Lega can draw support to regain strength. Salvini and his allies will continue to distance themselves on the issue of support to Ukraine, at least rhetorically, but at the moment, the Minister of Transport does not have the strength to undermine the government’s Atlanticist loyalty.
Of course, if the Trump administration were to take a less pro-Ukrainian stance than expected, it might create slightly broader maneuvering room. However, in that scenario—if the United States were to significantly pull back from supporting Kyiv—it is likely that many European governments, including Italy’s, would follow suit. Consequently, even then, using the Ukraine issue as a means to distinguish himself would remain difficult.
Salvini’s maneuvering space, especially while remaining in the government, will be very constrained. In fact, from this perspective, rather than focusing on how to recover support to compete with his coalition allies/rivals, he will need primarily to watch out for internal challenges—from figures like Roberto Vannacci to northern factions pushing for a return to the Lega’s traditional version, tied to the northern territories.
The Bittersweet Reality of Italy’s Inflation: Watch Out for Global Energy Prices in 2025
The Fact(s):
According to Istat, Italy’s headline inflation remained stable at 1.3% in December 2024, while core inflation slightly declined to 1.8% (down from 1.9% in November). Weak demand for fresh food, durable goods, and services (which stood at 2.6% in December) contributed to slowing inflation, helping to offset upward inflationary pressures from regulated energy goods and a slower-than-expected rate of disinflation for non-regulated energy goods
The Analysis:
While the stability of inflation at the end of 2024 was a positive development, certain factors suggest that the outlook for the coming months may be less optimistic than it seems. The base effect on energy goods is fading, and gas prices are increasing. Consequently, downward inflationary pressure remains primarily limited to demand-side factors, with weak domestic demand being further exacerbated by low consumer confidence stemming from sluggish wage growth and ongoing uncertainty.
In this context, the fact that upward inflationary pressure largely stems from exogenous factors, such as energy prices, highlights the limited effectiveness of tools available to mitigate the impact of these external influences. Inflation in Italy is projected to easily reach 2% by the end of 2025, but there is also a risk that upward inflationary pressure could accelerate and intensify, driven by global geopolitical and trade tensions and disruptions.
With Donald Trump's new American administration set to take office on January 20, 2025, the risk of a sudden escalation in global energy market volatility is significant. Addressing the Middle East crisis, Trump stated that if hostages are not released before January 20, “all hell will break out.” From this perspective, the Trump administration’s actions on Iran - both in terms of military intervention and sanctions - will be crucial. Rising military tensions in the Middle East will inevitably drive global energy prices higher.
Although Trump’s policies are expected to lower energy prices in the longer term—potentially through a more favorable approach to the oil and gas industry and the rollback of some pro-environmental legislation introduced under the Biden administration - these potential benefits are unlikely to materialize before 2026. Additionally, breakeven prices for American oil producers remain substantial. In 2025 and 2026, U.S. oil producers will require prices of approximately $70 per barrel and $67 per barrel, respectively, to drill new wells cost-effectively, up from $64 per barrel in 2024. Finally, trade uncertainties - driven by the potential imposition of tariffs and other protectionist measures - are adding further layers of instability to the economic and inflationary outlook.
What’s Next:
The economic outlook for Italy in 2025 appears challenging. Germany’s struggles are having a negative impact, particularly on the manufacturing sector. Export demand is expected to slow down in 2025, meaning Italy’s growth will rely primarily on maximizing the use of EU recovery funds and bolstering private consumption.
However, higher-than-expected inflation could undermine both drivers of growth, reducing household purchasing power and increasing the costs of projects funded by the PNRR (Italy’s National Recovery and Resilience Plan). A sharp rise in energy prices would exacerbate these issues, severely impacting real wages and spending capacity. Such a scenario would inevitably fuel public discontent and place significant pressure on the government.
Briefs
Italy and IMEC: Time to Appoint a Special Envoy?
Last December, the Indo-Pacific Committee of the Italian Parliament concluded its work. The committee’s chief political advocate, Paolo Formentini - Deputy Chair of the Foreign Affairs Committee in the Chamber of Deputies and a Lega MP -highlighted how the committee’s efforts have produced a clear vision of the challenges and opportunities linking the expanded Mediterranean and the Indo-Pacific. These two areas intersect in what is increasingly referred to in Italy as the “Indo-Mediterranean,” a region expected to play a central role in the development of the so-called India-Middle East-Europe Economic Corridor (IMEC). This ambitious infrastructure project, whose geopolitical substance is also particularly significant, aims to redefine connectivity between India, Europe, and the Middle East, rivalling China’s promoted Belt and Road Initiative (BRI).
Formentini himself had previously pushed for a resolution urging the government to appoint a special envoy for IMEC. France, for instance, already has one: Gérard Mestrallet, a well-connected veteran of the energy industry and President Macron’s Special Envoy, appointed in February 2024. Mestrallet recently visited Washington for talks on the project. Italy should follow suit.
Potential candidates? I can think of three:
Francesco Talò or Vincenzo De Luca if a career diplomat is preferred - both seasoned ambassadors of great renown and extraordinary skills.
Alternatively, for a more political appointment, Paolo Formentini himself could be an excellent choice.
The Lega needs a new, focused foreign policy initiative to champion - something that can serve the party as a flagship project, far removed from the Eurasian temptations of some of its members. IMEC could also provide a unique platform for fostering economic relations with emerging partners like India and Gulf nations, to the benefit of northern Italian economic groups. Formentini, who enjoys bipartisan respect and has a strong foreign policy pedigree, could be a fitting choice to take on this role.
Italy must act swiftly if it wants to be a serious and relevant player in IMEC. Appointing a Special Envoy might be the first step in this direction.
Is Italy Niger’s western anchor?
In December 2024, Italy hosted the fourth edition of the Bilateral Staff Talks in the defense sector with Niger, which took place in Rome. During the meeting, the Italian Defense General Staff emphasized how Italy considers Niger to be “a key player in Africa’s geopolitical balance, particularly with reference to the Sahel region.” The Nigerien delegation, led by Brigadier General Sani Kache Issa, Secretary General of the Ministry of National Defense, also met with the recently appointed Chief of the Defense Staff, General Luciano Portolano—further underscoring the strategic importance Italy attributes to the country.
Italy remains committed to continuing bilateral cooperation and aims to strengthen and support Nigerien defense capabilities. At the conclusion of the talks, the parties signed the 2025 Cooperation Plan, which includes 11 activities - five to be carried out in Italy and six in Niger.
Since the coup d’état that ousted President Mohamed Bazoum in August 2023, Niger has severed ties with many Western countries, primarily France and the United States, while deepening its relations with Russia. However, Italy remains the only Western country still engaged in military cooperation with Niamey. This ongoing collaboration demonstrates that, despite numerous challenges, Italy has managed to maintain this relationship and should continue to support Niger—not only because of its strategic role in the Sahel but also to prevent the country from relying solely on diplomatic alternatives such as Russia. These days, this aspect is even more significant, as Moscow’s struggles in Syria could weaken its capacity to project influence in Africa.
If you have criticisms, comments, or questions, either on the newsletter or the Politica Estera Substack project, feel free to contact me here: