When Italy’s Giorgia Meloni took over as prime minister in 2022, the country was not in good shape. But since then, the economy has rebounded in a way that few outsiders could have expected. Today, the country appears in better health than Germany or France, the world’s two largest economies. European Union.
In 2022, the Italian deficit stood at 8.1% of GDP, according to Trading Economics. Unemployment in December 2022 was 7.9% and inflation exceeded 12%.
“Italy was experiencing a social and economic crisis created by the rise of illegal immigration,” Daniel Lacalle, chief economist at Madrid-based investment firm Tressis, told FOX Business. “Mainstream social democratic politicians have largely ignored this problem because they have not suffered from it, [but] The middle class in Italy supports Meloni because she has put an end to this problem which has caused significant levels of social and economic distress.
TRUMP ADMINISTRATION REDUCES PROPOSED TARIFFS ON ITALIAN PASTA MAKERS AFTER REVIEW
Italian Prime Minister Giorgia Meloni speaks to the press on June 8, 2023 in Rome, Italy. (Simona Granati – Corbis/Corbis via Getty Images / Getty Images)
Things changed at breakneck speed after Meloni took office. “Confidence has returned and the economy has responded,” Edmondo Cirielli, Italy’s deputy foreign minister, told FOX Business. “It enjoys stronger budgetary discipline, a record employment rate and a government, once again, considered reliable by international markets.”
The government is not alone in saying it has succeeded. The data shows this too. The deficit fell to about 3.1% last year, inflation fell to 1.1% in November and unemployment fell to 6% in October.
In many ways the policies were similar to those instituted by American President Ronald Reagan in 1981. Reagan succeeded in transforming conservatism from an identity movement into a credible leading force. Meloni did the same. She has not abandoned her roots; it made them compatible with the responsibility to govern and with international dialogue, Cirielli said.
Meloni is also a close ally of President Trump.
U.S. President-elect Donald Trump meets with Italian Prime Minister Giorgia Meloni at Mar-a-Lago in Palm Beach, Florida, United States, January 4, 2025. (Italian government/handout via REUTERS/Reuters Photos)
Not everyone is convinced that Italy’s policy will work. “I’m not as optimistic as others,” Marc Chandler, chief market strategist at Bannockburn Global Forex, told FOX Business. A significant problem is that the country’s population is constantly declining, like that of many other European countries. “The lack of births influences me on long-term growth.”
Deputy Foreign Minister Edmondo Cirielli, with Italian Prime Minister Giorgia Meloni, during an electoral campaign meeting on November 14, 2025. (Marco Cantile/LightRocket via Getty Images / Getty Images)
GERMAN CHANCELLOR HOPES US TO CUT TARIFFS, SAYS ‘BEST THING FOR MUTUAL WEALTH’ IS OPENING OF MARKETS
Cirielli says the government is working to solve the demographic challenge. “Italy experienced its own baby boom after World War II. This generation rebuilt the country, fueled the economic miracle of the 1950s and 1960s and supported the welfare system for decades,” he said, adding: “Meloni starts from the same understanding: without families and children, there is no growth or a sustainable welfare state. This is why the government focuses on birth rates, employment and support for families.”
Chandler also worries that some of Italy’s success has been fueled by European Union funding and may not be sustainable. In essence, what will happen if the EU stops sending money to Italy?
EU flags fly in front of the headquarters of the European Central Bank (ECB) in Frankfurt, Germany, July 18, 2024. (Jana Rodenbusch/File photo / Reuters)
Cirielli is not worried. “European funds have helped, but they are not the reason for the success,” he says. “The Marshall Plan did not work just because of the money itself, but also because there were governments capable of using it effectively. This is what is happening in Italy today.” He thinks that with credible leadershipthese funds can be transformed into better infrastructure, innovation and employment. “The funds should be treated as investments,” he said.
CLICK HERE TO DOWNLOAD THE FOX NEWS APP
There are also rumors around the world that more countries will want to leave the EU, following Britain’s so-called Brexit earlier this decade. However, Cirielli responds that no, Italy will not fare better outside the EU.
“The United States has never left NATO when something was not working; it has chosen to lead and reform it from within. Meloni applies the same principle to the European Union. Leaving is not a serious option; reforming it is.”
