What does the government crisis mean in Italy?

By Kostas Raptis

Government crises are as Italian as pizza. But a government crisis in Rome at a time when Europe is facing a major geopolitical, economic, energy and pandemic crisis cannot be seen as part of a peculiar Italian “normality”.

Last night, after the co-ruling Five Star party abstained from voting in the Senate on a bill of economic measures, Italian Prime Minister Mario Draghi submitted his resignation to the President of the Republic, which was not accepted. The governing coalition is thus obliged to request next Wednesday a vote of confidence from the parliament, with the open question of whether all the co-ruling parties, as well as the prime minister himself, will continue their common course.

Draghi, 74, is not a career politician and has every incentive to jump ship if he finds his own conditions to govern effectively are not met. After all, he took on a special mission as prime minister, in order to implement, with the authority of the former president of the ECB, the implementation of the Recovery Fund in the third largest economy of the eurozone, which is also its main “weak link”.

The broad-based Draghi government is effectively a “coalition of the unwilling”, ranging from the populist Five Star movement and Mario Salvini’s far-right League, to the pro-European center-left of the Democratic Party and the indomitable Silvio Berlusconi’s Forza Italia. All of them are coming together. by the desire to participate in the province of power, but not by the responsibility of adopting unpopular reforms, but mostly they are united by the fear of the ballot box, as the out-of-government far-right formation Brothers of Italy under Giorgia Meloni has won the poll lead.

The Five Stars under former Prime Minister Giuseppe Conte, who are the protagonists of the current government crisis, are tempted by the prospect of switching to the opposition, as emblematic measures for the same, such as the establishment of a minimum guaranteed income, are not accepted by Draghi. Moreover, they are emerging from their own internal party crisis, as the wing under Foreign Minister Luigi di Maio left the party, forming the Together for the Future formation – reportedly encouraged by Draghi.

The equally awkward Salvini, who is losing intra-party competition with Meloni, says he will make his own stay in the governing coalition dependent on that of Five Star. He has also made sure to make his presence visible, raising disagreements within the majority on issues such as the proposed automatic naturalization of immigrant children who complete five years of study in the Italian education system.

The scenarios that will therefore be decided by Wednesday start from the restart of the government coalition under the same or smaller support base, with Draghi or the veteran Giuliano Amato as prime minister, and reach the “accident” of the mutual neutralization of the different “red lines” and the calling early elections in the autumn – i.e. the time when the country would normally be drawing up its new budget.

In any case, the parliamentary four-year term ends in mid-2023 and many would consider an early renewal of the popular mandate preferable to an extension of the current situation. But Meloni lingers and the following winter is extremely critical for all of Europe.

It is recalled that Draghi has been extremely “military” (at least in words) in the case of defending Ukraine and taking measures against Russia, such as the proposed establishment of a “ceiling” on the price of imported Russian hydrocarbons. For a country with a previously high level of cooperation with Russia, such as Italy, this was a significant shift.

However, it is enough to consider that before and before the vote of confidence on Wednesday, Draghi will visit Algeria, in search of new sources of natural gas supply.

Similarly, Draghi was a confidant for Brussels, Frankfurt and Berlin, but also a potential ally for Emmanuel Macron in his pursuit of more permanent arrangements to deepen European economic integration.

Italy, as the largest recipient, is the country in which the success of the Development Fund is judged, but it is also the ECB’s big headache, to the extent that inflationary pressures impose monetary tightening, which in turn brings again to the fore the threat of the Italian debt.