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      As Europe Piles Sanctions on Russia, Some Sacred Cows Are Spared

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      The European Union has been severing economic ties with Moscow to support Ukraine, but some countries have lobbied to protect key sectors.BRUSSELS — Eight months into the war in Ukraine, and eight rounds of frantic negotiations later, Europe’s sanctions against Russia run hundreds of pages long and have in many places cut to the bone.Since February, the European Union has named 1,236 people and 155 companies for sanctions, freezing their assets and blocking their access to the bloc. It has banned the trade of products in nearly 1,000 categories and hundreds of subcategories. It has put in place a near-total embargo on Russian oil. About one-third of the bloc’s exports to Russia by value and two-thirds of imports have been banned.But even now some goods and sectors remain conspicuously exempted. A look at just a few items reveals the intense back-room bargaining and arm-twisting by some nations and by private industry to protect sectors they deem too valuable to give up — as well as the compromises the European Union has made to maintain consensus.The Belgians have shielded trade in Russian diamonds. The Greeks ship Russian oil unimpeded. France and several other nations still import Russian uranium for nuclear power generation.The net impact of these exemptions on the effectiveness of Europe’s penalties against Russia is hard to assess, but politically, they have allowed the 27 members of the bloc to pull together an otherwise vast sanctions regime with exceptional speed and unanimity.“Ultimately, this is the price of unanimity to hold together this coalition, and in the grander scheme of things the sanctions are really working,” said Jacob Kirkegaard, a senior fellow in the Brussels office of the research group the German Marshall Fund, citing Russia’s diminished access to military technology as evidence.A Lukoil gas station in Priolo Gargallo, Italy, last month. The European Union has put in place a near-total embargo on Russian oil, but some sectors of trade remain conspicuously exempt from sanctions.Gianni Cipriano for The New York Times“We would love to have everything included, diamonds and every other special interest hit, but I am of the opinion that, if sparing them is what it takes to keep everyone together, so be it,” he added.The Ukrainian government has criticized some of the exemptions, with President Volodymyr Zelensky chiding European nations for continuing to permit business with Russia, saying they are skirting sacrifices.“There are people for whom the diamonds sold in Antwerp are more important than the battle we are waging. Peace is worth much more than diamonds,” Mr. Zelensky said to the Belgian Parliament during an address by video link in late March.Keeping Diamonds ComingThe continued success of Belgium and the broad diamond sector in keeping the Russian diamond trade flowing exemplifies the sacred cows some E.U. nations refuse to sacrifice, even as their peers accept pain to punish the Kremlin.Exports of rough diamonds are very lucrative for Russia, and they flow to the Belgian port of Antwerp, a historically important diamond hub.The trade, worth 1.8 billion euros a year — about $1.75 billion — has been shielded in consecutive rounds of the bloc’s sanctions, despite being raised as a possible target soon after the Russian invasion of Ukraine in late February.The Belgian government has said that it has never asked the European Commission, the E.U. executive body that drafts the measures, to remove diamonds from any sanctions list and that if diamonds were added, it would go along.Diamonds being sorted in Mirny, Russia, at a facility operated by Alrosa, the Russian state-owned diamond company. Russian diamonds have been shielded in consecutive rounds of European sanctions.Maxim Babenko for The New York TimesTechnically speaking, that may be true. But the latest round of penalties, adopted this month, exposed the intensive interventions when a coordination error occurred among the various services in the bloc that are involved in the technical preparation of sanctions.The incident, described to The New York Times by several diplomats involved as “farcical,” shows how the lobbying works. The diplomats spoke anonymously in order to describe freely what happened.The European Commission over the course of September prepared the latest round of sanctions and left diamonds off that list.But the European External Action Service — the E.U.’s equivalent of a foreign service or state department, which works with the commission to prepare sanctions — did not get the memo that diamonds should remain exempted and included in its own draft listings Alrosa, the Russian state-owned diamonds company.Once Alrosa had been put on the draft document, removing it became difficult. Spotting the error, Poland and other hard-line pro-Ukraine countries in the bloc dragged out the negotiations over the package as much as they could on the basis that Alrosa should indeed face sanctions.In the end, the need for unanimity and speed prevailed, and Alrosa continues to export to the European Union, at least until the next round of sanctions is negotiated. In proposals for a fresh, ninth round of sanctions, presented by Poland and its allies last week, diamonds were again included, but formal talks on the new set of penalties have not yet begun.A spokesman for the European External Action Service declined to comment, saying it does not comment on internal procedures involved in preparing sanctions.The Tricastin nuclear power plant in the Drôme region of southeastern France. France is one of several E.U. countries that depend on Russian uranium to operate civil nuclear power facilities. Andrea Mantovani for The New York TimesNuclear PowerMost exemptions have not been as clear-cut as diamonds because they have involved more complex industries or services, or affected more than one country.Uranium exported from Russia for use in civil nuclear power production falls under this category. Nuclear power plants in France, Hungary, Slovakia, Finland and other countries depend on Russian civilian uranium exports.The trade is worth 200 million euros, or about $194 million, according to Greenpeace, which has been lobbying for its ban. Germany and other E.U. countries have supported the calls to ban civilian nuclear imports from Russia, making this another issue likely to come up in the next round of sanctions talks.In August, Mr. Zelensky also highlighted the persistent protection of the Russian nuclear exports to Europe just as Ukraine’s Zaporizhzhia nuclear power plant came under fire.Some supporters of keeping Russian uranium running say that France and the other countries’ ability to generate electricity by operating their nuclear power plants during an acute energy crisis is more important than the political or financial gains that could come from a ban through E.U. sanctions, at least for now.Tankers in the NightOne of the most complex and important lobbying efforts to protect a European industry from sanctions is the one mounted by Greek diplomats to allow Greek-owned tankers to transport Russian oil to non-European destinations.This has facilitated one of the Kremlin’s biggest revenue streams. More than half of the vessels transporting Russia’s oil are Greek-owned, according to information aggregated from MarineTraffic, a shipping data platform.Supporters of the Greek shipping industry say that if it pulled out of that business, others would step in to deliver Russian oil to places like India and China. Experts say lining up enough tankers to make up for a total Greek pullout would not be simple, considering the sheer size of Greek-interest fleets and their dominance in this trade.According to European diplomats involved in the negotiations, their Greek counterparts were able to exempt Greek shipping companies from the oil embargo in a tough round of talks last May and June.Since then, the E.U. has come around to a United States-led idea to keep facilitating the transport of Russian oil, in order to avert a global oil-market meltdown, but to do so at a capped price to limit Russia’s revenues.The Greeks saw an opening: They would continue to transport Russian oil, but at the capped price. The bloc offered them additional concessions, and Greece agreed that the shipping of Russian oil would be banned if the price cap was not observed.The Greek-flagged oil tanker Minerva Virgo. Greek diplomats have lobbied for Greek-owned tankers to be allowed to transport Russian oil to non-European destinations. Bjoern Kils/ReutersEven if the economic benefits of such exemptions are hard to define, from a political perspective, the continued protection of some goods and industries is creating bad blood among E.U. members.Governments that have readily taken big hits through sanctions to support Ukraine, sacrificing revenues and jobs, are embittered that their partners in the bloc continue to doggedly protect their own interests.The divisions deepen a sense of disconnect between those more hawkish pro-Ukraine E.U. nations nearer Ukraine and those farther away, although geographical proximity is far from the only determinant of countries’ attitudes toward the war.And given that the bloc is a constant negotiating arena on many issues, some warn that what goes around eventually will come around.“This may be a raw calculation of national interests, but it’s going to linger,” Mr. Kirkegaard said. “Whoever doesn’t contribute now through sacrifice, next time there’s a budget or some other debate, it’s going to come back and haunt them.” More

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      Elections Approaching, Erdogan Raises the Heat Again With Greece

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      Turkey’s president suggested that troops “may suddenly arrive one night” in Greece. With inflation rampant and the lira sinking, a manufactured crisis might be just the thing he needs.ISTANBUL — Last week at a closed dinner in Prague, Prime Minister Kyriakos Mitsotakis of Greece was addressing 44 European leaders when President Recep Tayyip Erdogan of Turkey interrupted him and started a shouting match.Before stalking from the room, Mr. Erdogan accused Mr. Mitsotakis of insincerity about settling disputes in the eastern Aegean and blasted the European Union for siding with its members, Greece and Cyprus, according to a European diplomat and two senior European officials who were there.While the others, flabbergasted and annoyed, finished their dinners, Mr. Erdogan fulminated at a news conference against Greece and threatened invasion. “We may suddenly arrive one night,” he said. When a reporter asked if that meant he would attack Greece, the Turkish president said, “Actually you have understood.”The outburst was only the latest from Mr. Erdogan. As he faces mounting political and economic difficulties before elections in the spring, he has been ramping up the threats against his NATO ally since the summer, using language normally left to military hawks and ultranationalists.While few diplomats or analysts are predicting war, there is a growing sense among European diplomats that a politically threatened Mr. Erdogan is an increasingly dangerous one for his neighbors — and that accidents can happen.Mr. Erdogan needs crisis to buoy his shaky standing at home after nearly 20 years in power, a diplomat specializing in Turkey said, requesting anonymity. And if he is not provided one, the diplomat said, he may create one.The rising tensions between Greece and Turkey, both NATO members, now threaten to add a difficult new dimension to Europe’s efforts to maintain its unity in the face of Russia’s war in Ukraine and its accumulating economic fallout.Mr. Erdogan met President Vladimir V. Putin of Russia in Kazakhstan on Thursday.Pool photo by Vyacheslav ProkofyevAlready, Mr. Erdogan has made himself a troublesome and unpredictable ally for his NATO partners. His economic challenges and desire to carve out a stable security sphere for Turkey in a tough neighborhood have pushed him ever closer to President Vladimir V. Putin of Russia.Mr. Erdogan has earned some shelter from open criticism by allies because of his efforts to mediate between Russia and Ukraine, especially in the deal to allow Ukrainian grain exports.But he has refused to impose sanctions on Russia and continues to get Russian gas through the TurkStream pipeline, while asking Moscow to delay payment for energy.On Thursday, Mr. Erdogan met Mr. Putin in Kazakhstan, where they discussed using Turkey as an energy hub to export more Russian gas after the pipelines to Germany under the Baltic Sea have been damaged.But it is the escalating rhetoric against Greece that is now drawing special attention.Sinan Ulgen, the director of EDAM, an Istanbul-based research institution, said that of course there was an electoral aspect to Mr. Erdogan’s actions. But there were also deep-seated problems that foster chronic instability and dangerous tensions.“Turkey and Greece have a set of unresolved bilateral disputes,” he said, “and this creates a favorable environment whenever a politician in Ankara or Athens wants to raise tensions.”The two countries nearly went to war in the 1970s over energy exploration in the Aegean, in 1995-96 over disputed claims over an uninhabited rock formation in the eastern Mediterranean, and in 2020, again over energy exploration in disputed waters. “And now we’re at it again,” Mr. Ulgen said. “And why? Because of elections in Turkey and Greece.”Mr. Mitsotakis is also in campaign mode, with elections expected next summer, damaged by a continuing scandal over spyware planted in the phones of opposition politicians and journalists. As in Turkey, nothing appeals to Greek patriotism more than a good spat with an old foe.A Turkish drill in August off Mersin, Turkey. Turkey and Greece nearly went to war in 2020 over Turkish energy exploration in disputed waters.Adem Altan/Agence France-Presse — Getty ImagesHe has sought to appear firm without escalating. Confronted at the dinner in Prague, Mr. Mitsotakis retorted that leaders should solve problems and not create new ones, that he was prepared to discuss all issues but could not stay silent while Turkey threatened the sovereignty of Greek islands.“No, Mr. Erdogan — no to bullying,” he said in a recent policy speech. He told reporters that he was open to talks with Mr. Erdogan despite the vitriol, saying he thought military conflict unlikely. “I don’t believe this will ever happen,” he said. “And if, God forbid, it happened, Turkey would receive an absolutely devastating response.”He was referring to Greek military abilities that have been significantly bolstered recently as part of expanded defense agreements with France and the United States.Mr. Mitsotakis has also taken advantage of American annoyance with Mr. Erdogan’s relations with Russia and his delay in approving NATO enlargement to Finland and Sweden to boost ties with Washington. In May, he was the first Greek prime minister to address Congress and urged it to reconsider arms sales to Turkey.He has said Greece will buy F-35s, while Turkey, denied F-35s because of its purchase of a Russian air-defense system, is still pressing to get more F-16s and modernization kits, using NATO enlargement as leverage.But Mr. Erdogan is facing considerable problems at home, making tensions with Greece an easy and traditional way to divert attention and rally support.Mr. Erdogan is presiding over a disastrous economy, with inflation running officially at 83 percent a year — but most likely higher — and the currency depreciating. Turkish gross domestic product per capita, a measure of wealth, has dropped to about $7,500 from more than $12,600 in 2013, based on Turkey’s real population, which now includes some four million Syrian refugees, according to Bilge Yilmaz, a professor at the Wharton School of the University of Pennsylvania.Mr. Erdogan is presiding over a disastrous economy, with inflation running officially at 83 percent a year.Yasin Akgul/Agence France-Presse — Getty ImagesMr. Erdogan has kept cutting interest rates against conventional economic advice. “We need to reverse monetary policy,” said Mr. Yilmaz, who is touted as a likely finance minister should Mr. Erdogan lose the election. “A strong adjustment of the economy will not be easy.”There is also growing popular resentment of the continuing cost of the refugees, who were taken in by Mr. Erdogan as a generous gesture to fellow Muslims in difficulty.Still, Mr. Erdogan is thought to have a solid 30 percent of the vote as his base, and government-controlled media dominate, with numerous opposition journalists and politicians jailed or silenced.In a report on Wednesday, the European Union criticized “democratic backsliding” and said that “in the area of democracy, the rule of law and fundamental rights, Turkey needs to reverse the negative trend as a matter of priority with addressing the weakening of effective checks and balances in the political system.”Still, at this point, analysts think Mr. Erdogan could lose his majority in Parliament and might just lose the presidential election itself.That is an analysis firmly rejected by Mr. Erdogan’s Justice and Development Party, the AKP, said Volkan Bozkir, a former diplomat and member of Parliament, who says flatly that Mr. Erdogan and his party will be re-elected.Constantinos Filis, the director of the Institute of Global Affairs at the American College of Greece, believes that Mr. Erdogan is trying to keep all options open, “casting Greece as a convenient external threat and creating a dangerous framework within which he could justify a potential move against Greece in advance.”As for Washington, he said, they are telling Mr. Erdogan: “Thank you for what you did in Ukraine, of course you haven’t imposed sanctions on Russia, but OK, you’re in a difficult position, strategically, diplomatically, economically — but don’t dare to do something in the Aegean or the Eastern Mediterranean that will bring trouble to NATO.”Migrants at the border between Turkey and Greece in March 2020. There is growing popular resentment of the continuing cost of the refugees in Turkey, who include four million Syrians.The New York TimesMore likely, Mr. Filis said, Mr. Erdogan would again send migrants toward Europe, or launch another energy exploration in disputed areas off Cyprus or Crete, which produced near clashes in 2020, or intercept a Greek ship transporting military equipment to one of the Aegean Islands.Mr. Ulgen also does not expect armed conflict but would not be surprised. “It could happen; it’s not something we can rule out anymore,” he said. “But if it happens, it will be small-scale.”Niki Kitsantonis More

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      French Refineries Strike May Presage a Winter of Discontent for Europe

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      Bitten by inflation, workers are demanding a greater share of the surging profits of energy giants. It’s the kind of unrest leaders fear as they struggle to keep a united front against Russia.LE HAVRE, France — The northern port city of Le Havre is less than 25 miles away from two major oil refineries. But on Friday, the pumps at many gas stations were wrapped in red and white tape, the electric price signs flashing all nines. Little gasoline was to be had.Across France, a third of stations are fully or partly dry, victims of a fast-widening strike that has spread to most of the country’s major refineries, as well as some nuclear plants and railways, offering a preview of a winter of discontent as inflation and energy shortages threaten to undercut Europe’s stability and its united front against Russia for its war in Ukraine.At the very least the strike — pitting refinery workers seeking a greater share of the surging profits against the oil giants TotalEnergies and Exxon Mobil — has already emerged as the first major social crisis of Emmanuel Macron’s second term as president, as calls grow for a general strike next Tuesday.“It’s going to become a general strike. You will see,” said Julien Lemmonier, 77, a retired factory worker stepping out of the supermarket in Le Havre on a gray and rainy morning. He warned that if the port workers followed suit, “It will be over.”Striking employees of the Total refinery on Thursday.Andrea Mantovani for The New York TimesThe widening social unrest is just what European leaders fear as inflation hits its highest level in decades, driven in part by snarls in post-pandemic global supply chains, but also by the mounting impact of the tit-for-tat economic battle between Europe and Russia over its invasion of Ukraine.Economic anxiety is palpable across Europe, driving large protests in Prague, Britain’s biggest railway strike in three decades, as well as walkouts by bus drivers, call center employees and criminal defense lawyers, and causing many governments to introduce relief measures to cushion the blow and ward off still more turbulence. Airline workers in Spain and Germany went on strike recently, demanding wage increases to reflect the rising cost of living.For France the strikes have touched a long-worn nerve of the growing disparity between the wealthy few and the growing struggling classes, as well as the gnawing worry about making ends meet in the cold winter ahead.Workers at half of the country’s eight refineries are continuing to picket for higher wages in line with inflation, as well as a cut of the sky-high profits their companies made over recent months, as the price of gasoline has surged.“The money exists, and it should be distributed,” said Pascal Morel, the regional head of Confédération Générale du Travail, or CGT, France’s second-largest union, which has been leading the strikes. “Rather than laying claim to the striking workers, we should lay claim to their profits.”Pascal Morel, the regional head of Confédération Générale du Travail, one of France’s largest unions, which has been leading the strikes. Andrea Mantovani for The New York TimesSlow to notice at first, the country was rudely awoken to the strike’s effect this week, when pumps across the country ran out of fuel, forcing frustrated motorists to hunt around and then line up — sometimes for hours — at stations that were still open. Nerves quickly frayed, and reports of fistfights between enraged drivers buzzed on the news.In Le Havre, as in the rest of the country, residents revealed mixed feelings about the strikes. Some expressed solidarity with the workers, while others complained about how a small group was holding the entire country hostage. On both sides of the divide, however, many feared the strike would spread.The State of the WarA Large-Scale Strike: President Vladimir V. Putin of Russia unleashed a series of missile strikes that hit at least 10 cities across Ukraine, including Kyiv, in a broad aerial assault against civilians and critical infrastructure that drew international condemnation and calls for de-escalation.Crimean Bridge Explosion: Mr. Putin said that the strikes were retaliation for a blast that hit a key Russian bridge over the weekend. The bridge, which links the Crimean Peninsula to Russia, is a primary supply route for Russian troops fighting in the south of Ukraine.Pressure on Putin: With his strikes on civilian targets in Ukraine, Mr. Putin appears to be responding to his critics at home, momentarily quieting the clamors of hard-liners furious with the Russian military’s humiliating setbacks on the battlefield.Arming Ukraine: The Russian strikes brought new pledges from the West to send in more arms to Ukraine, especially sophisticated air-defense systems. But Kyiv also needs the Russian-style weapons that its military is trained to use, and the global supply of them is running low.“It’s going to bring France to a standstill and I assure you it doesn’t need that,” said Fatma Zekri, 54, an out-of-work accountant.On Thursday, workers echoed the call for a general strike next Tuesday originally issued by the CGT and later supported by three other large unions. And a long-planned protest by left-wing parties over the rising cost of living scheduled for Sunday threatens to become even larger.For Mr. Macron, the strike holds obvious perils, with echoes of the social unrest of the Yellow Vest movement — a widespread series of protests that started as a revolt against higher taxes on fuel. The movement may have dissipated, but its anger has not.In Le Havre, residents revealed mixed feelings about the strikes. Some expressed solidarity with the workers, while others complained about how a small group was holding the entire country hostage.Andrea Mantovani for The New York TimesThe protests paralyzed France for months in 2018 and 2019, led by lower-middle class workers who took to the streets and roundabouts, raging against a climate change tax on gas that they felt was an insulting symbol of how little the government cared about them and their sliding quality of life.The current strikes illustrated a longstanding question that continues to torment many in the country, said Bruno Cautrès, a political analyst at the Center for Political Research at Sciences Po University — “Why do I live in a country that is rich and I am struggling?”Speaking of the president, Mr. Cautrès said, “He has not managed to answer this simple question.”After winning his re-election last April, Mr. Macron promised he would shed his reputation as a top-down ruler and govern the country in a more collaborative way.“The main risk is that he will not succeed in convincing people that the second term is dedicated to dialogue, to easing tensions,” Mr. Cautrès said.But even as he faced criticism that his government had allowed the crisis to get to this point, Mr. Macron sounded defiant on Wednesday night, saying in an interview with the French television channel France 2 that it was “not up to the president of the republic to negotiate with businesses.”The Total refinery, shuttered during a strike by workers.Andrea Mantovani for The New York TimesHis government has already forced some workers back to a refinery near Le Havre and a depot near Dunkirk.“I can’t believe that for one second, our ability to heat our homes, light our homes and go to the gas pump would be put at risk by French people who say, ‘No, to protect my interests, I will compromise those of the nation,’” he said.Still, Mr. Macron is treading a very fine line. The issue of “super profits” has become a charged one in Parliament, with opposition lawmakers from both the left and right demanding companies reaping windfalls be taxed, to benefit the greater population.Over the first half of the year, TotalEnergies made $10 billion in profit and Exxon Mobil raked in $18 billion. Western oil and gas companies have generated record profits thanks to booming energy prices, which have risen because of the war in Ukraine and allowed Russia to rake in billions in revenues even as it cuts oil and gas supplies to Europe. A recent OPEC Plus deal involving Saudi Arabia and Russia to cut production is likely to further raise prices.Earlier this week, Exxon Mobil announced that it had come to an agreement with two of four unions working at its sites, “out of a desire to urgently and responsibly to put an end to the strikes.” But the wage increase was one percentage point less than CGT had demanded, and half the bonus.In its own news release, TotalEnergies said the company continued to aim for “fair compensation for the employees” and to ensure they benefited “from the exceptional results generated” by the company.On Friday, two unions at TotalEnergies announced they had reached a deal for a 7 percent wage increase and a bonus. But CGT, which has demanded a 10 percent hike, walked out of the negotiation and said it would continue the strike.To date, Mr. Macron has been loath to tax the oil giants’ windfall profits, worrying it would tarnish the country’s investment appeal, and preferring instead that companies make what he termed a “contribution.”However, last week the government introduced an amendment to its finance bill, in keeping with new European Union measures, applying a temporary tax on oil, gas and coal producers that make 20 percent more in profit on their French operations than they did during recent years.On Thursday, France’s Finance Minister Bruno Le Maire also called on TotalEnergies to raise wages for salaried workers. And he announced that 1.7 billion euros, about $1.65 billion, would be earmarked to help motorists if fuel prices continued to rise.“It is a company that is now making significant profits,” Mr. Le Maire told RTL radio station on Thursday. “Total has paid dividends, so the sharing of value in France must be fair.”The pumps at gas stations were wrapped in red and white tape, the electric price signs flashing all nines. Andrea Mantovani for The New York TimesThe tangle of pipes and towering smokestacks of the hulking Total refinery in Gonfreville-l’Orcher, just outside of Le Havre, were eerily silent on Thursday, as union members burned wood pallets, hoisted flags and voted to continue the strike.Many believed their anger captured a building sentiment in the country, where even with generous government subsidies, people are struggling financially and are increasingly anxious about the winter of energy cutbacks. Inflation in France, though lower than in the rest of Europe, has surpassed 6 percent, jacking the prices of some basic supplies like frozen meat, pasta and tissues.“This era must end — the era of hogging for some, and rationing for others,” François Ruffin told the protesters on Thursday. Mr. Ruffin, a filmmaker turned elected official with the country’s hard-left France Unbowed party, rose to prominence with his satirical documentary film about France’s richest man, Bernard Arnault, and the loss of middle-class jobs to globalization.If anything should be requisitioned, it should be the profits of huge companies, not workers, many said at the protest sites.David Guillemard, a striker who has worked at the Total refinery for 22 years, said the back-to-work order had kicked a hornet’s nest. “Instead of calming people,” he said, “this has irritated them.” More

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      Why the British Pound Continues to Sink

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      Britain’s pound coin — rimmed in nickel and brass with an embossed image of Queen Elizabeth II at the center — could always be counted on to be significantly more valuable than the dollar.Such boasting rights effectively came to an end this week when the value of the pound sank to its lowest recorded level: £1 = $1.03 after falling more than 20 percent this year.The nearly one-to-one parity between the currencies sounded the close of a chapter in Britain’s history nearly as much as the metronomic footfalls of the procession that carried the queen’s funeral bier up the pavement to Windsor Castle.“The queen’s death for many people brought to an end a long era of which the soft power in the United Kingdom” was paramount, said Ian Goldin, professor of globalization and development at the University of Oxford. “The pound’s demise to its lowest level is sort of indicative of this broader decline in multiple dimensions.”The immediate cause of the pound’s alarming fall on Monday was the announcement of a spending and tax plan by Britain’s new Conservative government, which promised steep tax cuts that primarily benefited the wealthiest individuals along with expensive measures to help blunt the painful rise in energy prices on consumers and businesses.The sense of crisis ramped up Wednesday when the Bank of England intervened, in a rare move, and warned of “material risk to U.K. financial stability” from the government’s plan. The central bank said it would start buying British government bonds “on whatever scale is necessary” to stem a sell-off in British debt.The Bank of England’s emergency action seemed at odds with its efforts that began months ago to try to slow the nearly 10 percent annual inflation rate, which has lifted the price of essentials like petrol and food to painful levels.Rising Inflation in BritainInflation Slows Slightly: Consumer prices are still rising at about the fastest pace in 40 years, despite a small drop to 9.9 percent in August.Interest Rates: On Sept. 22, the Bank of England raised its key rate by another half a percentage point, to 2.25 percent, as it tries to keep high inflation from becoming embedded in the nation’s economy.Energy Bills to Soar: Gas and electric charges for most British households are set to rise 80 percent this fall, further squeezing consumers and stoking inflation.Investor Worries: The financial markets have been grumbling with unease about Britain’s economic outlook. The government plan to freeze energy bills and cut taxes is not easing concerns.The swooning pound this week has carried an unmistakable political message, amounting to a no-confidence vote by the world’s financial community in the economic strategy proposed by Prime Minister Liz Truss and her chancellor of the Exchequer, Kwasi Kwarteng.To Mr. Goldin, the pound’s journey indicates a decline in economic and political influence that accelerated when Britain voted to leave the European Union in 2016. In many respects, Britain already has the worst performing economy, aside from Russia, of the 38-member Organization for Economic Cooperation and Development.“It’s just a question of time before it falls out of the top 10 economies in the world,” Mr. Goldin said. Britain ranks sixth, having been surpassed by India.Eswar Prasad, an economist at Cornell University, said this latest plunge had delivered a bracing blow to Britain’s standing. A series of “self-inflicted wounds,” including Brexit and the government’s latest spending plan, have accelerated the pound’s slide and further endangered London’s status as a global financial center.Dozens of currencies, including the euro, the Japanese yen and the Chinese renminbi, have slumped in recent weeks. Rising interest rates and a relatively bright economic outlook in the United States combined with turmoil in the global economy have made investments in dollars particularly appealing.But the revival by the Truss government of an extreme version of Thatcher and Reagan-era “trickle-down” economic policies elicited a brutal response.“The problem isn’t that the U.K. budget was inflationary,” wrote Dario Perkins, a managing director at TS Lombard, a research firm, on Twitter. “It’s that it was moronic.”To some, the pound’s journey indicates a decline in Britain’s economic and political influence.Suzie Howell for The New York TimesDuring the more than 1,000 years in which the pound sterling has reigned as Britain’s national currency, it has suffered its share of ups and downs. Its value in the modern era could never match the value of an actual pound of silver, which in the 10th century could buy 15 cows.Over the centuries, British leaders have often gone to extraordinary lengths to protect the pound’s value, viewing its strength as a sign of the country’s economic power and influence. King Henry I issued a decree in 1125 ordering that those who produced substandard currency “lose their right hand and be castrated.”In the 1960s, the Labour government under Harold Wilson so resisted devaluing the pound — then set at a fixed rate of $2.80, high enough to be holding back the British economy — that he ordered cabinet papers discussing the idea to be burned. In 1967, the government finally cut its value by 14 percent to $2.40.Other economic crises thrashed the pound. In the 1970s, when oil prices skyrocketed and Britain’s inflation rate topped 25 percent, the government was compelled to ask the International Monetary Fund for a $3.9 billion loan. In the mid-1980s, when high U.S. interest rates and a Reagan administration spending spree jacked up the dollar’s value, the pound fell to a then record low.The pound’s dominance has been waning since the end of World War II. Today, the global economy is experiencing a particularly tumultuous time as it recovers from the aftermath of the coronavirus pandemic, supply chain breakdowns, Russia’s invasion of Ukraine, an energy shortage and soaring inflation.As Richard Portes, an economics professor at London Business School, said, currency exchanges have enormous swings over time. The euro was worth 82 cents in its early days, he recalled, and people referred to it as a “toilet paper” currency. But by 2008, its value had doubled to $1.60.What might cause the pound to revive is not clear.The Truss government’s economic program has forcefully accelerated the pound’s slide — the latest in a series of what many economists consider egregious economic missteps that peaked with Brexit.Much depends on the Truss government.“The plunge in the pound is the result of policy choices, not some historical inevitability” said Ian Shepherdson, chief U.S. economist at Pantheon Macroeconomics. “Whether this is a new, grim era or just an unfortunate interlude depends on whether they reverse course or are kicked out at the next election.”As it happens, the Bank of England is preparing to issue new pound bank notes and coins featuring King Charles III, at the very moment that the pound has dropped to record lows.“The death of the queen and the fall of the pound do seem jointly to signify decisively the end of an era,” Mr. Prasad of Cornell said. “These two events could be considered markers in a long historical procession in the British economy and the pound sterling becoming far less important than they once were.” More

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      Italy’s Hard-Right Lurch Raises New Concerns in Washington

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      The Biden administration pledged to work with the country’s new leaders despite worries. Several Republicans hailed the Italian election results.WASHINGTON — The Biden administration publicly reacted with calm on Monday to Italy’s election of a far-right governing coalition, pledging to work with the country’s incoming leaders despite concern about their party’s fascist roots.But the latest rightward lurch of a European country — two weeks after a far-right party performed startlingly well in Sweden’s elections — is raising concerns in Washington about the continent’s combustible populism and what it could mean for some of President Biden’s foreign policy goals, including confronting Russia and defending democracy against authoritarianism.It has also underscored divisions within the United States, as members of the Trump wing of the Republican Party embraced the rise of a nationalist whose party has roots in Mussolini-era fascism.In the near term, the political success of Giorgia Meloni and her nationalist Brothers of Italy party, which leaves her poised to become the country’s next prime minister, is unlikely to rupture relations between Washington and Rome. Nor should it hobble the U.S.-led effort to unify Europe in defense of Ukraine against Russian conquest. Although Ms. Meloni has espoused radical nationalist views, and key members of her coalition openly oppose the European Union and call for friendlier relations with Moscow, as a candidate she expressed support for NATO and the defense of Ukraine.Writing on Twitter on Monday, Secretary of State Antony J. Blinken set a tone of comity, saying that the Biden administration was “eager to work with Italy’s government on our shared goals: supporting a free and independent Ukraine, respecting human rights, and building a sustainable economic future.”“Italy is a vital ally, strong democracy, and valued partner,” he added.Mr. Blinken’s comments appeared to reflect an initial belief that officials in the Biden administration can do strategic business with Ms. Meloni, even if many of her core values, including skepticism of gay rights and “gender ideology,” clash with their own.The Biden administration also understands that even an anti-establishment firebrand like Ms. Meloni will need financial support from the European Union to survive in office — a tall order if she wages political fights with Washington and Brussels. And with Italian public opinion slanted against Russia after its invasion of Ukraine, Ms. Meloni would be hard-pressed to soften Italy’s line toward Moscow or seek to block the E.U.’s consensus-based support for Kyiv, analysts said.“From a foreign policy perspective, I do not expect a U-turn,” said Giovanna De Maio, a visiting fellow at George Washington University who studies trans-Atlantic relations. “It will be a moderate approach, at least for now,” she added.In an unsettling sign for the administration and centrist European leaders alike, however, several prominent Republicans hailed Ms. Meloni’s showing — a reminder of the growing kinship between European nationalists and the Trump wing of the Republican Party, who share a general philosophy of traditional social values, support for restricted immigration and deep skepticism of multilateral institutions.“This month, Sweden voted for a right-wing government,” Representative Lauren Boebert, Republican of Colorado, wrote on Twitter. “Now, Italy voted for a strong right-wing government. The entire world is beginning to understand that the Woke Left does nothing but destroy. Nov 8 is coming soon & the USA will fix our House and Senate! 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So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.Mike Pompeo, President Donald J. Trump’s secretary of state, who is of Italian heritage, also tweeted his congratulations. “Italy deserves and needs strong conservative leadership,” he wrote. “Buona Fortuna!”After Mr. Trump derided the European Union and clashed with longtime U.S. allies like Germany and France over foreign policy, Mr. Biden has worked to restore relations between America and Europe. That effort was accelerated by Russia’s invasion of Europe.But the shock wave from Italy is a reminder of Europe’s volatile politics and the threat they pose to the established, U.S.-backed order.The ascent of Ms. Meloni’s coalition also deals a blow to a central theme of Mr. Biden’s presidency: the effort to defend democracy and reject authoritarianism abroad. Europe’s right-wing parties have shown authoritarian tendencies in power, with conservatives in nations like Poland and Hungary cracking down on press freedom, an independent judiciary and other checks on central power.Europe’s far right may see greater opportunity in the months ahead, analysts said, as the continent stumbles toward winter amid soaring energy prices and other forms of inflation that many economists predict will produce a recession. Mr. Blinken and other administration officials have warned that winter will test Europe’s resolve on Ukraine, as analysts worry that economic pain could shift public anger away from President Vladimir V. Putin of Russia and toward the continent’s establishment leaders.“In the coming months, our unity and sovereignty will be tested with pressure on energy supplies and the soaring cost of living, caused by Russia’s war,” Mr. Blinken warned during a stop in Brussels this month.Daniel Baer, the director of the Europe program at the Carnegie Endowment for International Peace, said that if economic conditions grew much worse, they could “drive populist strains on established democracies the way the 2008 financial crisis did.”Mr. Biden has worked with a set of strongly pro-American, internationalist leaders in Europe’s major capitals. France and Germany, along with Britain, have largely been in sync with Mr. Biden’s agenda. Italy was governed for nearly all of the Biden presidency by Prime Minister Mario Draghi, an economist who prioritized Italy’s international integration. Mr. Draghi’s resignation this summer triggered Sunday’s election.Mr. Baer noted that hard-right candidates had fizzled in two major elections over the past year. In April, the centrist French president, Emmanuel Macron, defeated his nationalist challenger, Marine Le Pen, and the moderate Olaf Scholz emerged from Germany’s elections last fall.Since then, the far-right Sweden Democrats won the second-largest share of the country’s vote, Ms. Meloni is poised to lead Italy once a government is formed there and Spain’s Vox party continues to gather momentum.“The sighs of relief that a lot of people breathed when Scholz was elected and Le Pen lost — was that premature?” Mr. Baer asked. More

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      Europe Looks at Italy’s Giorgia Meloni With Caution and Trepidation

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      Giorgia Meloni, poised to be the country’s first far-right leader since Mussolini, says she supports Ukraine and has moderated her harsh views on Europe, but there are doubts, given her partners.BRUSSELS — The victory in Italian elections of the far-right and Euroskeptic leader Giorgia Meloni, who once wanted to ditch the euro currency, sent a tremor on Monday through a European establishment worried about a new right-wing shift in Europe.European Union leaders are now watching her coalition’s comfortable victory in Italy, one of its founding members, with caution and some trepidation, despite reassurances from Ms. Meloni, who would be the first far-right nationalist to govern Italy since Mussolini, that she has moderated her views.But it is hard for them to escape a degree of dread. Even given the bloc’s successes in recent years to agree on a groundbreaking pandemic recovery fund and to confront Russia’s aggression in Ukraine, the appeal of nationalists and populists remains strong — and is spreading, a potential threat to European ideals and cohesion.Earlier this month, the far-right Sweden Democrats became the country’s second-largest party and the largest in what is expected to be a right-wing coalition.The economic impact of Covid and now of the war in Ukraine, with high national debt and rocketing inflation, has deeply damaged centrist parties all over Europe. Far-right parties have not only pushed centrist parties to the right, but have also become “normalized,” no longer ostracized, said Charles A. Kupchan, a European expert at the Council on Foreign Relations.“The direction of political momentum is changing — we had a wave of centrism before and during the pandemic, but now it feels like the political table is tilting back in the direction of the populists on the right,” he said. “And that’s a big deal.”Under the outgoing technocratic prime minister Mario Draghi, Italy played an important role in a Europe of weak leadership, both on vital economic issues and the response to Russia’s invasion of Ukraine. But Italy has now turned away from the European mainstream.An Italy led by Ms. Meloni is likely to be constrained by European control over billions of euros in crucial funding. In the best case, diplomats and analysts say, it will not smash the European consensus, but could severely complicate policymaking.If Ms. Meloni and her coalition partners choose to side with other populist, Euroskeptic leaders inside the European Union, like Prime Minister Viktor Orban of Hungary and Prime Minister Mateusz Morawiecki of Poland, she can certainly “gum up the works,” Mr. Kupchan said.For Italy to team up with “Orban and company is Brussels’ nightmare,” said Stefano Stefanini, an analyst and former Italian diplomat. “For over 10 years the E.U. has lived with the fear of being swamped by a tide of Euroskeptic populism,” he said. “Hungary is a pain, but Italy joining forces with Hungary and Poland would be a serious challenge to the mainstream E.U. and would mobilize the far right in other countries.”Hungary’s populist leader Viktor Orban last month. For Italy to team up with “Orban and company is Brussels’ nightmare,” a former Italian diplomat said.Emil Lippe for The New York TimesThe first European congratulations to her came Sunday night from Hungary. Mr. Orban’s political director, Balazs Orban, said in a Twitter message: “In these difficult times, we need more than ever friends who share a common vision and approach to Europe’s challenges.”Europe’s concerns are less about policy toward Ukraine. Ms. Meloni has said she supports NATO and Ukraine and has no great warmth for President Vladimir V. Putin of Russia, as her junior coalition partners, Matteo Salvini and Silvio Berlusconi, have evinced.Still, Mr. Berlusconi said last week that Mr. Putin “was pushed by the Russian population, by his party, by his ministers to invent this special operation.” The plan, he said, was for Russian troops to enter “in a week to replace Zelensky’s government with a government of decent people.”Italian popular opinion is traditionally sympathetic toward Moscow, with about a third of seats in the new Parliament going to parties with an ambiguous stance on Russia, sanctions, and military aid to Ukraine. As the war proceeds, with all its domestic economic costs, Ms. Meloni may take a less firm view than Mr. Draghi has.Mr. Kupchan expects “the balance of power in Europe will tilt more toward diplomacy and a bit less toward continuing the fight.” That is a view more popular with the populist right than with parties in the mainstream, but it has prominent adherents in Germany and France, too.Supporters of the far-right Sweden Democrats celebrating exit polls near Stockholm this month. Sweden Democrats are now the country’s second-biggest party.Stefan Jerrevang/EPA, via Shutterstock“These elections are another sign that all is not well with mainstream parties,” said Mark Leonard, director of the European Council on Foreign Relations, and spell a complicated period for the European Union.Even the victory a year ago of Olaf Scholz in Germany, a man of the center left, was ensured by the collapse of the center-right Christian Democrats, who had their worst showing in their history, while in April, France’s long-dominant center-right Republicans fell to under 5 percent of the vote.“People in Brussels are extremely anxious about Meloni becoming an E.U. prime minister,” Mr. Leonard said. “They’ve seen how disruptive Orban can be from a small country with no systemic role in the E.U. Meloni says she won’t immediately upend the consensus on Ukraine, but she could be a force for a much more virulent form of Euroskepticism in council meetings.”One or two troublemakers can do a lot of a damage to E.U. decision-making, he said, “but if it’s five or six,” it becomes very hard to obtain coherence or consensus.When the populist Five Star Movement led Italy from 2018 to early 2021, before Mr. Draghi, it created major fights inside Brussels on immigration and asylum issues. Ms. Meloni is expected to concentrate on topics like immigration, identity issues (she despises what she calls “woke ideology”), and future E.U. rules covering debt and fiscal discipline, to replace the outdated growth and stability pact.But analysts think she will pick her fights carefully, given Italy’s debt mountain — over 150 percent of gross domestic product — and the large sums that Brussels has promised Rome as part of the Covid recovery fund. For this year, the amount is 19 billion euros, or about $18.4 billion, nearly 1 percent of Italy’s G.D.P., said Mujtaba Rahman, Europe director for the Eurasia Group, with a total over the next few years of some 10.5 percent of G.D.P.“Draghi has already implemented tough reforms to satisfy Brussels, so there is no reason for her to come in and mess it up and agitate the market,” Mr. Rahman said. But for the future, there are worries that she will push for an expansionist budget, looser fiscal rules and thereby make the more frugal countries of northern Europe less willing to compromise.For Mr. Rahman, the bigger risk for Europe is the loss of influence Italy exercised under Mr. Draghi. He and President Emmanuel Macron of France, “were beginning to create an alternative axis to compete with the vacuum of leadership now in Germany, and all that will be lost,” Mr. Rahman said. Italy will go from a country that leads to one that Europe watches anxiously, he said.Italy’s outgoing Prime Minister, Mario Draghi, left, with President Emmanuel Macron of France and Chancellor Olaf Scholz of Germany, on their way to Ukraine in June.Pool photo by Ludovic MarinThere was a sign of that anxiety just before the election, when Ursula von der Leyen, the president of the European Commission, warned that Brussels had “the tools” to deal with Italy if things went in a “difficult direction.” It was seen as a hint that the European Commission could cut funds to Italy if it were deemed to be violating the bloc’s democratic standards.Mr. Salvini, seeing an opportunity, immediately responded: “What is this, a threat? This is shameful arrogance,” and asked Ms. von der Leyen to “respect the free, democratic and sovereign vote of the Italian people” and resist “institutional bullying.”Instead, Mr. Stefanini, the former diplomat, urged Brussels to be patient and to engage with Ms. Meloni. “The new government should be judged on facts, on what it does when in power,” he said. “The real risk is that by exaggerated overreactions the E.U. makes legitimate concerns self-fulfilling prophecies.“If she’s made to feel rejected, she’ll be pushed into a corner — where she’ll find Orban and other soulmates waiting for her, and she’ll team up with them,” he continued. “But if she’s greeted as a legitimate leader, democratically elected, it will be possible for the E.U. to do business with her.”Luuk van Middelaar, a historian of the bloc, also urges caution. European leaders know two things about Italian prime ministers, he said. First, “they are not very powerful at home, and two, they tend not to last very long” — since World War II, an average of about 18 months.“So they will wait and see and not be blown away,” Mr. van Middelaar said. If she lasts longer, however, she could energize other far-right Euroskeptics in other big countries like France, he said, “and that would make a real difference.” More

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      Meloni Faces Early Test of Italy’s Resolve on Russia and Ukraine

