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POLITICS

Giuseppe Conte is the nominee for Italy’s new prime minister

Italy's president will hold consultations on Tuesday after anti-establishment and far-right party leaders proposed little-known lawyer Giuseppe Conte as prime minister of a nascent populist coalition government.

Giuseppe Conte is the nominee for Italy's new prime minister
Luigi Di Maio leaves the presidential palace on Monday. Photo: Andreas Solaro/AFP

President Sergio Mattarella received the speaker of the lower house Roberto Fico and the head of the upper house, the Senate, Elisabetta Alberti Casellati at 11.00 am.

Conte, 54, was proposed to Mattarella during talks held at the head of state's offices with Five Star Movement leader Luigi Di Maio and nationalist League chief Matteo Salvini.

“We have indicated the name of Giuseppe Conte to the President of the Republic,” Luigi Di Maio wrote on the official blog of Five Star (M5S), after meeting the president in Rome on Monday evening.

“I'm very proud of this name because he is the Five Star Movement in a nutshell – he won't burden the Italian public.”

Salvini later confirmed that Conte was also the League's pick for prime minister in a live video on Facebook to his more than two million followers.

“Conte is an expert in simplification, cutting of red tape and streamlining of the administrative machine, which is what many businesses ask of us,” Salvini said.

READ ALSO: Who is Giuseppe Conte, the political novice picked to become Italy's populist PM?


Giuseppe Conte (R) shakes hands with Five Star leader Luigi Di Maio. Photo: Filippo Monteforte/AFP

Unknown

A specialist in administrative law, Conte was presented before March's inconclusive general election as Di Maio's ministerial pick to streamline Italy's notorious bureaucracy.

Both Di Maio and Salvini had previously railed against the possibility of a technical government being put in place after doubts were raised over whether a coalition could be formed. But the two leaders brushed off journalists' questions when asked why a relative unknown had been chosen as prime minister nominee.

“He was in my team. Eleven million Italians voted for him,” Di Maio said as he left the presidential Quirinal palace, while Salvini said “all prime ministers are political”.

Mattarella did not reveal on Monday whether he agrees with the two parties' pick. The president's endorsement is crucial if they are to seek approval for a new government in parliament.

Should Conte receive Mattarella's blessing, he will then have to present the president with a team of ministers.

“We have clear ideas on the ministers,” Salvini said.

Market worry

In the meantime the president will also examine the two parties' joint programme, overwhelmingly approved by party members over the weekend in a public non-binding vote.

The 58-page “Contract for the Government of Change” does not mention a unilateral exit from the eurozone, unlike previous versions leaked to the media, but it rejects post-financial crisis austerity policies and features hardline immigration and security proposals.

The document's costly financial measures and eurosceptic tone has worried financial markets, as has Conte's nomination as PM. The Milan stock exchange closed down 1.52 percent. The spread – the difference between Italian and German 10-year borrowing rates – has shot up 55 base points to 186 in less than a week.

However, according to a poll published Sunday in La Repubblica, 60 percent of Italians say they support a League-M5S government.

Little is known about Conte beyond his complete lack of political experience and solid career in law and academia. He is Di Maio's personal lawyer.

His first, and so far only encounter with the Italian public, was at a pre-election presentation of the Five Star's government team in which he spoke at length about radical overhauls to the legal system and cancelling more than 400 laws.

Conte will also likely have Di Maio and Salvini in his government team, with the Five Star leader reportedly keen on the Economic Development Ministry and the League chief gunning for Interior Minister. 

READ ALSO: Five questions and answers about what the new government could mean for Italy

For members

ENERGY

What does the shut-off of Russian gas supplies mean for Italy?

After Russian energy giant Gazprom suspended gas deliveries to Italy on Saturday, many are wondering what consequences the stoppage will have on the country’s energy supplies.

What does the shut-off of Russian gas supplies mean for Italy?

What’s going on?

Over the past three days, Italy has received none of the gas supplies it expected from Russian energy giant Gazprom. 

The impasse officially started last Saturday, when Gazprom announced it would not be able to deliver gas to Italy due to “the impossibility of gas transport through Austria” – Russian gas supplies are delivered to Italy through the Trans Austria Gas pipeline (TAG), which reaches into Italian territory near Tarvisio, Friuli Venezia-Giulia. 

READ ALSO: Russia suspends gas to Italy after ‘problem’ in Austria

Though Gazprom originally attributed the problem to Austrian gas grid operators refusing to confirm “transport nominations”, Austria’s energy regulator E-Control said that the Russian energy mammoth had failed to comply with new contractual agreements whose introduction had been “known to all market actors for months”. 

Additional information about the incident only emerged on Monday, when Claudio Descalzi, the CEO of Italy’s national energy provider ENI, said that supplies had been suspended after Gazprom failed to pay a 20-million-euro guarantee to Austrian gas carrier Gas Connect. 

