Will Mario Draghi be able to form a new Italian government?

Italian economist Mario Draghi has accepted the challenge of forming a new government - but will he have enough support to become the next PM?

Will Mario Draghi be able to form a new Italian government?
A Corazziere, of the Italian military Presidential honour guard, at the Quirinale Palace on Wednesday. Photo: AFP

Draghi began detailed talks Thursday on the formation of a new government, the day after being called in by President Sergio Mattarella amid a political and economic crisis.

Draghi, the former president of the European Central Bank (ECB,) opened discussions with party leaders in Rome on whether they would support a 'national unity' administration.

President Mattarella asked Draghi to take over and form a government after Giuseppe Conte resigned and talks between ruling parties on forming a new government between themselves ended in failure.

Draghi will not be formally nominated as prime minister until he can secure a majority in parliament – and until then, Conte's government remains in a caretaker position.

EXPLAINED: How are Italy's prime ministers chosen?

He said the eurozone's third largest economy needs “a political government that is solid and sufficiently united” to tackle the challenges ahead.

In his first public remarks since being replaced, outgoing prime minister Giuseppe Conte wished Draghi well, adding: “I'll keep working for the good of the country.”

It's still unclear however whether Draghi can gather the support he needs from Italy's political parties.

The economist's task is urgent. Italy remains in the grip of the deadly coronavirus pandemic, and Rome must also finalise a plan within weeks to boost its recession-stricken economy with the help of the European Union's recovery fund.

PROFILE: Could 'Super Mario' Draghi lead Italy out of its crisis?

He has support from some of the main parties in parliament, but the biggest – the populist Five Star Movement (M5S) – is not yet on board.

“Despite his stature, it is not at all clear if he can win backing from a fragmented parliament that has seen two governments collapse since 2018,” commented Federico Santi, senior analyst at the Eurasia group.

Mario Draghi  gives a press conference after at the Quirinal palace in Rome on Wenesday. Photo: AFP

Draghi held talks on Thursday with some of the smaller parties, and will continue discussions on Friday and Saturday.

Two of the three parties in the current gverning coalition have so far indicated they will back him.

The Democratic Party (PD) and Matteo Renzi's Italia Viva are likely to support Draghi.

Silvio Berlusconi's conservative Forza Italia said they would enter negotiations with a “very positive attitude”.

But Draghi also needs the abstention or the support of one of three other parties: the M5S, Matteo Salvini's far-right League and the Brothers of Italy, also far right.

Even if it has lost most of its radical edge, the M5S started out as an anti-elitist, Eurosceptic party, so it is ideologically awkward for them to endorse an establishment figure like Draghi.

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

One of the M5S leaders, outgoing Foreign Minister Luigi Di Maio, echoed Conte's call for a “political government”, rejecting the idea of a cabinet made up of technocrats.

Draghi could get around that by offering some cabinet posts to the M5S and other parties, but it remained unclear whether this would be enough.

There is speculation that the PD's Roberto Gualtieri could survive as economy minister, a key post as Italy draws up plans to dig itself out of the worst recession since World War II.

Italy is banking on receiving the lion's share of a European Union recovery fund –around 200 billion euros ($240 billion) – but must submit a credible spending plan to Brussels by April.

The Milan stock market was higher for a second day on Thursday, closing 1.65 percent up, which analysts attributed to confidence in Draghi.

“We know he'll do 'whatever it takes' to steer Italy out of its worst economic and health crisis since the war,” said analyst Neil Wilson.

Should Draghi fail to secure a majority, the fallback option would be snap elections, which a right-wing bloc led by Salvini would be favourite to win.

Mattarella said on Tuesday he wants to avoid early elections, given the complexity and risk of holding them in the middle of a pandemic.

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Will Italy’s Five Star Movement split throw the government into crisis?

After the largest party in Italy's coalition government imploded over the country's response to the Ukraine war, Prime Minister Mario Draghi on Wednesday called for unity. Is another political crisis on the horizon?

Will Italy's Five Star Movement split throw the government into crisis?

Draghi has taken a firm, pro-EU line on Russia’s invasion of Ukraine: sending weapons to Kyiv, backing sanctions on Moscow despite Italy’s heavy reliance on Russian gas, and supporting Ukraine’s hopes of joining the European Union.

But there have been rumblings of unease within his coalition government, which burst into the open on Tuesday with a split in parliament’s biggest party, the Five Star Movement.

Foreign Minister Luigi Di Maio announced he was leaving the party amid disagreements over how Italy should respond to the Ukraine war.

An estimated 60 lawmakers are following him into his breakaway group, named “Together for the Future” – just over a quarter of Five Star’s MPs.

READ ALSO: Italian government rocked by Five Star party split

The move risks upsetting the fragile balance of power in Draghi’s coalition government, a year before general elections are due and at a difficult time for Italians battling skyrocketing inflation.

A vote on Wednesday suggested parliament still overwhelmingly backs the premier, with the lower Chamber of Deputies approving by 410 to 29 a resolution supporting the Ukraine policy.

The Senate similarly approved it on Tuesday.

Luigi Di Maio (R) applauds after Prime Minister Mario Draghi (L) addresses the Italian Senate on June 21st, 2022. Photo by Filippo MONTEFORTE / AFP

“Unity is essential in these moments because the decisions that must be taken are very difficult,” Draghi said before Wednesday’s result, which came one day before an EU summit in Brussels begins.

In an uncharacteristically combative address to deputies, Draghi accused those who disagreed with his policy of effectively calling on Kyiv to surrender.

“There is a fundamental difference between two points of view. One is mine – Ukraine must defend itself, and sanctions and the sending of weapons serve this goal,” Draghi said to applause.

“The other point of view is different. Ukraine must not defend itself, we shouldn’t do sanctions, we shouldn’t send armaments, Russia is too strong, why should we take her on, let Ukraine submit.”

Di Maio had made a similar attack on members of his own party at the weekend, paving the way for Tuesday’s defection.

Five Star leader Giuseppe Conte, the country’s former premier, has argued that Italy should focus on a diplomatic solution, warning against getting involved in an escalating arms race.

Conte and Di Maio have been at odds since long before the war, however.

Five Star leader Giuseppe Conte stressed that his party still backed the coalition, saying: “Support for Draghi is not up for discussion.”

Nevertheless, some commentators believe Draghi’s coalition government – involving all main political parties except the far-right Brothers of Italy – will start to splinter ahead of 2023 elections.

The Five Star split is likely to weigh on “the entire political system, starting with Draghi, who is now more shaky than before,” wrote La Stampa columnist Marcello Sorgi.

The defections in Five Star leave the anti-immigration League of Matteo Salvini as the biggest party in parliament, but it too is struggling with waning public support.

Media reports this week suggest this could work in Giorgia Meloni’s favour in the next election – the far-right Brothers of Italy leader is now being touted as potentially becoming the country’s first female prime minister, as her party remains the only one in opposition to Draghi’s coalition.