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      The hard-right leader Giorgia Meloni has been a full-throated supporter of Ukraine, but her coalition partners have sounded like apologists for Vladimir V. Putin.ROME — Throughout her time in the opposition to Prime Minister Mario Draghi’s national unity government, Giorgia Meloni, the hard-right leader who is poised to become the next Italian prime minister after a strong showing in Sunday’s elections, railed against everything from vaccine requirements to undemocratic power grabs.But on the issue of Ukraine, perhaps the most consequential for the government, she unambiguously criticized Russia’s unwarranted aggression, gave full-throated support for Ukraine’s right to defend itself and, in a recent interview, said she would “totally” continue to provide Italian arms to Kyiv.The same cannot be said for Ms. Meloni’s coalition partners, who have deeply admired Russia’s president, Vladimir V. Putin, and have often sounded like his apologists. Just days before the vote, the former prime minister Silvio Berlusconi, once Mr. Putin’s best friend among leaders in Western Europe, claimed “Putin was pushed by the Russian population, by his party and by his ministers to invent this special operation,” and that a flood of arms from the West had thwarted Russian soldiers in their mission to reach “Kyiv within a week, replace Zelensky’s government with decent people and then leave.”The other coalition partner, Matteo Salvini, the leader of the League party, used to wear T-shirts with Mr. Putin’s face on them and has for years been so fawning toward Russia that he has frequently had to reject accusations that he has taken money from Moscow.Recently, with Ms. Meloni apparently uncomfortable as she sat beside him, Mr. Salvini doubted the wisdom of sanctions on Russia, which he said hurt Italy more than Mr. Putin’s government.How Ms. Meloni navigates those tensions in her coalition will now be a key factor in the European Union’s struggle to keep an unbroken front against Russia as the cost of sanctions begins to bite in winter.Prime Minister Mario Draghi of Italy, second from right, visited Ukraine in June with leaders from France, Germany and Romania. Under Mr. Draghi, Italy became a key player in Europe’s hard line against Russia.Viacheslav Ratynskyi/ReutersIf she wavers, especially on sanctions, European leaders who have stood up to Mr. Putin all these months fear it could begin a major unraveling of resolve, widening divisions in the European Union and between the United States and Europe.“We are ready to welcome any political force that can show itself to be more constructive in its relations with Russia,” the Kremlin spokesman, Dmitri Peskov, said after the Italian election results, according to the Russian news service Tass.But analysts said Russia should not expect a change from Ms. Meloni anytime soon, believing that her position on Ukraine is credible and that the weak showing of her partners in the election will allow her to keep them in their place without blowing up their alliance.“I put my hand today on fire that she is not going to bend,” said Nathalie Tocci, the director of the Institute for International Affairs in Rome. “She’s very gung-ho about Russia.”Despite a widespread suspicion that political calculation lay behind Ms. Meloni’s pivot during the campaign to less hostile positions on the European Union and away from leaders such as Prime Minister Viktor Orban of Hungary and Marine Le Pen in France, analysts judged that on the issue of Ukraine, Ms. Meloni was not likely to budge.In the past, Ms. Meloni has admired Mr. Putin’s defense of Christian values, which is consistent with her own traditionalist rhetoric. But unlike other hard-right politicians and newbie nationalists, like Mr. Salvini, Ms. Meloni was raised in a post-Fascist universe in Italy where Russia — and especially Communist internationalists — represented an Eastern force that threatened the sanctity and peculiarities of Western European identities.For Ms. Meloni it was less difficult to step away from the Putin adoration that swept the populist-nationalist right over the last decade. During the campaign, she was happy to point out this difference with her coalition partners, as she was competing with them and it helped differentiate her and reassure the West of her credibility.Pummeling the competition in Sunday’s election will have made it easier to withstand any attempted pressure from Mr. Salvini or Mr. Berlusconi, who both failed to break into double digits in the polls and were thus left with little leverage.In any case, Mr. Berlusconi and Mr. Salvini had already supported the sanctions as part of Mr. Draghi’s national unity government and didn’t bolt over the issue then. Mr. Salvini, who has sought to distance himself from Mr. Putin, was so hobbled by his disastrous performance in the elections that Rome was rife with speculation that he could be replaced as his party’s leader by a more moderate and less ideological governor from the country’s north, where the League has its electoral base.Ms. Meloni meeting with her coalition partners, Matteo Salvini and Silvio Berlusconi, in October 2021. The two men admire Russia’s president, Vladimir V. Putin, and have often sounded like his apologists.Guglielmo Mangiapane/ReutersThat is not to say Ms. Meloni faces no pressure at home for a more forgiving stance. Italy, a country with deep and long ties to Russia, has long had reservations about sanctions against Moscow and getting involved in foreign wars.“I think we should put the question up to the Italians in a referendum,” Stefano Ferretti, 48, a supporter of Ms. Meloni, said on Election Day. “Let’s see if they really want it.”And Italy is not alone in Europe when it comes to doubts about a continued hard line against Russia, and turning away from its cheap energy, ahead of a cold and economically painful winter.In Prague this month, a day after the Czech government survived a no-confidence vote over accusations that it had failed to act on soaring energy prices, tens of thousands of protesters took to the streets to voice outrage on the issue while far-right and fringe groups led many demonstrators in calling for withdrawal from NATO and the European Union. In Sweden, a hard-right party more sympathetic to Mr. Putin was on the winning side in elections this month.Mr. Orban has created complications for the European Union in its efforts to present a united force against Mr. Putin by demanding, and receiving, carve-outs for oil imports in exchange for agreeing to an embargo on Russian crude oil imports, a sanctions measure that required unanimity among member countries. On Monday, Mr. Orban applauded Ms. Meloni’s victory, writing on Facebook: “Bravo Giorgia, A more than deserved victory. Congratulations!”But analysts did not foresee Italy, under Ms. Meloni, playing the same games Hungary has done with sanctions. In her acceptance speech, she emphasized “responsibility” and experts said she was a savvy politician who clearly understood that Italy’s leaving the fold would break the bloc’s Russia strategy.As a reminder, though, only days before the vote, the European Commission president, Ursula von der Leyen, responded to a question about “figures close to Putin” poised to win elections in Italy by saying, “We’ll see.”“If things go in a difficult direction — and I’ve spoken about Hungary and Poland — we have the tools,” she said.Matteo Salvini, the leader of the League party, used to wear T-shirts with Mr. Putin’s face on them.Gianni Cipriano for The New York TimesThe tools included the cutting of funds for member states that Brussels considers in violation of the rule of law. Last week, the commission — which is the European Union’s executive arm — proposed to cut €7.5 billion of funds allocated to Hungary.But Italy is a central pillar not only of the European Union, but of its united front against Russia. Aldo Ferrari, head of the Russia, Caucasus and Central Asia Program at the Institute for International Political Studies in Milan, said Ms. Meloni had made her position “amply clear” throughout the election campaign, and that it was through Ukraine that she “sought legitimacy” among international leaders, especially members of the European Union and NATO.And as Russia is an ever less attractive ally, its pull on the West diminishes. The decision by countries of the European Union to endure economic pain together made it less likely that Italy, which is so woven into the fabric of the union, would break.“Our inclusion in the European Union and NATO,” Mr. Ferrari said, overcame the will “of individual politicians and individual countries.”Under Mr. Draghi, Italy became a key player in Europe’s hard line against Russia, which he has framed as an existential issue that will define the contours and values of the continent for decades to come.While some liberals had hoped he would rally to their side during the election campaign, or at least nod that he preferred them, Mr. Draghi stayed out of it completely. Analysts say he saw the polls, and the writing on the wall, and decided the most prudent coarse of action for his platform, legacy and, some critics say, future ambitions, was a smooth transition of power to Ms. Meloni.“I have a good relationship with Draghi,” Ms. Meloni said in an interview earlier this month. She said that more than once, “He could trust in us much more than the parties he had in his majority.”“Look on Ukraine,” she said. “On Ukraine, we made the foreign policy.”Elisabetta Povoledo More

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      Giorgia Meloni Leads Voting in Italy, in Breakthrough for Europe’s Hard Right

