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If the history of the Italian Republic is punctuated by decisions taken outside its borders, these should not be understood as mere foreign policy. The making of majorities, economic choices, and the operation of institutions were deeply influenced by anchoring in the Western camp, participation in European integration, monetary arrangements, adherence to the euro, and more recently, the National Recovery and Resilience Plan (PNRR). The notion of “external constraint” is often linked to these latter factors, but it deserves to be questioned: it could paint too simplistic a picture of a country receiving instructions from abroad—an image that is especially tempting for conspiracy theorists of all stripes.
The Italian ruling classes often sought out and negotiated international commitments themselves. They saw in these commitments a path to gain resources, credibility, and a continuity of orientation that could not be guaranteed through domestic politics alone.
A first meaningful definition of “external constraint” was proposed by Emidio Diodato. He dates the first occurrence of the term to 1953. It appears in the annual report of the Bank of Italy. At that time, the European arrangement was seen as an opportunity for Italy to limit its economic policy errors. But it was only through the analyses offered by Guido Carli that this notion became a true key to reading the history of the Italian Republic.
The autonomy of a state can be limited by external constraint, yet its capacity to act can be enhanced by it. Likewise, postponing reform can become more costly, but internal resistances—if not insurmountable—can be overcome. Or, if external constraint can serve as an alibi to justify a measure supposedly dictated by the EU or the markets, it can also protect a strategic choice against the vagaries of national politics. The impact of external constraint on the Italian Republic cannot be grasped merely by asking how much sovereignty has been ceded. One must more broadly consider who chose this constraint, for what purpose, with what negotiation margins, and what outcomes for citizens.
At the Maastricht turning point, Carli did not merely perceive European integration as a set of obligations to be met; more than anything, he saw it as an instrument capable of transforming the Italian political class.
Diodato’s definition differs from the commonly held view that every state is subject to international pressures. He perceives external constraint instead as a political choice made within a broader order, so that it subsequently influences internal decisions through a cascade effect. How does it exert its force? If a majority can change or a government can fall, treaties, common rules, financial market mechanisms, and their credibility remain enduring. A decision taken at the international level gradually modifies the margins of possible action at the national level. It does not eliminate alternatives, but it changes their cost and makes it harder to adopt those that clash with the obligations undertaken.
For Carli, resorting to this mechanism reflected a pessimistic reading of the country’s situation. Indeed, he argued that the Italian political class was accustomed to postponing necessary reforms to control spending because any attempt would immediately clash with the opposition of interested groups. Achieving a consensus to implement long-term measures had become extremely difficult. To break free from this political deadlock, the idea emerged to subject Italy to European obligations with enough force to compel the country to permanently adhere to financial discipline—not merely in emergencies. According to Carli, without this international legal constraint acting as pressure, the political class would probably never have tackled the repair of public finances.
On this point, Diodato observes both the relevance and the ambivalence of Carli’s reading. Choosing the “external constraint” is not simply about siding with the single market. In Carli’s approach, it becomes even more a political maneuver to shape an institutional framework that could transform the rules of Italy’s economy. The European anchoring should suffice to sustain monetary and budgetary discipline, a reduction in spending, privatizations, and reforms of labor and pensions. Yet, in Carli’s liberal project, the European framework does more than provide an anchor: it offers, from above, directives to a country deemed resistant to reforms, and directly influences the general economic structure. In this sense, Carli’s project could be described as “Jacobin.”
Maastricht, thus, represented not only a ratified treaty but also a text with constitutional reach. Through this transfer of monetary sovereignty and the supervision of budgetary policies, the relationship between political decision-making and economic rule was altered. The role of the technocrat ceased to be merely supplying expertise to the government; it became, more than ever, guaranteeing the continuity of commitments undertaken at the European level, assuming that the representative system alone could not ensure it. This raises a democratic question. External constraint can certainly help correct errors and uphold long-term commitments, but by repeatedly substituting itself for deliberation and political responsibility, it risks hollowing out the meaning of choices laid before voters.
With Gaetano Quagliariello, in Il Principe e la Repubblica, we developed an analysis that places this mechanism of “external constraint” within a broader institutional history. Examining the Constitution and the formal competences of the Republic’s institutions is not enough to understand it. One must also study its material constitution—the actual relationships among parties, governments, administrative apparatuses, intermediary bodies, or supranational powers. This analytical framework allows us to view treaties and alliances not as a fixed backdrop, but as tools capable of steering a country’s political orientation and its internal power dynamics. Thus, although the “external constraint” is not inscribed within a national institution, that institution can nonetheless have direct consequences on political forces—even the most radical ones, as we will see later. The “external constraint” therefore has a “pre-political” value.
