Italy government

Italian government faces big hurdles after botched presidential election

After a week of wrangling in Rome, the good news is that the president’s choice has done more than anyone to guarantee the stability and rationality of Italian politics over the past seven years. Sergio Mattarella’s continued presence at the Quirinal Palace offers the best assurance that the same conditions will prevail for another seven years. This continuity also seems to guarantee that Mario Draghi’s position as Prime Minister will not be called into question, at least until the next legislative elections, scheduled for June 2023.

Unfortunately, the good news ends here. It is hard to overestimate the political scars, the loss of credibility of the electoral system and the atmosphere of contention and recrimination left by the feuds of the past week. Italy’s bipartisan system, inaugurated by Mattarella in 1993, is in ruins.

The twisted maneuvers of the political parties that led to this result are the worst in the history of Italian politics – which is saying a lot. The presidential elections require, after three first ballots, a majority in the Chamber of Deputies and the Senate of the Republic combined (951 votes in total), plus 58 regional representatives. No coalition of parties obtained such a majority: neither the center left (426) nor the center right (414) obtained the required 505 votes. The other 111 unaffiliated and regional members are largely uncontrollable and unpredictable.

Arithmetic and common sense would have required party leaders to lock themselves in a room, cut off all communication with the press, find a name with bipartisan support, return to the room and vote for that name. This does not happen.

Party leaders – in particular self-proclaimed centre-right League leader Matteo Salvini – spent the week publicly throwing names into the mix that were quickly dismissed by others. Meanwhile, delegates in the room submitted blank ballots or unlikely names, including comedians and musicians. Respected politicians, including Draghi, ended up sharing this business in the media meat grinder.

Unable to find a solution, the leaders ended up scaling the Quirinal, where Mattarella was monitoring the move of his belongings to an apartment he had previously rented, to beg him to accept another term. He accepted, despite what he called “other personal projects”.

What happens next? Urgent matters require government attention. The economic and social conditions of the country as it emerges from the pandemic require a firm hand. The question is: even with heavyweights like Mattarella and Draghi, can these challenges be met when the very parties that have given such a dismal performance provide essential support to the government?

First, the recession of the pandemic may be in sight, but careful management is still needed. The phasing out of emergency measures needs to be planned and implemented, and not just in the health sector. Economic measures (guarantees, subsidies) must be carefully lifted, resisting pressures for continued support from lobbies and economic sectors.

Second, the government is committed, internally and in Europe, to overhauling the public budget, reducing taxes, eliminating waste and increasing productive investment. All this must coexist with a credible plan to reduce the public debt. Budget plans for 2022 and beyond must be completed and presented in Europe by April.

Third, testing procedures need to be revised to be more efficient and quicker. This is a key reform in a country that has by far the longest trial period in the European Union. Parliament authorized the government to act by decree, but parties still have plenty of room to backtrack or water down the reform.

Fourth, around 100 conditions of the EU National Recovery and Resilience Plan must be met in 2022 to qualify for funding. These conditions are not for the simpler planning phase of last year, but for the more difficult implementation. Blocking or delaying the flow of EU funds is a concrete risk.

Finally, the pre-existing and unsustainable pension law, which allowed retirement at 62, was repealed by Draghi and replaced by a transitional regime (64) which will expire at the end of the year. New permanent provisions must now be introduced linking retirement to life expectancy, with penalties for early retirement to ensure financial sustainability.

Each item on this incomplete list would represent a daunting task for any government in a pre-election year. Their combination is formidable. Draghi can count on the support of the highest authority on the highest hill in Rome. In the past, he has amply demonstrated his ability to navigate rough seas and succeed in difficult circumstances.

Yet after the presidential feud, a nagging question grows ever more insistent. Can even a man of Draghi’s authority and insight overcome the challenges ahead? For the good of Italy and Europe, hopefully the answer is yes.

Ignazio Angeloni is a researcher at the Mossavar-Rahmani Center for Business and Government, Harvard Kennedy School, and Senior Policy Fellow, SAFE, Goethe University Frankfurt.