Meloni’s helps Italy shake high-risk reputation, but challenges remain
Italian Prime Minister Giorgia Meloni at Palazzo Chigi on July 20, 2026 in Rome, Italy.
Simona Granati | Corbis News | Getty Images
Greater political stability under Prime Minister Giorgia Meloni’s government has boosted Italy’s appeal in the eyes of international investors, but the country’s former leaders say more needs to be done.
Speaking to CNBC on Friday, two former prime ministers of Italy said reform is necessary to boost the Mediterranean country’s stuttering economy.
On Friday evening, Meloni’s coalition government, which took office in October 2022, held a rally in the port city of Bari to mark its becoming Italy’s longest-serving cabinet since World War II.
“In these years we have worked to increase employment, reduce unemployment, support families and businesses, strengthen security, manage public finances with seriousness, and restore to Italy weight and credibility on the international stage,” Meloni said in a translated statement on Friday.
Italy’s economy slows
The milestone is particularly notable in a country long associated with political instability — a problem heightened by the 2010 to 2012 euro zone sovereign debt crisis — with 68 governments serving over 80 years.
“Frequent changes in government is becoming normal in other countries, and stability is becoming normal in Italy. Amazing,” Paolo Gentiloni, Italian prime minister between December 2016 and June 2018, told CNBC’s Carolin Roth.
“At the same time, [Meloni’s record is] good for a certain caution in public finances that brought our spread down. But this is all, and longevity is not something sufficient for a government.”
Gentiloni said Italy had seen a “very good rebound” following the pandemic, which has slowed in the last two to three years.
Italy’s economy grew by 0.5% over the course of 2025, below the euro area average of 1.5% and one of the slowest rates in the bloc. The Italian employment rate remains solid, but youth unemployment stood at 18.9% in July, above the euro area average of 14.9%.
“This, of course, is a failure,” Gentiloni said. “In the last two or three years, we see the [spending] power of families going down, and this is a reason for the government not to be so satisfied as it’s looked.”
‘Power softens extreme positions’
Mario Monti, prime minister of Italy from 2011 to 2013, told CNBC that Meloni had stayed the course because she was a “very smart politician” — and because “she has not done much.”
“She has carefully avoided those confrontations with segments of society that might have modernized the economy through an injection of more competition and competitiveness, but which would have cost her political consensus,” Monti, now president of the Javotte Bocconi Institute, said.
Italy needs structural reforms, including a clampdown on tax evasion, full application of its competition laws, and a willingness to “inject more vitality” into the economy “through a bit more destructive creation,” Monti said.
Meloni’s premiership is being closely…
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