Austria's new center-right and far-right coalition government this week proposed giving citizenship to the predominantly German-speaking Italians in the region known as South Tyrol. Italian representatives saw the move as unacceptable interference in the country's sovereignty, and critics even compared the idea with Russia's policy of handing out passports to residents of Crimea, which it annexed from Ukraine in 2014.

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Much to the dismay of politicians in Rome, Austria has long indicated that it views itself as the protecting power of South Tyrol's Italian citizens. With its most recent proposal only days after the new Austrian government's inauguration, Vienna may have crossed a red line, however.

Benedetto Della Vedova, a secretary of state in Italy's Foreign Ministry, called the new plans an example of “ethno-nationalism,” writing that the proposal could have ramifications across the continent. “To grant citizenship based on ethnicity would have extremely serious consequences elsewhere, for instance in the Balkans,” he wrote. "It could lead to the resurgence of territorial demands which would impact the peaceful coexistence of countries in the E.U., too."

Austrian center-right Chancellor Sebastian Kurz later said Italy would have to agree to the measures for Austria to proceed. Italy remains unwilling to grant such approval, but it is concerned that even without its agreement, the proposal may stir tensions.

Before World War I, South Tyrol belonged to neighboring Austria, but it became part of Italy after the conflict's end. The fascist regime of Benito Mussolini originally tried to suppress its regional identity, and even though it gained more autonomy after World War II, complaints over discrimination as a minority within Italy persisted. Seventy percent of South Tyrol residents still speak German and feel closer to the culture of German-speaking Austria than to that of Italy.

The region is mostly autonomous, and its economy is booming, thanks to its large agricultural sector and the swarms of tourists who flock to a region surrounded by the Alps. Voices calling for secession from Italy have always existed throughout South Tyrol’s contemporary history, but regional parties have failed to transform this demand into a more powerful political movement, even though there are some striking parallels to bigger independence movements such as the one in Catalonia. In both regions, a strong identity goes hand in hand with a disproportionately strong economy compared to the rest of the country, even though South Tyrol pays far fewer taxes due to its autonomous status.

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Whereas there is some support for independence and secession in South Tyrol, Austria's far right stands accused of stoking those sentiments further. Throughout his successful election campaign to become vice chancellor, Austrian far-right leader Heinz-Christian Strache demanded the “return [of the] former Austrians to their native country,” according to the Aargauer Zeitung newspaper.

Strache's far-right Freedom Party campaigned on a number of populist claims, including the proposition that Islam is not compatible with Austrian values. Even though Kurz, the chancellor who leads the center-right People's Party, has refrained from co-opting all of the Freedom Party's policy stances, he mimicked much of the controversial rhetoric.

In South Tyrol, the proposal of his government was mostly welcomed, including by the mainstream conservative party. There, the move perceived as pro-secessionist and nationalistic elsewhere in Italy is being seen as pro-European instead. In a bloc without border controls that is aiming to integrate further, double-citizenship could only help to deepen cross-country ties, people in South Tyrol say.

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But others consider the move as a veiled attempt to bind South Tyrol closer to Austria in case the European Union ever breaks apart. Italy is among the bloc's weaker economies and shares some of its problems with other troubled member-states such as Greece and Spain. In the currently unlikely scenario of a breakup, the three countries would probably not be part of a smaller group of core countries that may try to continue to operate as a northern European bloc.

Such concerns were not only expressed in the south of Italy but also by Renzo Caramaschi, the mayor of South Tyrol's capital, Bozen. He called the proposal a "political provocation" and a sign of Austria's "nationalistic turn,” according to Italian news agency ADNKronos.

Even though a split-up remains a theoretical proposal for now, Italy's Olympics association reminded its athletes in South Tyrol this week that the flag they would compete under in the future was the Italian one — and not Austria's.