Before the External Constraint
We must trace the emergence of the Republic to understand the strong intertwining of national and international scales in the Italian case. The young Republic was born into a context of heavy dependence on the international arena. A defeated country, Italy was engaged in reconstruction and stood on the front line of the Cold War. Its democratic stability depended heavily on relations with the United States, American aid, an Atlanticist stance, and the launch of European integration. In this regard, the 1948 elections are highly representative of this deep intertwinement between internal political battles and international debates. Among the election issues were the future of American aid and Italy’s belonging to the Western bloc. Nevertheless, Alcide De Gasperi should not be reduced to a mere agent of decisions that did not belong to him. He, more than any of his successors, seized this position to restore credibility to the country and regain room to maneuver.
Populism did not disappear thanks to the external constraint, but the constraint limited its immediate translation into government choices.
Lorenzo Castellani
This is why Diodato invites us to move beyond a reading that would reduce the foreign policy of the First Republic to a passive balancing act or to dependence on external will. For a country that emerged from war as a vanquished power, the spaces opened by multilateralism allowed negotiation, recognition, and the defense of its interests. Joining international economic institutions and participating in European construction did not merely entail constraints; they offered new possibilities. Foreign policy thus played a major role in building a large industrial economy in Italy. Deploying international integration in service of national strategy was a crucial issue from the late 1940s through the early 1950s.
The choices of economic and industrial policy in Italy up to the 1970s cannot, however, be described without distinguishing between “external constraint” (vincolo esterno) and “external constraint” (vincolo estero). Giovanni Farese explains that talking about an “external constraint” more accurately reflects the reality of this period. It refers to the balance required with foreign accounts. Here is how the mechanism works: for an economy that must import raw materials, energy, technologies, and capital goods, it is necessary to obtain foreign currencies, either via exports or other revenues. Thus, if a gap grows between imports and the production of currencies, the development policy may be interrupted or slowed. The balance of payments balance is essential, and acts as a constraint. This constraint does not arise from a rule laid down by an international organization, but is tied to Italy’s position in global trade and payments.
Decisions that might have seemed internal were thus directly affected by external constraint: industrial expansion increased import needs; the balance of payments could be undermined by an acceleration in demand; or growth could be slowed, or production priorities altered, to defend the currency. We should also consider the impact of the international context—the state of trade relations or the availability of financing—on internal decisions. These various factors did not alone dictate a policy: the choice of how to respond and which social groups to place the burden on remained with the governments. Yet, these governments could not ignore this external balance issue.
While this distinction between “external constraint” and “external constraint” helps with a better reading, one should not view it as a rigid two-era grid: postwar Italy was guided by international agreements, for example; and Italy after 1970 remained subject to the balance of payments. The distinction is more useful for identifying a shift in the political interpretation of this constraint. The “external constraint” presents itself as an economic condition; whereas the “external constraint” would be defined in the European era as a deliberate institutional commitment to influence national choices. There is thus a continuity between the two: both acknowledge interdependence. But in the case of the “external constraint,” one does not stop at acknowledging interdependence, one attempts to transform it into an internal rule of conduct—an effort that does not proceed without difficulties and with political legitimacy contested.
Europe as Discipline
One can identify the adhesion to the European System of Central Bank (ESCB) and the European Monetary System (EMS), decided in 1978 and effective in 1979, as the turning point. The link between Italian economic policy and partners’ choices was tightened by this commitment to limit the lire’s fluctuations against participating currencies. Being attentive to inflation, wages, spending, and the credibility of budgetary policies became essential to defend the exchange rate. This is not merely a technical matter, since it also affects the cost of national decisions and reduces the possibility of postponing consequences indefinitely.
The multiplicity of these issues became evident during the debates surrounding EMS membership. At the Bank of Italy, there was fear that a loss of monetary autonomy would not be matched by sufficient budgetary discipline. Among political forces, concerns about impacts on public spending and wage policy arose: the Communist Party (PCI) opposed immediate membership, while the Socialist Party (PSI) abstained. The crisis of the national solidarity majority (1976–1979) was thus aggravated. If the lire’s margin of fluctuation was broader than for other currencies—symbolizing negotiations on engagement conditions—joining meant that the country’s internal choices could not be analyzed without considering European promises.
The operation of external constraint can be seen concretely through the EMS. For instance, it raises the cost of policies that run contrary to a common commitment, provides governments with arguments to push through reforms or demand sacrifices, strengthens the institutions that guarantee stability, and compels parties to manage consequences that go beyond the purely national framework. The EMS does not erase political conflicts, but it changes the terrain: discussing objectives is no longer sufficient; one must also debate how to operate to reconcile them with obligations already contracted at the European level.
