Australian Economy

Italy enters crunch week with Draghi’s government on the brink

Tensions have been mounting with Mr Conte, a former prime minister who has been critical of Mr Draghi’s response to the economic crisis and has opposed the government’s stance in shipping weapons to Ukraine. The Five Star party split last month when members couldn’t agree on how much support to give Kyiv.

Mr Draghi would consider continuing as prime minister if all alliance groups, including Five Star, backed his initiatives, said one of the people, who asked not to be identified because the deliberations are private. So far in public, Mr Conte hasn’t shown any movement toward reconciliation.

Over the weekend, Mr Conte laid the blame for the impasse squarely on Mr Draghi, saying that the prime minister had offered only “generic answers” to Five Star requests for more social spending. Without concrete plans to address those issues, “we won’t be able to shoulder any government responsibility”, he said.

Snap Election

Support from other parties in government, such as Matteo Salvini’s League, may also be wavering – he’s already threatened to leave the alliance. Galvanised by the prospect of fresh elections that would benefit centre-right parties, Mr Salvini could be tempted to throw his lot in with a new coalition.

Based on current polls, a centre-right tie-up led by Giorgia Meloni’s Brothers of Italy would win if its members stick together.

If Italian President Sergio Mattarella were to call a new election, the vote would have to happen within 70 days. That may be a scenario Five Star would like to avoid, however, since its popularity has plummeted since it entered government, and it is likely to lose seats.

Bloomberg

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