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Will he stay or will he go? Mario Draghi’s Italian dilemma

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ROME – Italy’s Prime Minister Mario Draghi has tried to call the final whistle on his government, but he’s under pressure to stay on for extra time.

POLITICO explains what the current political turmoil means — for Rome and beyond.

What is happening?

Tensions that had been building for months within Draghi’s government boiled over on Thursday when the 5Star Movement, which is part of his grand coalition, boycotted a confidence vote. Draghi then immediately marched off to the presidential palace to offer his resignation.

But Italian President Sergio Mattarella provisionally rejected Draghi’s offer to quit, in the hope that a solution could be found to the arguments that would keep the government intact. Talks are ongoing between the parties and Draghi will return to parliament on Wednesday to set out his conclusions. He could resign definitively, or call a vote of confidence to seek to reaffirm the support of his coalition. 

Why does it matter?

A chorus of voices abroad and at home have appealed to Draghi to stay on, pointing out that depriving Italy of a fully functioning government would undermine progress on economic reforms and delay the passage of the 2023 budget until next year.

An early departure for Draghi could also put at risk Italy’s EU funding from the coronavirus recovery fund, at a time when the economy is under pressure and the country is facing an unprecedented energy crisis. Draghi visited Algeria on Monday to finalize a gas deal to help Italy reduce its dependence on Russian gas.

As well as destabilizing the EU’s third biggest economy, Draghi’s exit would deprive the bloc of one of its wisest and most experienced leaders at a time of unprecedented challenges from inflation and war.

Lia Quartapelle, a lawmaker and foreign affairs spokesperson for the center-left Democratic Party, told POLITICO that Europe was looking on “with alarm and dumbfounded as to why Italy is giving up someone of Draghi’s quality.”

Will he change his mind?

Draghi’s dilemma is that he does not see the point of being in a government that is no longer effective. He is not convinced that the government can be effective as the coalition partners seek to assert their identities. “The agreement of trust underlying the government’s action has been broken,” he told the Cabinet last week.

Italian President Sergio Mattarella provisionally rejected Draghi’s offer to quit | Ettore Ferrari/EPA-EFE

Many in Italy hope he will change his mind. More than a thousand mayors signed an open letter to Draghi over the weekend asking him to stay. Beppe Sala, mayor of Milan, said ordinary citizens did not understand the reasons for the crisis and that Italy risks humiliating itself in front of the whole world. He wrote on Facebook: “Is there really an Italian who thinks he is good enough and can adequately substitute Draghi in national and international affairs? Please.”

Former Prime Minister Matteo Renzi, leader of the centrist Italia Viva party, started a petition to ask Draghi to stay, which on Monday had gathered 90,000 signatures. “We have to try and believe until the end … It won’t be easy but it is in Draghi’s hands,” Renzi said on Twitter.

What if the government collapses?

The immediate risk is that Italy won’t pass the budget law to help the poorest with the cost of living crisis and finalize reforms needed to unlock EU pandemic funds. “I don’t see how this can be done with parliament dissolved and an election campaign underway,” Quartapelle said.

There are also broader European risks in holding an election now, she said: Right-wing parties are expected to win as a coalition if a ballot is called. “Italy should be a country leading EU integration, but instead with a right-wing Euroskeptic government in power, it could become one of the obstacles,” Quartapelle said.

Italy’s allies abroad, such as European Commission President Ursula von der Leyen and French President Emmanuel Macron, have emphasized Draghi’s crucial role in stabilizing Europe and helping to ensure Western solidarity in supporting Ukraine against Russia. 

Iryna Vereshchuk, deputy prime minister of Ukraine, called Draghi a non-partisan leader with a big heart: “With Draghi in the government, we will win the war.”

Francesco Clementi, professor in the politics department at Perugia University, said: “The fall of Draghi affects Italy and the entire international community. There will be a lot of pressure for the government and it’s hard to say ‘no’ under all that pressure from the international democratic community. We can’t afford another Boris Johnson.”

Does anyone want him to quit?

Despite support internationally and at home, Draghi’s project still faces huge obstacles within his own coalition.

He formed a grand coalition 17 months ago and after repeated compromises, some of the political parties involved are looking for a chance to reassert their differences ahead of elections next year. Essentially, they are in campaign mode, which makes compromise harder than ever.

The 5Star Movement is deeply divided over whether to reaffirm support for Draghi or withdraw their ministers from the government. Part of the movement split away a month ago over the question of sending arms to Ukraine. There is a risk that a further faction could break away if the leadership decides to quit the government.

On Thursday, the 5Star Movement, which is part of Draghi’s grand coalition, boycotted a confidence vote | Angelo Carconi/EPA-EFE

The center-right Forza Italia and far-right League parties said on Sunday that they would not continue to govern with the “unreliable, incompetent” 5Stars. They welcomed the prospect of a new election.

What happens next?

After Draghi addresses the senate on Wednesday, he could then go directly to see the president and confirm his resignation.

Or, if it is clear that Draghi still has the support of his entire coalition, he could change his mind and decide to stay on to manage the energy and cost of living crisis and pass the budget law until elections next year. He could also, in theory, stay on if he has an alternative majority, although this is less likely as Draghi’s mandate was for a government of national unity.

Even if he does remain in office, Draghi’s difficulties may only just be beginning. There is a risk of ongoing power struggles as coalition partners seek to assert their identities in the run-up to inevitable elections, currently scheduled for 2023. He could struggle to push through the major reforms he has promised. 

If Draghi does resign, the president could hold consultations with political parties to see if an alternative majority could be found.

Are elections on the cards?

Given that there have already been three executives during this legislative mandate, Mattarella would be more likely to dissolve parliament and call an election than try to find an alternative administration. This ballot would likely take place at the beginning of October.

The whole process will take time, and that’s not something Italy can easily afford. After elections are held, the president must then hold consultations with parties to form a new government. It can take months to stitch together administrations in Italy’s mainly proportional representation system. The last government was not formed for more than 100 days.

In the meantime, Draghi’s government would stay on in a caretaker role but with vastly reduced powers. It would probably not be able to authorize measures to mitigate the effects of the invasion of Ukraine, such as new aid for the energy crisis or supplying more weapons to Kyiv.

A caretaker administration would also struggle to finalize EU-mandated reforms such as for competition and justice. The new government would be unlikely to take power before November and would have little time to prepare and pass the budget.

Whether Draghi stays or goes this week, it may be many months before Italian politics delivers an effective government again.

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