ANALYSIS: Three ways Italy’s latest political crisis could unfold

Speculation that Italy's government could collapse mounted this week as tension between its populist leaders reached an all-time high and Deputy Prime Minister Matteo Salvini demanded snap elections.

ANALYSIS: Three ways Italy's latest political crisis could unfold
(L-R) Five Star Movement leader Luigi Di Maio, Prime Minister Giuseppe Conte and League leader Matteo Salvini.Photo: Andreas Solaro/AFP

The Italian “spread”, or the difference in the yield on Italian and German sovereign bonds, widened on Thursday in a sign of mounting investor concern over Italy's financial stability.

Government crisis: is Italy heading for early elections?

But is an early election really likely? Here are three broad scenarios outlining what could be next for Italy's government.

1. Resignations and a reshuffle

The opposition has also called on the government to resign, arguing it no longer has a workable majority in parliament after Salvini's fellow Deputy Prime Minister Luigi di Maio voted against the Lyon-Turin TAV rail project.

Italian media reported that Salvini, in talks with Prime Minister Giuseppe Conte, set conditions for staying in the coalition — including the resignation of the transport, defence and economy ministers, who have resisted his party's projects and policies.

A gentler reshuffle is seen as possible, however, since Salvini has refrained from publicly attacking Di Maio of the anti-establishment Five Star Movement over his opposition to the rail project, which involves the construction of an 8.6-billion-euro tunnel through the Alps.

2. Early election

If the government collapses and opposition parties can come up with no workable alternative, a snap election could be called for October to reconstitute parliament.

This is the option being pushed for by Salvini, whose League party would win a majority, opinion polls indicate.

Analysys say the League could then govern in alliance with another, smaller far-right party, Fratelli d'Italia.

3. Technical patch

President Sergio Mattarella, wh has the sole power to dissolve parliament, has insisted there must be a government in place to finalise the country's budget, a first draft of which has be submitted to EU authorities by the end of September.

To that end, the president could name a government of technocrats and push the elections back to February or March.

The government is struggling to rein in its public deficit and its mammoth debt mountain of more than 2.3 trillion euros.

READ ALSO: Matteo Salvini, Italy's rebranded nationalist sharing power with former enemy

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Berlusconi to run for Senate in Italy’s elections

Scandal-plagued former premier Silvio Berlusconi said he plans to return to Italy's parliament in upcoming elections, almost a decade after being forced out over a conviction for tax fraud.

Berlusconi to run for Senate in Italy's elections

“I think that, in the end, I will be present myself as a candidate for the Senate, so that all these people who asked me will finally be happy,” the 85-year-old billionaire and media mogul told Rai radio on Wednesday.

After helping bring down Prime Minister Mario Draghi last month by withdrawing its support, Berlusconi’s centre-right Forza Italia party looks set to return to power in elections on September 25th.

It is part of a right-wing coalition led by Giorgia Meloni’s post-fascist Brothers of Italy, which includes Matteo Salvini’s anti-immigration League.

Berlusconi brushed off reports he is worried about the possibility of Meloni – whose motto is “God, country and family” – becoming prime minister.

Noting the agreement between the parties that whoever wins the most votes chooses the prime minister, he said: “If it is Giorgia, I am sure she will prove capable of the difficult task.”

READ ALSO: Italy’s hard right set for election victory after left-wing alliance collapses

But he urged voters to back his party as the moderate voice in the coalition, emphasising its European, Atlanticist stance.

“Every extra vote in Forza Italia will strengthen the moderate, centrist profile of the coalition,” he said in a separate interview published Wednesday in the Il Giornale newspaper.

League party leader Matteo Salvini (L), Fratelli d’Italia leader Giorgia Meloni and Forza Italia leader Silvio Berlusconi pictured in October 2021. The trio look set to take power following snap elections in September. Photo by CLAUDIO PERI / ANSA / AFP

Berlusconi was Italy’s prime minister three times in the 1990s and 2000s, but has dominated public life for far longer as head of a vast media and sports empire.

The Senate expelled him in November 2013 following his conviction for tax fraud, and he was banned from taking part in a general election for six years.

He was elected to the European Parliament in 2019, however, and threw his hat in the ring earlier this year to become Italy’s president — although his candidacy was predictably short-lived.

Berlusconi remains a hugely controversial figure  in Italy and embroiled in the many legal wrangles that have characterised his long career.

He remains on trial for allegedly paying guests to lie about his notorious “bunga-bunga” sex parties while prime minister.

Berlusconi has also suffered a string of health issues, some related to his hospitalisation for coronavirus in September 2020, after which he said he had almost died.