Outgoing 80-year-old President Sergio Mattarella was re-elected for a second term on Saturday, with party chiefs asking him to carry on after seven rounds of fruitless, often fraught voting in parliament to choose a successor.
With elections in the euro zone’s third largest economy little over a year away, Draghi now has to lead his bruised government through a number of difficult challenges.
He is under pressure from the parties in his broad coalition to raise borrowing to curb the impact of higher energy costs on firms and households, and the parties are at loggerheads over a contentious reform of the pension system.
Italy has also pledged to Brussels it will adopt by the end of the year around 100 measures in return for some 200 billion euros ($223 billion) of pandemic recovery funds. The success of Italy’s Recovery Plan is seen as crucial to the prospect of further EU joint borrowing in the future.
Meanwhile the coronavirus crisis shows little sign of abating, with Italy seeing hundreds of deaths every day.
Draghi had wanted the role of president himself, but his bid was opposed by two large parties in the coalition and mustered little support among rank and file lawmakers.
Financial markets are likely to welcome the continuation of the status quo as a sign of stability but the week of turmoil has left deep scars.
“Mattarella’s election belies the fact that most of Italy’s political parties are in tatters,” said Francesco Galietti, head of political risk consultancy Policy Sonar.
“We need to understand whether the key ingredient of Draghi’s government – a broad, cross-partisan majority – will still be there in a few weeks, because if not, the situation will rapidly become untenable.”
Draghi’s coalition includes the main centre-left and centre- right parties as well as the right-wing League, the once anti-establishment 5-Star movement and several smaller parties.
The presidential election saw these groups bitterly divided, with the centre-left Democratic Party (PD) largely supporting Draghi’s bid, and the League and 5-Star against it.
“Mattarella 2 – a misleading semblance of stability,” was the title of a report on Saturday by advisory group Teneo.
INTERNAL SPLITS
Precisely how the turmoil plays out for Draghi remains to be seen. Some politicians say that with the parties sidetracked by internal strife Draghi’s own role as commander of the coalition will actually be strengthened.
“I think the government comes out of all this stronger,” PD leader Enrico Letta, a strong Draghi supporter, told reporters on Saturday. “I think there will be less desire among each party to mark out its territory and dig its elbows into the others.”
This view was shared by Ettore Rosato, a leading light of the centrist Italia Viva party, who told Reuters Draghi could count on Mattarella’s ongoing support and would be pleased the ruling parties had finally all voted for the same candidate.
However, the voting also…
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