Descalzi also added that ENI was ready to step in and deposit the guarantee itself in order to unblock deliveries to Italy.

Logo of Italian energy regulator ENI.

Italian energy regulator ENI said it was ready to pay Austrian gas carriers a 20-million-euro guarantee to unblock deliveries. Photo by Marco BERTORELLO / AFP

READ ALSO: Italy’s ENI ready to pay guarantee to unblock Russian gas

At the time of writing, however, no agreement between ENI, Gas Connect and Gazprom has yet been reached, with the stoppage expected to continue until Wednesday at the very least.

What would an indefinite stoppage mean for Italy’s upcoming winter season?

Though energy giant ENI appears to be confident that a compromise between all the involved parties will be reached shortly, the “indefinite shutdown” of the Nord Stream 1 pipeline in early September is somewhat of a menacing precedent. 

After fears of a long-term supply suspension cropped up over the weekend, outgoing Ecological Transition Minister Roberto Cingolani publicly reassured Italians that “barring any catastrophic events, Italy will have the whole of winter covered”.

It isn’t yet clear what exactly Cingolani meant by “catastrophic”, but the latest available data seem to suggest that Italy wouldn’t have to resort to emergency measures, chiefly gas rationing, should Gazprom halt deliveries indefinitely. 

Italian Minister for Ecological Transition Roberto Cingolani.

Outgoing Minister for Ecological Transition Roberto Cingolani said that, “barring any catastrophic events”, Italy will have enough gas supplies for the winter. Photo by Andreas SOLARO / AFP

In 2021, prior to Russia’s invasion of Ukraine, Italy received around 20 billion cubic metres of Russian gas per year, which accounted for about 40 percent of the country’s annual gas imports. 

But, thanks to the supply diversification strategy carried out by outgoing PM Mario Draghi and his cabinet over the past few months, Russian gas currently accounts for, in the words of ENI’s CEO Claudio Descalzi, only “about nine to 10 percent” of Italian gas imports.

READ ALSO: Italy’s Draghi criticises Germany over latest energy plan

Granted, Italy still receives (or, given the current diplomatic deadlock, expects to receive) a non-negligible total of 20 million cubic metres of Russian gas per day. But, should supply lines between Rome and Moscow be shut off until further notice, Italy could fall back on existing gas stocks to meet winter consumption demands. 

Last Wednesday, Cingolani announced that the country had already filled up 90 percent of its national gas stocks – Italy has nine storage plants for an overall storage capacity of 17 billion cubic metres of gas – and the government was now working to bring that number up by an additional two or three percentage points.

These supplies, Cingolani said, are set to give Italy “greater flexibility” with respect to potential “spikes in winter consumption”.

Gas storage station in Loenhout, Belgium.

Italy has nine storage plants for an overall storage capacity of 17 billion cubic metres of gas. Photo by Kenzo TRIBOUILLARD / AFP

Finally, Italy is expected to receive an additional four billion cubic metres of gas from North Europe over the winter months – deliveries which will be complemented by the first shipments of LNG (Liquefied Natural Gas) from Egypt.

Both of these developments are expected to further reinforce Italy’s position in the energy market for the cold season.

What about the long-term consequences of an indefinite stoppage?

An indefinite shut-off of Russian gas supplies would effectively anticipate Italy’s independence from Moscow by nearly two years – Draghi’s plan has always been to wean the country off Russian gas by autumn 2024.

However, the Italian government’s strategy is (or, perhaps, was, as a new government is about to be formed) centred around a gradual phasing out of Russian supplies. As such, although not immediately problematic, a ‘cold-turkey’ scenario might create supply issues for Italy at some point during 2023.

READ ALSO: EXPLAINED: How much are energy prices rising in Italy this autumn?

Granted, Algeria, whose supplies currently make up 36 percent of Italy’s national demand, is expected to ramp up gas exports and provide Rome with nine billion cubic metres of gas in 2023.

But, even when combined with LNG supplies from several African partners – these should add up to a total of four billion cubic metres of gas in 2023 – there’s a risk that Algerian gas might not be able to replace Russian gas on its own.

An employee works at the Tunisian Sergaz company, that controls the Tunisian segment of the Trans-Mediterranean (Transmed) pipeline, through which natural gas flows from Algeria to Italy.

Algerian gas supplies, which reach Italy through the Trans-Med pipeline (pictured above), might not be enough to replace Russian gas in 2023. Photo by Fethi BELAID / AFP

Therefore, should an indefinite shut-off be the ultimate outcome of the current diplomatic incident between ENI, Austria’s Gas Connect and Russia’s Gazprom, Italy, this time in the person of new PM Giorgia Meloni, might have to close deals with other suppliers or ask existing suppliers to ramp up production. 

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