Italy coalition risk rises as Vannacci gains support

Meloni has spent years turning herself into the most durable figure in Italian politics. Her approval rating, around 41%, is still among the highest in western Europe, and her Brothers of Italy party has held up unusually well in an anti-incumbent era. But electoral math is unforgiving. If Vannacci continues to pull nationalist voters away from the League, Meloni’s centre-right coalition could lose the broad base it needs to stay competitive at the next election.

That is why this fight matters well beyond Rome. Meloni has made a moderate, pro-Western foreign policy a central part of her brand, especially on Ukraine. Vannacci is the opposite: he has argued that Russia is not an immediate threat, called for reopened ties with Moscow and wants Europe to ease up on fiscal discipline and defense integration. A stronger Vannacci would not only complicate coalition-building in Italy; it could also weaken one of Europe’s more dependable conservative voices at a time when the continent is already wrestling with fragmentation and fatigue over war, inflation and migration.

Meloni’s response so far has been to harden her line on migration and public order, hoping to reclaim voters who might otherwise drift to the new party. That can work at the margins, but it also carries risk. Lean too far toward Vannacci’s turf and she risks alienating moderates and business-minded voters. Refuse to engage and she may let the challenge grow. For a leader whose strength has always been her ability to outlast rivals, the danger now is that the threat comes from the flank she cannot easily attack without hurting herself.

For long-term investors, the takeaway is straightforward: Italy’s policy direction remains anchored by Meloni for now, but coalition instability is back on the table. That is worth watching for anyone with exposure to Italian bonds, the euro and European equities, because political continuity in Rome has real economic value. The more Meloni can isolate the far right and keep her alliance intact, the better for market confidence. If she cannot, Italy’s political premium could rise again.