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Mario Draghi for PM? Italy’s president intervenes after government crisis talks fail

Italy's president is expected on Wednesday to ask former head of the European Central Bank Mario Draghi to take over as prime minister following the collapse of the government.

Mario Draghi for PM? Italy's president intervenes after government crisis talks fail
Italian President Sergio Mattarella addresses the media on Tuesday evening at the presidential palace. Photo: Filippo Monteforte/POOL/AFP

President Sergio Mattarella's spokesman said he had asked Draghi, the former head of the European Central Bank, to meet with him for talks on Wednesday, after ruling parties failed to agree on a new government.

READ ALSO: Why do Italy's governments collapse so often?

The announcement came after Italy's ruling parties missed a deadline to reach an agreement on Tuesday, meaning talks on potentially forming a new government had failed.

“At present, there remain differences, in light of which I have not recorded a unanimous willingness to give life to a majority,” said House Speaker Roberto Fico, after meeting with President Sergio Mattarella.

Italy is currently without a prime minister amid a political crisis which has deepened since Conte resigned last week.

Mattarella had given the ruling coalition parties until Tuesday to patch things up with former premier Matteo Renzi's Italia Viva party, which sparked the crisis by withdrawing support.

But talks failed, and the president said he was left with only two viable options.
 
He ruled out snap elections because of the pandemic, and instead said he would help form a “high-profile government that should not identify itself with any political formula”.
 
Mattarella has stressed the urgency of creating a stable government to manage the pandemic, which hit Italy first among European nations and has been devastating.
 
Alongside the ever-mounting death toll, the economy shrank 8.9 percent in 2020 – the biggest contraction since the end of World War II.
 
 
Italy's La Stampa newspaper also reported on Sunday that Mattarella was considering Draghi for the prime ministerial role.

However, Mattarella's office promptly denied this, saying there had been no contact between them.

So far, there has been no comment from Draghi, who hasn't been seen much in the public eye since 2019.

PROFILE: Italian president Sergio Mattarella, the country's 'political referee'

Conte had drawn up a 220-billion-euro ($240 billion) recovery plan using the EU funds, but Renzi accused him of using it for vote-winning handouts, rather than addressing long-term structural issues.

The lack of political leadership in recent weeks had sparked concerns about whether Rome could meet the April deadline to submit its spending plans to Brussels.
 
But Draghi, dubbed “Super Mario”, has long been cited by political watchers as the man to see Italy through the coming months.
 
“Thank you president!” tweeted the EU's economy commissioner, former Italian prime minister Paolo Gentiloni, after Mattarella announced his plans.
 
Lorenzo Castellani, a political expert at Rome's Luiss University, said he believed a Draghi-led government would be highly technocratic.
 
“The government programme will be 99 percent occupied by the pandemic and the recovery fund,” he told AFP, adding that it would likely find support among lawmakers.

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COST OF LIVING

Fuel tax cut and help with energy bills: Italy approves inflation aid package

Italy on Thursday night approved new measures worth around 17 billion euros ($17.4 billion) to help families and businesses manage the surging cost of fuel and essentials.

Fuel tax cut and help with energy bills: Italy approves inflation aid package

As expected, the final version of the ‘aiuti-bis‘ decree provides another extension to the existing 30-cents-per-litre cut to fuel duty, more help with energy bills, and a tax cut for workers earning under 35,000 euros a year.

The package also includes further funding for mental health treatment: there’s another 15 million euros for the recently-introduced ‘psychologist bonus’ on top of the 10 million previously allocated.

READ ALSO: What is Italy doing to cut the rising cost of living?

There are also measures to help agricultural firms deal with this year’s severe drought.

Italian Prime Minister Mario Draghi described the new package as an intervention “of incredible proportions”, which corresponds to “a little over 2 points of national GDP”.

However, he said, no changes were made to the national budget to pave the way for the new measures.

The measures will be funded with 14.3 billion euros in higher-than-expected tax revenues this year, and the deployment of funds that have not yet been spent, Economy and Finance Minister Daniele Franco said.

Italy has already budgeted some 35 billion euros since January to soften the impact of rising fuel costs.

The decree is one of the last major acts by outgoing Prime Minister Mario Draghi before an early general election next month.

Elections are set for September 25th but the former European Central Bank chief is staying on in a caretaker role until a new government is formed.

Draghi said the Italian economy was performing better than expected, citing the International Monetary Fund’s estimate of three percent for 2022.

“They say that in 2022, we will grow more than Germany, than France, than the average of the eurozone, more than the United States,” he told a press conference.

But he noted the many problems facing Italy, “from the high cost of living, to inflation, the rise in energy prices and other materials, to supply difficulties, widespread insecurity and, of course political insecurity”.

Inflation hit 8 percent in Italy in June – the most severe spike the country has experienced since 1976.

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