Discover Le Grand Continent. Ideas and analyses you won’t find anywhere else. But you’ll see them everywhere soon. In your inbox from 8 euros per month
If the history of the Italian Republic is punctuated by decisions made beyond its borders, these should not be read as merely foreign policy. The shaping of majorities, the economic choices, and the functioning of institutions have been deeply influenced by Western alignment, participation in European integration, monetary arrangements, euro membership, 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 examined: it could paint an overly simple image of a country receiving instructions from abroad—an appealing image for conspiracists of all stripes.
The ruling classes in Italy have frequently sought out and negotiated international commitments themselves. They saw in this a path to gain resources, credibility, and a continuity of direction that domestic politics could scarcely guarantee.
A first pertinent definition of the term “external constraint” was proposed by Emidio Diodato. He dates the first occurrence of this term to the year 1953. It appears in the annual report of the Bank of Italy. It identified the European organization as an opportunity for Italy to limit its economic policy errors. But it was only with the analyses of Guido Carli that this notion became a true interpretive key to the history of the Italian Republic.
State autonomy can be restricted by external constraint, yet its capacity for action can be enhanced by it. Similarly, postponing a reform may become more costly, yet internal resistances—if not insurmountable—can be overcome. Or, if external constraint can serve as an alibi to legitimize a measure supposedly dictated by the Union or by the markets, it also protects a strategic choice against the vagaries of national politics. The impact of external constraint on the Italian Republic cannot be captured solely by questioning how much sovereignty has been ceded. One must more broadly observe who chose this constraint, for what purpose, with what negotiating margins, and with what results for citizens.
At the Maastricht turning point, Carli did not merely see European integration as a set of obligations to be respected; even more, he saw it as a tool capable of transforming the Italian ruling class.
The definition of Diodato differs from the commonly held view that all states are subjected to international pressures. He instead perceives external constraint as a political choice made within a broader order, so that order can in turn influence internal decisions as if by a cascading effect. How does it exert its force? If a majority can change or a government can fall, treaties, common rules, market mechanisms and their credibility are, in contrast, enduring. A decision taken at the international level thus gradually alters the feasible margins at the national level. It does not eliminate alternatives, but it alters their cost, making it harder to adopt those that would be incompatible with the obligations undertaken.
For Carli, resorting to this mechanism answered a pessimistic reading of the country’s situation. Indeed, he argued, the Italian political class had a habit of deferring necessary reforms to control spending, because any attempt immediately met with resistance from the groups involved. Obtaining consensus to implement long-term measures had become extremely difficult. To escape this political deadlock, the idea emerged to subject Italy to European obligations with enough force to continually compel the country to adhere to financial discipline, not merely in emergencies. According to Carli, without this international legal constraint acting as pressure, the political class would probably not have undertaken the sanitation of public accounts.
It is at this point that Diodato observes both the relevance and the ambivalence of Carli’s reading. Choosing the “external constraint” is not merely about taking a side in favor of the single market. In Carli’s approach, it becomes even more a political maneuver to mold an institutional framework that can transform the rules of the Italian economy. European anchoring should suffice to support monetary and budgetary discipline, a reduction in spending, privatizations, and reforms of labor and pensions. Yet, in Carli’s liberal project, more than an anchor, the European framework provides, from above, directives to a country deemed refractory to reforms and thus directly influences the general economic structure. In this sense, Carli’s project could be described as “Jacobin.”
Maastricht thus represented not merely a ratified treaty, but a text with constitutional reach. By transferring monetary sovereignty and the supervision of budgetary policies, the relationship between political decision and economic rule was altered. The role of the technocrat was no longer limited to supplying expertise to the government; he guaranteed even more the continuity of commitments undertaken at the European level, assuming that the representative system was not capable of ensuring it. This raises a democratic question. External constraint can certainly help correct mistakes and commit to long-term obligations; it can thereby strengthen the state’s capacity. However, by constantly substituting itself for deliberation and political responsibility, it could erode the meaning of choices submitted to voters.
With Gaetano Quagliariello, in Il Principe e la Repubblica, we developed an analysis that repositioned this mechanism of “external constraint” within a broader institutional history. Examining the Constitution and the formal powers of the Republic’s bodies is not enough to understand it. One must also study its material constitution—the actual relationships between parties, governments, administrative apparatuses, intermediary bodies, and supranational powers. This analytic framework allows us to view treaties and alliances not as an immutable backdrop, but as tools capable of steering a country’s political orientation and its internal power dynamics. Thus, even though the “external constraint” is not embedded within a national institution, it can have direct consequences on the actions of political forces—even the most radical ones, as we will see later. The “external constraint” thus has a “pre-political” value.