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      ROME — Italy appeared to turn a page of European history on Sunday by electing a hard-right coalition led by Giorgia Meloni, whose long record of bashing the European Union, international bankers and migrants has sown concern about the nation’s reliability in the Western alliance. Early projections based on a narrow sampling of precincts, as well as exit polls, on Sunday night suggested that Ms. Meloni, the leader of the nationalist Brothers of Italy, a party descended from the remnants of fascism, had led a right-wing coalition to a majority in Parliament, defeating a fractured left and a resurgent anti-establishment movement. The final results would not be clear until Monday, and it will still be weeks before the new Italian parliament is seated and a new government is formed, leaving plenty of time for political machinations. But Ms. Meloni’s strong showing, with about 25 percent of the vote, the highest of any single party, makes her the prohibitive favorite to become the country’s first female prime minister. While she is a strong supporter of Ukraine, her coalition partners deeply admire Russia’s president, Vladimir V. Putin, and have criticized sanctions against Russia.“From the Italians has arrived a clear indication,” Ms. Meloni, known for her crescendoing rhetoric and cult of personality, said in a measured victory speech at nearly 3 a.m., “for the center-right to guide Italy.”After saying she had suffered through a “violent electoral campaign” filled with unfair attacks, Ms. Meloni spoke about “reciprocal respect” and recreating “trust in the institutions.” She posed flashing a victory sign. “We are at the starting point,” she said, adding, “Italy chose us, and we will never betray it.”The victory, in an election with lower turnout than usual, comes as formerly taboo and marginalized parties with Nazi or fascist heritages are entering the mainstream — and winning elections — across Europe. This month, a hard-right group founded by neo-Nazis and skinheads became the largest party in Sweden’s likely governing coalition. In France this year, the far-right leader Marine Le Pen — for a second consecutive time — reached the final round of presidential elections. In Spain, the hard-right Vox, a party closely aligned with Ms. Meloni, is surging.But it is Italy, the birthplace of fascism and a founding member of the European Union, that has sent the strongest shock wave across the continent after a period of European-centric stability led by Prime Minister Mario Draghi, who directed hundreds of billions of euros in recovery funds to modernize Italy and helped lead Europe’s strong response to Russia. Giorgia Meloni preparing to cast her vote at a polling station in Rome on Sunday.Gianni Cipriano for The New York Times“This is a sad day for the country,” Debora Serracchiani, a leader of the Democratic Party, which will now lead the opposition, said in a statement early Monday morning.Ms. Meloni’s victory showed that the allure of nationalism — of which she is a strong advocate — remained undimmed, despite the breakthroughs by E.U. nations in coming together to pool sovereignty and resources in recent years, first to combat the coronavirus pandemic and then Mr. Putin’s initiation of the largest conflict in Europe since World War II.How, and how deeply, a right-wing coalition in Italy led by Ms. Meloni could threaten that cohesion is now the foremost concern of the European establishment.Ms. Meloni has staunchly, and consistently, supported Ukraine and its right to defend itself against Russian aggression. But her coalition partners — Matteo Salvini, the firebrand leader of the League, and the former prime minister Silvio Berlusconi — have clearly aligned themselves with Mr. Putin, questioning sanctions and echoing his propaganda. That fracture, and the bitter competition between the right-wing leaders, could prove fatal for the coalition, leading to a short-lived government. But some political analysts say Ms. Meloni, having attained power, may be tempted to soften her support for sanctions, which are unpopular in much of Italy. If she does, there is concern that Italy could be the weak link that breaks the European Union’s strong united position against Russia.Ms. Meloni had spent the campaign seeking to reassure an international audience that her support of Ukraine was unwavering. She sought to allay concerns by condemning Mussolini, whom she once admired, and Italy’s Fascist past. She also made more supportive noises about Italy’s place in the European Union and distanced herself from Ms. Le Pen and Prime Minister Viktor Orban of Hungary, whom she had previously emulated. But that pivoting was more for international markets than Italian voters, who didn’t much care about her past, or even her affinity for illiberal democracies. The Italian electorate had not moved to the right, political scientists said, but instead again resorted to a perennial desire for a new leader who could possibly, and providentially, solve all its ills. Ms. Meloni found herself in the right place at the right time. Hers was virtually the only major party to remain outside Mr. Draghi’s national unity government, allowing her to soak up an increasing share of the opposition. Her support surged from 4 percent to nearly about 25 percent.After a revolt by a party in Mr. Draghi’s broad unity government in July, the right-wing parties, eager to go to elections they were favored to win, sensed opportunity and bolted, with Ms. Meloni in the pole position.There is little concern in the Italian establishment that she will undermine Italian democracy — she has been a consistent advocate for elections during unelected technocratic governments and has long served in Parliament. There is also a widespread belief that Italy’s dependence on hundreds of billions of euros in relief funds from the European Union will force Ms. Meloni and her government to follow the spending plans, reforms and overall blueprint established by Mr. Draghi. The money comes in tranches and the plans have to meet strict criteria. If she reverses course, Italy could lose out on billions of essentially free euros as rising energy prices and inflation — much of it stemming from the sanctions against Russia — are expected to worsen in coming months.Giorgia Meloni, addressing supporters during a rally in Piazza Duomo in Milan earlier this month.Piero Cruciatti/Agence France-Presse — Getty ImagesBut there is concern about Ms. Meloni’s lack of experience and her party’s lack of technical expertise, especially in running the eurozone’s third-largest economy, and Mr. Draghi has kept in close touch with her, both to ensure her support for Ukraine and, insiders say, to help find someone who can provide economic continuity.Nevertheless, Ms. Meloni represents a historic break at the top of Italian government. She came of political age in a post-Fascist, hard right that sought to redefine itself by seizing on new symbols and texts, especially “The Lord of the Rings” and other works by the British writer J.R.R. Tolkien, to distance itself from the taboos of Fascism. She grew up with a single mother in a working-class area of Rome, and being a woman, and mother, has been central to her political identity. She once ran for mayor while pregnant because she said powerful men had told her she couldn’t. Her most famous speech includes the refrain “I am a woman. I am a mother.” Being a woman has also distinguished her, and marked a major shift, from her coalition partners, especially Mr. Berlusconi, the subject of endless sex scandals.But Ms. Meloni, Mr. Berlusconi and Mr. Salvini share a hard-right vision for the country. Ms. Meloni has called for a naval blockade against migrants and spread fears about a “great replacement” of native Italians. The three share populist proposals for deep tax cuts that economists fear would inflate Italy’s already enormous debt, and a traditionalist view of the family that liberals worry will at least freeze in place gay rights and which could, in practice, roll back abortion rights.Despite the constraints of an Italian Constitution that is explicitly anti-Fascist and designed to stymie the rise of another Mussolini, many liberals are now worried that the right-wing coalition will erode the country’s norms. There was concern that if the coalition were to win two-thirds of the seats in Parliament, it would have the ability to change the Constitution to increase government powers. From left to right, Matteo Salvini, Silvio Berlusconi, and Giorgia Meloni attending the final rally of the center-right coalition in Rome on Thursday.Alessandra Tarantino/Associated PressOn Thursday, during one of Ms. Meloni’s final rallies before the election, she exclaimed that “if the Italians give us the numbers to do it, we will.”But the coalition appeared not to hit that mark. The main party of the left, the Democratic Party, all but guaranteed its defeat by failing to heal its differences with other liberal and centrist parties, including a new group of moderates. The moderates, backed by former Prime Minister Matteo Renzi, and attracting some former leaders of Mr. Berlusconi’s party, who were disillusioned with his following of the hard right, did better than expected, but still seemed to remain in the single digits.What really held the right back from a landslide were their former governing partners, the Five Star Movement, the once anti-establishment movement that triggered the collapse of Mr. Draghi’s government when it revolted in July.In 2018, the party’s burn-down-the-elite rhetoric led it to become the country’s most popular party and largest force in Parliament. Years of governing — first with the hard-right Mr. Salvini, and then with the Democratic Party, and then under Mr. Draghi — exposed its incompetence and infighting and it imploded. It seemed on the brink of extinction. But during the campaign, led by former Prime Minister Giuseppe Conte, the party surged in the country’s underserved south.That development was mainly because Five Star passed a broad unemployment benefit known as the “citizen’s income,” which though roundly criticized by moderates and the right as a handout to the lazy and a disincentive to work, has become a cherished benefit.As a result, Five Star appeared to be becoming the party of the south.“This is what is emerging,” said Angelo Tofalo, himself a southerner and a leader in the party, as he cheered Mr. Conte, at a rally in Rome on Friday. He said the party had laid down deep roots in the south, but acknowledged, “the citizen’s income is a factor.”That unexpected strength ate into Ms. Meloni’s support, while she devoured the backing of the League party of Mr. Salvini. Only years ago he was the country’s most popular populist. Now he appeared to sink to single digits. Mr. Berlusconi, once the hinge upon which the coalition turned, and who legitimized the marginalized post-Fascists and secessionist League in the 1990s, also registered a modest result.But together they had enough to govern and Ms. Meloni had the clearest claim on the office of prime minister during negotiations and consultations with Italy’s president, Sergio Mattarella, which will take place over the next month. The new government is likely to be seated in late October or early November.But the message of the end of a period of European taboos, and of new change, has already been sent.Ms. Meloni said in one of her last interviews before the election that her victory would be “a redemption” for all the people who “for decades had to keep their heads down” and who had an “alternative vision from the mainstream of the system of power.”Elisabetta Povoledo More