Even though the “divorce” between the Treasury and the Bank of Italy in 1981 arose from an internal decision, it occurred within this evolving context. Freed from the obligation to buy unsold securities, the central bank gained autonomy, but the cost of debt became more visible. It is also worth noting that the strengthening of monetary discipline did not automatically come with the development of a party capacity to curb spending or reform the budget. Throughout the decade, a widening gap emerged—the mechanisms imposing stricter limits advanced more rapidly than political practices could adapt.
Thus, Italy in the 1980s should not be seen as a passive actor in integration. In 1985, taking advantage of Italy’s presidency of the Community, Bettino Craxi helped to overcome opposition to the Single European Act. But while the country continuously sought its place within the Community project, advancing the single market urgently required adapting the economy, the financial system, and the administration—and this was only partially addressed. These years can be read as a missed opportunity to better manage external constraint: if the European framework was evolving, internal bad habits persisted. Far from being seen as a driver for modernizing the state, external constraint increasingly functioned as a framework to which one should conform at a minimum.
Maastricht: Carli’s Gamble
Carli’s approach culminates in 1992 with the Maastricht Treaty. The prospect of a single currency and its convergence criteria place European integration at the center of national political and economic life. Italy must prepare to transfer its monetary policy to a supranational level and to have its budgetary policy supervised by common obligations.
The Maastricht treaty arrives at a moment of extreme difficulty for Italy: the post–Cold War era has left it without stable international anchors, while German reunification, the Gulf War, the dissolution of Yugoslavia, and the Albanian crisis have weakened its position as a regional power. The First Republic faces a financial, political, and judicial crisis as well.
According to Diodato, for Carli the choice of European integration could respond to both crises: the public finances crisis and Italy’s place on the international stage. European construction should provide a stable framework for the country, shielding it from decline driven by budgetary excesses and political inertia. Carli also hoped that constraints intrinsic to the European framework would serve a pedagogical function: discipline, initially experienced as imposed, would create new habits within the ruling class, eventually becoming the norm.
The aim was thus to obtain through international constraint what ordinary political competition had failed to deliver. Yet such a strategy assigns technocrats and independent institutions a decisive role in shaping economic direction, a dimension that is inherently problematic. If the choice is political, its implementation is presented as a technical necessity. This allows governments to claim credit for integration into the European Union while shedding responsibility for measures taken to meet those obligations. The technocracy, thus, is entrusted with guarding commitments that are not neutral, and which majorities could be tempted to challenge.
In September 1992, however, the lire crisis demonstrated that even though Italy had subscribed to commitments, it was not ready to honor them. The exit from the EMS, the devaluation, and urgent Amato-era measures highlighted the country’s accumulated weaknesses. The European commitment, rather than erasing these structural flaws, made their cost more visible. After this crisis, successive governments would frame the adoption of the single currency and the budgeting consolidation as a structural objective.
Governments and the Constraint
The Second Republic thus emerges within a framework already shaped by European choices. For the center-left, joining the euro signified the discipline, reliability, and modernization necessary for Italian normalization. The Prodi government pursued this goal while trying to maintain cohesion within a divided majority on social protection, economic reforms, and some aspects of foreign policy. Yet if the objective was achieved, contradictions endured.
Thus, it was a matter of obtaining through international constraint what ordinary political competition had not allowed to reach.
Lorenzo Castellani
For Diodato, the country suffered from the ruling class’s failure to transform a project marked by European rigor into a proposition balancing stability and growth. In other words, budgetary discipline alone could not serve as a development strategy.
There remained issues to resolve at the national level: productivity, the size of firms, innovation, administrative quality, and industrial capacity. Italy’s lag gradually emerged: a decline in sectors of large industry and insufficient transformation of the production model left the country fragile even as the economy internationalized and the monetary union demanded greater adaptability. While the euro guaranteed stability and membership in a shared monetary zone, it did not dictate where to invest or which reforms to pursue.
European constraint thus took on different meanings depending on political sides. For the center-left, it was seen as a guarantee of credibility and a tool for modernization. The center-right, by contrast, emphasized the limits Maastricht imposed and sought greater national room for maneuver. Their disagreement was not about a different view of multilateralism as such—both camps saw constraint as an instrument of Italian foreign policy—but about the value attached to the European framework and the possibility, or not, of beyond its logic. Despite their different readings, both sides faced the challenge of reconciling financial stability, economic growth, and social consensus.