Before the External Constraint
We must trace the history of the Republic’s emergence to understand the strong intertwining of national and international scales in the Italian case. The young Republic was born in a context of heavy dependence on the international stage. A defeated country, Italy was then engaged in reconstruction and lay on the fault line of the Cold War. Its democratic stability depended very strongly on its relations with the United States, on American aid, on the Atlanticist choice, and on the launching of European integration. In this sense, the 1948 elections are highly representative of this strong intertwining between domestic political games and international debates. Among the electoral issues were the future of American aid and Italy’s belonging to the Western camp. Yet Alcide De Gasperi cannot be reduced to a mere executor of decisions that would not belong to him. He, more than any successor, seized this position to restore the country’s credibility and regain some room for maneuver.
Populism did not disappear thanks to external constraint, but it limited the immediate translation into government choices.
Lorenzo Castellani
It is for this reason that Diodato invites us to move away from a reading that reduces the foreign policy of the First Republic to a passive balancing act or to one dependent on external will. For a country that emerged defeated from war, spaces opened up by multilateralism allowed it to negotiate, obtain recognition, and defend its interests. Joining international economic institutions and participating in European construction did not only bring constraints; they offered new possibilities. Foreign policy thus played a major role in the construction of a large industrial economy in Italy. Putting international integration at the service of national strategy was even a crucial question from the late 1940s to the early 1950s.
The choices of economic and industrial policy in Italy up to the 1970s cannot be described without distinguishing between the “external constraint” (vincolo esterno) and the “foreign constraint” (vincolo estero). Giovanni Farese explains that talking about an “external constraint” corresponds more accurately to the reality of that period. It refers to the balance necessary with foreign accounts. Here is how the mechanism works: for an economy that must import raw materials, energy, technologies, and capital goods, it is essential to obtain foreign currency, either through exports or other revenues. Thus, if a gap opens between imports and the production of foreign exchange, the development policy pursued can be interrupted or slowed. The balance of payments is thus essential and acts as a constraint. This does not stem from a rule laid down by an international organization, but is linked to Italy’s position in world trade and payments.
Decisions that might have seemed internal were thus directly affected by the external constraint: industrial expansion increased import needs; the balance of payments could be jeopardized by a surge in demand; or growth could be slowed, or production priorities altered to defend the currency. One should also consider the impact of the international context—the trade relations or the availability of financing—on internal decisions. These factors did not alone dictate a policy: the choice of how to respond and which social groups to bear the costs rested with governments. However, governments could not ignore this external balance issue.
If this distinction between “external constraint” and “foreign constraint” helps with reading, it should not be seen as a rigid two-period grid. Postwar Italy was steered by international agreements, for instance; and Italy after 1970 was also subject to the balance of payments. This distinction is more about identifying a shift in the political interpretation of this constraint. The “foreign constraint” presents itself as an economic condition; while the “external constraint” will be defined in the European era as an institutional commitment deliberately chosen to influence national choices. There is thus continuity from one to the other: both acknowledge interdependence. But, in the case of the “external constraint,” the aim is not only to acknowledge interdependence but to turn it into an internal code of conduct—something not achieved without difficulties and challenges in the realm of political legitimacy.
Europe as Discipline
One can identify the signing of the European Monetary System (EMS), decided in 1978 and effective in 1979, as the turning point. The link between Italian economic policy and partner choices was tightened by this commitment to limit the lire’s fluctuations against other participating currencies. Paying attention to inflation, wages, spending, and the credibility of budget policy becomes essential to defend the exchange rate. This is not merely a technical question, since it also affects the cost of national decisions and constrains delaying consequences indefinitely.
The multiplicity of these issues was highlighted by the debates around joining the EMS. At the Bank of Italy, there was fear that a loss of monetary margins would not be compensated by sufficient budget discipline. Among political forces, there were concerns about effects on public spending and wage policy: the Communist Party (PCI) opposed immediate membership, while the Socialist Party (PSI) abstained. The crisis of the “national solidarity majority” (1976–1979) was thus worsened. Although the lire enjoyed a wider fluctuation margin than other currencies—sign of negotiations over entry conditions—joining nonetheless meant that the study of choices within the country could not ignore European promises.
