Senior Italian officials are worried that the grandstanding of Giorgia Meloni's most dangerous ally could upset the delicate balance in the governing coalition, jeopardizing her commitment to spending restraint and the stability of the administration.
Despite her partners' sympathies for Russia and impatience with European Union deficit rules, the far-right prime minister has so far taken a more moderate stance on the issues that matter most to investors, containing spending to avert a selloff in Italian debt and, on the whole, maintaining good relations with Italy's allies. As a result, the spread between Italian and German 10-year bond yields, a key gauge of political risk, has narrowed by almost 50 basis points since her election victory in September.