The sovereign debt crisis only deepened the difficulty of this equation. In 2011, the spread became a political issue unknown to most voters. More than a measure of debt cost, the yield gap on government bonds revealed the government’s credibility and its ability to meet commitments. As the parliamentary majority weakened, pressure came from markets, European institutions, and the European Central Bank. It was in this context of severely constrained room for maneuver that the Monti government, supported by a broad majority, was formed.
This political episode is instructive because it highlights the most controversial aspect of external constraint. Indeed, while the constitutional procedures did not break—government formation was entrusted to the President and confidence votes were held in Parliament—the decisions made were perceived by part of the public as imposed by an emergency situation and discussed outside the usual democratic debate. If Italy gained international credibility during this austerity phase, the social cost of adjustment and the fragility of its economy sparked a strong populist reaction.
One could describe this episode as Italy entering a spiral of “de-democratization.” It is not the collapse of liberal democracy, but the risk of losing its effectiveness if national decision-makers fail to turn commitments into opportunities for the country. Yet one must still distinguish between unavoidable decisions and those that remain contestable. An exercise difficult for voters, faced with governments attributing European choices they do not want to own, or with oppositions claiming to ignore obligations that will nonetheless remain valid in case of electoral victory. Democracy is thus not only weakened by external constraint but also by the political failure to manage it and to account for it.
Populists and eurosceptics also seized on this fracture to draw strength from it. The 2018 elections marked a break with the idea that European credibility alone could solve the country’s problems. Born from the agreement between the Five Star Movement and the League, the Conte I government sought more freedom in economic policy and challenged some of the established order’s premises. Despite these ambitions, a gap appeared between the will to oppose constraint and the ability to govern a state subjected to it. Ongoing negotiation was required to finance debt, relations with the Commission, Euro stability, and market reactions. These factors did not exclude all alternatives, but they made those that went against core Italy commitments costly.
External constraint thus tempered the forces. Those who had strongly criticized it during election campaigns found themselves governing within narrower margins. They were called upon to revise their objectives, negotiate with European institutions, and assess their promises in light of financial viability. The adaptation was not linear and did not occur without conflict. Yet governmental responsibility emerges as a temporary brake on the most radical positions colliding with difficult-to-revoke commitments and immediately perceptible costs.
One can observe the same dynamic after 2022, albeit in different forms. Despite the victory of a coalition of long-time critics of the Union, there was no rupture with Italy’s European and Atlantic anchoring. The Meloni government’s actions were marked by a search for international credibility, caution in early budget choices, relations with the President, and the need to honor PNRR commitments. External constraint is not the sole factor explaining this more moderate stance; policy choices, institutional incentives, and strategic considerations also played a role. Yet there is no denying that all of Italy’s commitments reduced the room for a radical break.
The PNRR changes the game
The external constraint took on a new form with the National Recovery and Resilience Plan. Access to resources still hinges on meeting deadlines and achieving verifiable objectives. The logic, however, no longer reduces to budgetary discipline alone. Common financing, reforms, investments, and result assessments are combined through “Next Generation EU.” It is no longer only about identifying the limits the state must respect, but about asking what can be realistically achieved with the available resources.
Democracy is not only weakened by external constraint, but also by the inability of politics to manage it and account for it.
Lorenzo Castellani
That is why Nicola Lupo proposes describing the PNRR as an “euro-national” process: the common framework is set by EU institutions, while each member state’s plan is defined at the national level. Each state selects the measures and priorities and organizes how to implement them. Plan evaluation, monitoring of commitments and progress, and verification of objective achievement are done with the involvement of the Commission. The Council is responsible for approving or proposing changes. Brussels does not impose a unilateral order; it is built jointly with the national institutions that are essential to making commitments and implementing them.
Lupo thus prefers to speak of an “auto-commitment” within the PNRR. Italy, for example, chose to present the plan, define its content, while respecting common priorities and procedures. Meeting deadlines and adhering to control modalities are therefore essential to access resources, and unilateral modification of commitments is not possible. Carli’s classic formulation is therefore very different in this regard. Here, the commitment is not only a lever to hinder a policy deemed irresponsible; it also links financing, administrative programming, and expected results within a single decision-making circuit in which Rome and Brussels participate.
A misunderstanding about sovereignty can also be avoided through this reading. Whether Italy participates in European institutions or has chosen to undertake certain commitments does not negate the limits that arise. If, once the plan is approved, successive governments must adapt to objectives and deadlines they did not set themselves alone, these limits do not make Italy a player with zero agency. It should also be noted that the plan has been renegotiated, revised, and adjusted several times in consultation with the European Commission.