The workings of external constraint can be observed concretely through the EMS. For example, it raises the cost of policies incompatible with a common commitment, provides arguments to governments to push through reforms or demand sacrifices, strengthens institutions that guarantee stability, or compels parties to deal with consequences that go beyond the national frame. The EMS thus does not erase political conflicts, but changes the terrain: discussing objectives is no longer enough; 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 took place in this transforming context. Free from the obligation to buy unsold securities, the central bank gained autonomy, but the cost of debt became more visible. It should also be noted that strengthening monetary discipline did not systematically accompany the development of a capacity among parties to correct spending or reform the budget. Throughout the decade, a gap widened—the mechanisms that made limits stricter evolved faster than political practices adapted to them.
Thus, Italy in the 1980s should not be seen as a passive actor in integration. In 1985, under Italy’s presidency of the Community, Bettino Craxi helped overcome opposition to the Single European Act. But while the country continually sought its place within the Community project, advancing the single market urgently required adapting the economy, the financial system, and the administration—an effort that was only partially addressed. One can view those years as a missed opportunity to better manage external constraint: if the European framework evolved, the old internal habits did not. Far from being seen as a motor for modernizing the state, external constraint was increasingly felt as a framework to be complied with at the minimum.
Maastricht: Carli’s Bet
Carli’s approach reaches its peak in 1992 with the Maastricht Treaty. The prospect of a single currency and the 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 framed by common obligations.
The Maastricht treaty comes at an extremely difficult moment for Italy: at the end of the Cold War, it had lost its international reference points, while German reunification, the Gulf War, the breakup of Yugoslavia, and the Albanian crisis had weakened its position as a regional power. The First Republic was also traversing a financial, political, and judicial crisis.
According to Diodato, for Carli the choice of European integration thus offered a response to this double crisis: that of public finances and Italy’s standing on the international stage. European construction should provide the country with a stable framework and shield it from decline caused by budgetary drift and political inertia. Carli also hoped that the constraints inherent to the European framework would perform a pedagogical function: discipline, initially perceived as imposed, would give rise to new habits within the ruling class, until it became the norm.
The aim was thus to obtain through international constraint what ordinary political competition had failed to achieve. Yet such a strategy hands over a decisive role to technocrats and independent institutions in defining economic orientation, a dimension that is, in itself, problematic. If the choice is political, its implementation is presented as a technical necessity. This allows governments to claim credit for EU integration while shedding responsibility for the steps taken to meet the obligations arising from that integration. The technocracy is thus entrusted with safeguarding commitments that are not neutral, and which majorities might be tempted to challenge.
But in September 1992, the lire crisis demonstrated that even though Italy had subscribed to an obligation, it was not prepared to honor it. The exit from the EMS, the devaluation, and the Amato government’s emergency measures highlighted the country’s accumulated delays. The European commitment, far from erasing these structural weaknesses, made their costs more visible. In the wake of this crisis, successive governments set the adoption of a single currency and the consolidation of accounts as structural objectives.
The Governments and the Constraint
The Second Republic thus emerges within a framework already shaped by European choices. For the center-left, entry into the euro embodies the financial rigor, reliability, and modernization necessary for Italy’s normalization. The Prodi government pursues this objective while trying to maintain cohesion within a majority divided on social protection, economic reforms, and certain aspects of foreign policy. But even if the objective is achieved, the contradictions persist.
Thus, the aim was to obtain through the external constraint what ordinary political competition had not achieved.
Lorenzo Castellani
For Diodato, the country suffered from the inability of the ruling class to transform a project marked by European rigor into a proposition combining stability and growth. In other words, budgetary discipline alone could not serve as a development strategy.
There remained issues to be resolved at the national level: productivity, firm size, innovation, administrative quality, and industrial capacity. Italy’s lag occurred gradually: the decline of sectors of heavy industry and the inadequate transformation of the production model had weakened the country, even as the economy internationalized and the monetary union demanded greater adaptability. If the euro guaranteed stability and membership in a shared monetary zone, it did not dictate where to invest or what reforms to undertake.
