In Italy, major maneuvers over the fate of the Draghi government

The arrival of Mario Draghi to power in Rome, crowned with his reputation as the savior of the euro zone, was hailed by economic decision-makers.

The big maneuvers have begun Friday around the government led by Mario Draghi, whose resignation was refused the day before by President Sergio Mattarella, but whose fate will be decided on Wednesday in parliament.

Mr. Draghi, who wanted to resign after the non-participation of the 5 Star Movement (M5S, antisystem), member of the ruling coalition, in a vote of confidence requested by the government, was invited to appear before Parliament [ …] so that an assessment of the situation takes place, announced the presidency on Thursday evening.

Mario Draghi having to go to Algiers on Monday, this decisive session has been set Wednesday.

Mr. Draghi will give his speech in parliament on Wednesday following an unprecedented big deal on Algerian gas, which will make him something of a hero of emancipation from Russia. so that those voting against his government will be perceived as puppets of the Russians, analyzed for AFP Francesco Galietti, head of the think tank Policy Sonar.

In the meantime, each camp is preparing its weapons, an increasingly wide gap separating the parliamentary groups supporting Mario Draghi from those in favor of early elections.

The Democratic Party (PD, center left) and Matteo Renzi, former prime minister and leader of the small centrist party Italia Viva (IV), are trying by all means to convince Mr. Draghi to remain at the head of the government until the end of the elections scheduled for early 2023.

Now we have five working days left for Parliament to confirm confidence in the Draghi government and for Italy to emerge from this dramatic development, estimated the leader of the PD Enrico Letta.

The Italian Parliament will decide on Wednesday the fate of Mario Draghi's government.

An opinion shared by Francesco Bellardi, a 58-year-old architect interviewed by AFPTV in central Rome: I hope there will be a second Draghi government. In my opinion, they will find a solution so as not to put an end to the legislature.

In the background is the fear of left and centrist leaders of having to face early elections to which all the polls give the largely winning line, even if it is very divided.

The government majority parties, Forza Italia (center right) of Silvio Berlusconi and the League (extreme right) of Matteo Salvini, are tempted to go to the polls, but would find it difficult to explain to their electorate the refusal to vote confidence in the Draghi government as Italy faces inflation (+8% YoY), the new wave of COVID and the consequences of the war in Ukraine.

The Fratelli d'Italia party (FDI, far right), in opposition, pushes on the other hand in favor of early elections.

The right would start as the big favourite, but only if it remains united. However, the very fate of the Draghi government divides it, which makes a common strategy difficult.

According to a poll carried out by the Demopolis Institute and made public on Friday, 65% of Italians want the Draghi government to continue its experiment until the end of the legislature, while 27% are in favor of early elections, the rest of those interviewed do not comment.

The political crisis in Italy is worrying the country's financial market.

Several political leaders believe that a snap election would be a desirable outcome, as the government has all but lost its ability to enact further reforms and make politically difficult choices, said Lorenzo Codogno, Italy's ex-chief treasury economist and visiting professor at the London School of Economics.

And what about the 5 Star Movement, at the origin of the crisis and considered a plague by the other parties? Nothing has officially leaked on the meeting of its National Council which was held late Thursday evening, and its deputies are due to meet on Saturday.

The political crisis has reignited fears of a spike in the country's borrowing rates that could prove explosive for the eurozone. The spread, the much-watched spread between German and Italian ten-year interest rates, climbed as high as 225 points on Friday.

The arrival of Mario Draghi to power in Rome, crowned with his reputation as the savior of the euro zone, had been seen by the markets as a miracle, commented Gilles Moëc, chief economist of the Axa group. Any signal indicating that Draghi will not survive the 2023 legislative elections, or even leave power before then, is cause for concern for the markets.