There are two ways for the political class to interpret the PNRR. One would be to treat it as a schedule of obligations to be fulfilled, otherwise European disbursements would be suspended. This reading replicates the “minimum necessary” logic already observed in earlier stages of integration. A second interpretation would see the plan as a vector of integration, capable of boosting planning, coordination, and implementation capacities, and turning a conventional constraint into a governance resource. The challenge has proven particularly severe for a state whose many difficulties lie less in the formal possibility of deciding than in the ability to carry a decision through to its end. The gap between announcing a commitment and delivering it has been made even more visible by the requirement for results. And by itself, this constraint did not guarantee the success of every commitment. This potential governance method is thus characterized by a stronger integration of external constraint into the institutional dynamic. What of its evolution? A fuller assessment will come when we know whether devices like Next Generation EU will remain temporary or become more frequent and institutionalized.
Italy, France, and Caution in the Face of External Constraint
To conclude this journey through Italian history, one can observe an evolution in the function of external constraint. Security and reconstruction means were offered to the postwar Republic thanks to its international anchoring. This anchoring took on an increasingly disciplinary character, from the EMS to Maastricht. The year 2011 then highlighted, under the joint pressure of markets and European institutions, the risks posed by a policy unable to prevent the crisis. This constraint finally took the form of a shared program through the PNRR. Within this program, the provision of resources and the capacity to meet commitments—also by Italy—are interlinked. At each stage, the constraint never fully replaced national choice; it always profoundly affected the cost of alternatives.
There was a gap between the will to oppose a constraint and the ability to govern a state subjected to it.
Lorenzo Castellani
The moderation of forces has emerged as one of its most striking political effects. If populists and eurosceptics promised a break with the European order, the Italian case shows that once in government they could not implement their promises. Confronted with treaties, alliances, debt deadlines, investor expectations, and more recently PNRR commitments, they could challenge certain rules and negotiate margins of flexibility, but they could not act as if these ties did not exist. In the years to come, it will likely be necessary to add the SAFE commitments to the list to which they will also respond. To what outcome? The result was a realistic adaptation, sometimes accompanied by rhetoric more confrontational than the decisions actually taken. Populism did not disappear thanks to external constraint, but the constraint limited the immediate translation into government choices. This mechanism did not always function perfectly, but it has established itself in the last decade of Italian history as a prudent device in the face of the forces that came to power. It now underpins the material constitution of the Italian Republic.
The external constraint appears as a useful key to reading for France today—without assuming that its future will mirror Italy’s. Its political weight in Europe, its state tradition, and its diplomatic resources differ, but the link between internal decisions and external judgment remains tight in the face of parliamentary instability, budgetary difficulties, and pressure on government bonds. France’s 2027 budget plan, as presented by the government, aims to reduce the deficit, but must contend with a divided Parliament and an opposition to unpopular measures. By early October 2026, the yield on ten-year French government bonds hovered near 5%, while public debt stood at roughly 119% of GDP in the second quarter. These figures signal strong pressure on government choices, even if insolvency is not imminent.
In the Italian case, Mario Draghi has long been seen as a sort of two-faced Janus: on one side the man of “automatic pilot,” implementing reforms urged by the Union with the sense that there was no alternative; on the other, the man of “whatever it takes,” defending the euro and the most exposed countries to speculation as his own. What does he say about today’s French situation? He does not change approach. His view remains the same as it was for Italy: the Union is both a bitter medicine and an opportunity to cushion situations that might otherwise deteriorate.
What does the Italian experience tell us about today’s French forces criticizing the Union and promising higher spending? They should not be spared obstacles when they assume power. It is possible for a majority to challenge European priorities, decide how to distribute fiscal adjustment, or negotiate with partners. Financing the state, convincing investors to buy its bonds, and complying with common rules to which it has contributed remain necessary. The moderation mechanism observed in Italy could also apply in France if pressure on the accounts and yields persists. This mechanism should not be read as an ideological conversion of populist or eurosceptic forces, but as a pragmatic adaptation to the real limits facing governmental action.
However, one should not conclude from these episodes of Italian political history that external constraint could solve the underlying political problem. If it helps contain a sudden rupture and pushes governments to acknowledge the state of accounts and commitments, it cannot replace a majority capable of deciding who should bear the costs of consolidation, which investments to protect, and how to make growth prospects credible. The political legitimacy needed to bridge social fractures and political polarization cannot be guaranteed by external constraint alone. Indeed, it tempers radical promises without necessarily producing tangible social and political results. A gap between politics and voters can even widen. Imposing a line from outside is therefore not the most useful function of external constraint. Its main role is to force ruling classes to face the consequences of their promises and to publicly account for their choices.