European constraint thus took on different meanings depending on political sides. On the center-left, it was seen as a guarantee of credibility and a tool for modernization. On the center-right, it highlighted Maastricht’s limits and demanded greater national room for maneuver. Their disagreement was thus not about a difference of views on multilateralism as such—the two camps saw constraint as a tool of Italian foreign policy—but rather about the value given to the European framework and the degree to which they could escape its logic. Despite their different readings, both faced the same challenge: to reconcile financial stability, economic growth, and social consensus.
The sovereign debt crisis only amplified the difficulty of this equation. In 2011, the spread became a political issue unknown to most voters. More than a measure of the relative cost of debt, the yield gap on government bonds signaled the government’s credibility and its ability to honor commitments. Alongside the weakening of the parliamentary majority, pressures came from markets, European institutions, and the European Central Bank. It was in this context, with very limited room for maneuver, that Monti’s government arose, backed by a broad majority.
This political episode is telling because it highlights the most controversial aspect of external constraint. Indeed, while constitutional procedures were not interrupted—the government was formed by the President of the Republic and confidence was voted by Parliament—the decisions taken were perceived by a portion of public opinion as imposed by a state of emergency and conceived outside the normal democratic debate. If Italy gained international credibility during this austerity period, the social cost of adjustment and the fragility of the economy sparked a strong populist reaction.
One could describe this episode as Italy entering a spiral of “de-democratization.” It is not a collapse of liberal democracy, but a risk of its inefficacy if national decision-makers cannot translate commitments into opportunities for the country. But one must be able to distinguish unavoidable decisions from those still contestable. An exercise made difficult for voters, confronted with governments attributing to Europe choices they do not want to bear, or with oppositions claiming to ignore obligations that will remain valid in case of electoral victory. Democracy thus is weakened not only by external constraint but also by politics’ inability to manage it and 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 would suffice to solve the country’s problems. Born from the agreement between the Five Star Movement and the League, Conte I’s government sought more freedom in economic policy and challenged some of the postulates of the established order. Yet a gap appeared between the will to oppose constraint and the ability to govern a state subject to it. A continuous negotiation was required by the need to finance debt, relations with the Commission, euro stability, and market reaction. These factors did not exclude any alternative, but they made costly those that went against Italy’s core commitments.
The external constraint thus moderated forces. Those who had strongly attacked it during their electoral campaigns found themselves governing within narrower margins. They were called to revise their goals, negotiate with European institutions, and evaluate their promises in light of financial viability. Far from being linear, this adjustment did not occur without conflict. Yet, governmental responsibility appears as a throttle on the most radical positions that clash with irremovable commitments and immediately perceptible costs.
One can observe the same dynamic after 2022, though 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 seeking international credibility, prudence in early budgetary choices, relations with the President, and the need to respect PNRR commitments. External constraint is not the sole factor behind this more moderate stance; institutional incentives, strategic considerations, and policy choices also played a role. But it cannot be denied that the array of commitments Italy undertook reduced the room for a radical break.
The PNRR changes the game
The external constraint took on a new form with the National Plan for Recovery and Resilience. Access to resources still depends on meeting deadlines and achieving verifiable objectives. However, the logic is no longer solely about budgetary discipline. Shared funding, reforms, investments, and evaluation of outcomes are all integrated through “Next Generation EU.” It is no longer only about identifying the limits the state must respect, but also about asking what can be concretely achieved with the available resources.
The 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 Union institutions, while the plan for each member state is defined at the national level. Each state chooses the measures and priorities and sets up the organization to implement them. The evaluation of the plan, the monitoring of commitments and progress, and the verification of objective achievement are carried out with the assistance of the Commission. The Council is charged with approving or making possible modifications. Brussels does not impose a unilateral order; it is built in collaboration with the national institutions that are essential to taking commitments and implementing them.
Lupo thus prefers to speak of “auto-commitment” in the framework of the PNRR. Italy, for example, chose to present the plan, define its content, while respecting the common priorities and procedures. Meeting deadlines and control modalities are therefore essential to access resources, and unilaterally altering commitments is not possible. Carli’s classic formula is thus very different in this respect. Here, commitment is not merely a lever to make an irresponsible policy harder to implement; it also weaves together funding, administrative programming, and expected results within the same decision-making circuit in which Rome and Brussels participate. The technocracy is thus entrusted with guarding commitments that are not neutral and that majorities might be tempted to challenge.
