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Italy’s ‘Super Mario’ Draghi wins confidence vote for new government

Italian Prime Minister Mario Draghi on Thursday night secured final parliamentary approval for his government, meaning he can now focus on dealing with the country's unprecedented health and economic crisis.

Italy's 'Super Mario' Draghi wins confidence vote for new government
The Italian parliament's Lower House ahead of the vote of confidence on February 18th. Photo: AFP

The lower house, the Chamber of Deputies, overwhemingly backed the former European Central Bank (ECB) chief and his cabinet team of technocrats and politicians, with 535 votes in favour, 56 against and five abstentions.

READ ALSO: How will Italy's Covid-19 strategy change under the new government?

Given that nearly all parties have lined up behind the new executive, the near-unanimous result was not a surprise.

On Wednesday, Draghi easily won a first vote of confidence in the Senate, the upper chamber, by a 262-40 margin, with two abstentions.

Italy's new leader is taking over at a particularly difficult time, as the coronavirus pandemic has killed almost 100,000 people and sent the eurozone's third-largest economy plunging by a record 8.9 percent last year.

“There has never been in my long professional life a moment of such intense emotion and so much responsibility,” the 73-year-old economist said in his
inaugural speech at the Senate.

He pledged to use “all means” to fight the pandemic, starting with a faster vaccination programme. He also sketched out an ambitious reform plan, in line
with European Union expectations.

READ ALSO: Seven key quotes from the new Italian PM's first speech

Draghi, who has extensive contacts in the EU and the United States, was set to make his international debut as prime minister on Friday, taking part in a virtual summit of G7 nations.

The EU is set to help Italy's recovery with more than 200 billion euros ($240 billion) in loans and grants during 2021-2026.

Draghi has promised to reform Italy's stifling bureaucracy, labyrinthine tax code and snail-paced justice system, as well as focus on education, closing the gender gap on employment and fighting climate change.

Photo: AFP

The ex-ECB chief was unexpectedly called in to solve Italy's political crisis two weeks ago, after the collapse of Giuseppe Conte's previous centre-left government.

The man known as “Super Mario” for helping save the euro while at the ECB has since won surprisingly wide political backing, including from the far-right, eurosceptic League of Matteo Salvini.

“Me and the League have complete confidence in your government,” Salvini said in the Senate debate, after Draghi warned that supporting him also meant signing up to a more integrated EU and the idea that the euro single currency is irreversible.

According to Wolfango Piccoli, co-president of the Teneo consultancy, Draghi will need “delicate negotiations to persuade his political backers” to implement his agenda.

Parties have “traditionally pursued policies radically opposed (to Draghi's ideas) on multiple fronts, including the role of the state in the economy, corporate interventionism and taxation”, he said.

So, his “first 100 days in office should provide a good sense of what is achievable or not, especially concerning reforms that have been sidelined for decades”, Piccoli concluded.

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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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