Political chaos plunges Rome into crisis - what's next?

Created: 07/15/2022Updated: 07/15/2022 15:52

Prime Minister Mario Draghi (r) wants to resign, but President Sergio Mattarella sees it differently.

© Guglielmo Mangiapane/Pool Reuters/Pool/dpa

Italy is in a serious political crisis.

The government could collapse, and the country is threatened with election campaign chaos.

There is a lot at stake, not only for Italy.

Rome - Mario Draghi has had enough: "The majority of national unity no longer exists".

A confidence vote boycotted by the Five Star Movement in the Senate was the last straw for the 74-year-old head of government.

The government crisis in Italy hit a new high on Thursday, but it could get worse.

In political Rome there was disbelief and frustration on Friday.

"What happened in these hours hurts the country," wrote ex-Prime Minister Matteo Renzi.

The government chaos could weigh heavily on the Mediterranean country with almost 60 million inhabitants economically and socially.

The populist Five Star Movement of Draghi's predecessor Giuseppe Conte did not want to support an aid package in parliament that also included the construction of a controversial waste incineration plant in Rome.

However, in doing so, they also lost confidence in the government.

Head of state Sergio Mattarella rejected Draghi's resignation.

The former head of the European Central Bank (ECB) must now look for a new majority in Parliament.

Next Wednesday he wants to report there.

The Five Star Movement's boycott of the confidence vote has plunged the Italian government into a crisis.

© Gregorio Borgia/AP/dpa

Much is at stake for Italy.

Political expert Wolfango Piccoli explains that the government still has to implement important reforms with the potential for political conflict in the second half of the year in order to secure EU billions from the Corona reconstruction fund.

In addition, the budget must be decided, which traditionally leads to disputes.

"An end to Draghi now would come at the worst possible time for Italy," says Piccoli.

Stable conditions are currently particularly important.

Brussels recently corrected the economic forecast for the third largest economy in the EU downwards and only expects growth of 0.9 percent for 2023.

Rising prices are weighing on consumers and energy concerns are plaguing the country, which is dependent on Russian gas supplies.

Draghi therefore wants to fly to Algeria on Monday.

The North African country is an important gas supplier for Italy.

Crisis is also a danger for Europe

Italy could also pose a threat to Europe.

The risk premium for ten-year Italian government bonds compared to German paper continued to rise.

"The current government crisis initially has no direct impact on Italy's stability, but business observers are alarmed because the seriousness and stability that Draghi conveys as prime minister could be lost," explains Nino Galetti, head of the CDU-affiliated Konrad Adenauer Foundation in Rome.

What's next for Italy?

The possibilities range from a continuation of a government led by Draghi to early elections.

Actually, elections would not be due until spring 2023.

However, some media see no chance for another Draghi government and therefore consider new elections to be more likely.

“Early elections are not in the best interest of senators or MPs because many of them have not yet reached the required tenure in Parliament for pension entitlements.

This is only the case from October,” explains Galetti.

Only the far-right opposition party Fratelli d'Italia, which is at the top of the polls, advocates new elections.

Role of the Lega so far unclear

Party leader Giorgia Meloni sees the possibility that Draghi could use a vote of confidence to get the approval of a parliamentary majority for a political roadmap by the end of the year.

By then, the budget must be decided.

Draghi would have a majority in Parliament even without the Five Stars.

Without them, however, he lacks a counterweight to the right-wing Lega.

Social Democrats and Italia Viva would support Draghi.

The role of Matteo Salvini's Lega, which has many seats, is unclear.

The former interior minister has not yet ruled out new elections.

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The future of the five stars is also uncertain.

The party is at a low in the polls.

Foreign Minister Luigi Di Maio recently resigned, taking dozens of supporters with him to the new Insieme per il futuro (Together for the future) party.

"Conte is in an awkward situation," says Galetti.

"When they first entered parliament almost ten years ago, the Five Stars decided that MPs could only serve for two electoral terms." Because this time is now over for many, they followed Di Maio in order to avoid this rule.

dpa