A misunderstanding of sovereignty can also be avoided with this reading. Whether Italy participates in European institutions or has chosen to undertake certain commitments does not negate the limits that follow. If, once the plan is approved, successive governments must adapt to objectives and deadlines they did not define themselves, these limits do not make Italy a passive actor. It should 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 see it as a calendar of obligations to be fulfilled, otherwise European disbursements would be halted. This reading reproduces the logic of the “minimum necessary” already observed in earlier stages of integration. A second way would be to view the plan as a vehicle for integration, capable of stimulating planning, coordination, and implementation capacities and transforming a consensual constraint into a governance resource. The challenge proved particularly severe for a state whose many difficulties do not lie so much in the formal possibility of deciding as in the ability to carry a decision through to its end. The gap between announcing a commitment and its realization was made even more visible by the results constraint. And by itself, this latter 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 dynamics. What about its evolution? A more complete assessment will come when one knows whether devices like “Next Generation EU” will remain occasional or become more frequent and institutionalized.
Italy, France, and Prudence in the Face of External Constraint
To conclude this survey of Italian history, one can observe an evolution in the function of external constraint. Security and means of reconstruction 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 was then marked by the exposure, under joint pressure from markets and European institutions, of 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, funds availability and the ability to meet commitments—including by Italy—are linked. Thus, at each of these stages, constraint never wholly replaced national choice; instead, it profoundly affected the cost of alternatives.
There was a gap between the will to oppose constraint and the capacity to govern a state subjected to it.
Lorenzo Castellani
Moderation of forces appears 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. Meeting treaties, alliances, debt maturities, investor expectations, and more recently PNRR commitments, they could challenge some rules and negotiate margins of flexibility, but they could not act as if these ties did not exist. In the years to come, one will also need to add SAFE commitments to which they will also confront. For what result? Realistic adaptation, sometimes accompanied by rhetoric more confrontational than the decisions actually taken. Populism did not disappear thanks to external constraint, but this constraint limited the immediate translation into government choices. This mechanism did not always work well, but it has asserted itself in the last decade of Italian history as a prudent device in the face of forces that have come to power. It underpins now the material constitution of the Italian Republic.
The external constraint appears as a key interpretive tool for France today—without assuming that its future will replicate Italy’s. Its political weight within Europe, its state tradition, its diplomatic resources are different, but the link between internal decisions and external judgment is tightened in the face of parliamentary instability, budgetary difficulties, and pressure on government bonds. The 2027 budget project presented by the French government aims to reduce the deficit, but it must contend with a divided Parliament and an opposition to unpopular measures. In early October 2026, the yield on French 10-year government bonds hovered near 5%, while public debt stood at around 119% of GDP in the second quarter. Those figures signal strong pressure on government choices, even if insolvency is not imminent.
In the Italian case, Mario Draghi has always been seen as a sort of two-faced Janus: on one hand the “autopilot” man implementing the reforms proposed by the Union, assuming there is no alternative; on the other, the man of “whatever it takes” defending the euro and the most exposed countries to speculation as his own country. What does he say about the French situation today? He does not change his approach. His view remains the same as it was on Italy: the Union is at once a bitter remedy and an opportunity to cushion situations that could otherwise deteriorate.
What does the Italian experience tell us about French forces that criticize the Union today and promise higher spending? They should not be immune to obstacles if and when they come to power. A majority can challenge European priorities, choose how to distribute budget adjustments, or negotiate with partners. Financing the State, convincing investors to buy its bonds, and complying with common rules to which it itself contributed remains necessary. The moderation mechanism observed in Italy could thus apply to France as well if pressure on accounts and yields persists. Do not misunderstand this mechanism as an ideological conversion of populist or eurosceptic forces, but as a pragmatic adaptation in response to the actual limits faced by government action.
However, one should not conclude from these episodes of Italian political history that external constraint could resolve the latent political problem. If it can contain a sudden rupture and push governments to acknowledge the reality of accounts and commitments, it cannot substitute for a majority capable of deciding who should bear the costs of consolidation, which investments to preserve, and how to render a growth perspective credible. The political legitimacy needed to overcome social fractures and political polarization cannot be guaranteed by external constraint alone. Indeed, it tempers radical promises without necessarily delivering tangible social and political results. A gap between politics and voters can even widen. Impose a line from outside is therefore not the most useful function of external constraint. Its primary role is to face ruling classes with the consequences of their promises and to publicly account for their choices.