The government crisis crystalized yesterday, when the 5SM, the League and Forza Italia decided not to take part in a confidence vote which followed Mario Draghi’s address to the Senate. After the collapse of the national unity government, we expect President Mattarella to dissolve parliament and call a snap election in early October.

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Italian Prime Minister Mario Draghi addressed the Senate yesterday in a bid to avert a government crisis after the 5SM party refused to participate in a confidence vote on a cost of living aid package worth €26 billion. Draghi resigned last week, affirming that the political conditions needed to effectively meet the targets set by his government were no longer in place. But President Mattarella turned down the resignation, calling for a parliamentary debate to be held on 20 July.

Yesterday, Draghi reiterated his pro-Atlantic and pro-European stance and described what had yet to be done in the government agenda. He said that in order to complete his task, a new coalition agreement should be built from scratch to restore the necessary level of cohesion between the parties supporting the government. In doing so, he left little room for ambiguity, setting his own conditions, touching upon themes such as the revision of the citizenship income (a stronghold for the 5SM) and opening up to competition taxi licenses and seaside concessions (strongly opposed by the League).  

His address was received badly not only by the 5SM, but also by the League and, more surprisingly, by Forza Italia. They all decided not to take part in the confidence vote, which was eventually passed, mainly due to abstentions. The parliamentary debate should have resumed today at the House of Deputies, but it seems very likely that at the start of the session (scheduled at 9am) Draghi will announce he will leave to hand President Mattarella his irrevocable resignation.

What will happen next?

Given the poor relations among former coalition partners, there seems to be no room left for another attempt to form a national unity/technocrat government. President Mattarella will then have little alternative but to dissolve parliament and call snap elections, which could be held between late September and early October. As PM Draghi was not voted down in parliament, he will likely be called to run the government for ordinary affairs until the elections.

Looking at the political scene in the very short run, the parties which decided to pull the plug will have a hard time explaining to their electorate why such a decision was made at such a difficult economic and geopolitical moment, and this might be particularly difficult with center-right moderates in richer northern regions. This might be reflected in volatile opinion polls, which, at least in the short term, should be taken with a pinch of salt.

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