Giorgia Meloni’s government finds itself in a bind as it faces the black-and-white choice of either renewing the controversial Memorandum of Understanding between Italy and China on the Belt and Road Initiative or unilaterally calling it off. Unless the agreement is interrupted, it will be renewed automatically at the end of the year.

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The Italy-China MoU was signed in 2019 by Giuseppe Conte’s government backed by the Five Star Movement and the League Party. What is known as the “yellow-green” coalition government stood out as Italy’s first fully fledged populist one, as parties from the hard left and right joined forces united by a populist, nationalist and highly Eurosceptic agenda. Those were the years in which Italy’s normally rather stable and predictable foreign policy centred around support for European integration, the transatlantic partnership and strong ties with the Mediterranean region veered dramatically away from the West, strengthening ties with Russia and China in particular. Italy became the first and only G7 country to sign up to China’s BRI. Not only was this a controversial move, it was also a badly negotiated one, which foresaw an automatic renewal of the agreement following its expiry after 5 years.

The hot potato has now fallen onto Meloni’s lap, whose coalition government includes also the League that had enthusiastically backed the BRI in 2019. The choice is not easy. On the one hand, Beijing has hinted (in rather explicit ways) that were Italy to call off the MoU unilaterally, its bilateral relationship with China would suffer, not only from missed opportunities deriving from the agreement (of which there have been few), but perhaps from retaliation too. Whether these will end up being empty threats or substantiated ones is hard to tell now. But the risk is clearly there. On the other hand, with the escalating tensions between Washington and Beijing, Europe tilting towards a derisking of its relationship with China, and the G7 in Hiroshima having issued its strongest and most explicit statement on China to date, the renewal of the BRI would ruffle feathers across the West. All the more so for Giorgia Meloni, whose 'Brothers of Italy' hard right party heeding from a fascist past has been and will continue to be watched closely by partners in Europe and the United States.



Italy should and probably will put an end to the MoU with China. Doing so would also chime with the more assertive line Rome is taking on East Asia, for instance by sending the Morosini offshore patrol vessel on a five month freedom of navigation operation to the region. The Italian patrol vessel will make port calls in several countries in the region and reach the port of Yokosuka in Japan in mid-June. It will also participate in the Indonesia-led “Komodo 23” search and rescue exercise in the South China Sea. It is still unclear whether the Francesco Morosini will transit through the Taiwan Strait. Were it to do so, this would signal clearly that Italy considers the Strait to be international waters – despite PRC’s claim that it is not. Furthermore, the Italian government plans to deploy the flagship Cavour aircraft carrier in the Indo-Pacific. If confirmed, the Cavour will be sent alongside its battle group, consisting of a destroyer, a frigate and a refueller. It will sail to Japan and then carry out joint operations with the US and its Asian allies. Italy’s naval diplomacy is compounded by growing technological and defence-related ties with India and Japan as well as chip-cooperation with Taiwan.

Italy’s deepening relations with East Asian countries, compounded by an eventual termination of the MoU with China, will probably come with a price from Beijing. However, the costs of renewing the MoU in terms of strained relations with the US in particular will be much higher. The best that Rome can do is use the months ahead to mitigate those potential costs by deepening relations with other Asian countries, notably India and Japan, in order to partly compensate for the damage that may come from Beijing. Mistakes come with a price tag, and while responsibility for the past does not lie with her, it rests upon Meloni to pick up the bill.