ROME, July 18 (Reuters) – Italian Prime Minister Mario Draghi is due to address parliament on Wednesday to clarify his position after the president rejected his resignation last week. Read more
It is unclear whether Draghi will change his mind and stay, whether President Sergio Mattarella will seek to appoint a new prime minister or whether Italy will bring forward a national election to early October.
Here are some of the measures that could be impacted by this government crisis which precedes an election scheduled for the first half of 2023.
MEASURES TO MITIGATE THE GROWTH OF ENERGY COSTS
Italy’s treasury is working on a new 10 billion euro ($10.2 billion) stimulus package aimed at helping families and businesses cope with soaring energy costs, government officials said.
Labor and Ecological Transition ministers said the government expected to approve the program by the end of the month despite Draghi’s resignation.
RECOVERY AND RESILIENCE FUND (PNRR)
Italy is eligible for more than 200 billion euros in post-pandemic recovery funds from the European Union until 2026, but must adopt a series of progressive reforms to ensure that the money continues to flow. .
The government has so far secured nearly 67 billion euros in EU funds, but Rome must hit 55 new targets in the second half of 2022 to secure an additional tranche worth 19 billion euros.
Among these, Italy must by the end of this year approve measures aimed at promoting competition in the markets for products and services. This sparks protests from pressure groups, particularly taxi drivers who demonstrated in Rome last week.
Possibly the most controversial of Draghi’s 17 months in office, the justice reform aims to reduce the length of trials by 25% over five years in criminal cases and by 40% in civil cases, where the situation is even worse. Critics say it risks allowing thousands of criminals to escape justice by dropping cases when the appeals process takes too long. Read more
Justice Minister Marta Cartabia promised that the reform would be completed in the second half of this year.
Italy hasn’t had an autumn election for a century because that’s traditionally when parliament votes on the finance law for the following year.
If the Parliament does not approve the budget in December, the following year’s expenditure is automatically allocated, month by month, on the basis of a draft budget presented by the Treasury in October.
DISPOSAL OF ITA AIRWAYS
It is unclear how the government crisis could affect the sale of a majority stake in state-owned airline ITA Airways, Alitalia’s successor.
The maritime group MSC has submitted an offer with the German Lufthansa (LHAG.DE). They faced a competing offer from the American financial investor Certares who worked with Air France-KLM (AIRF.PA) and Delta Airlines (DAL.N).
FINANCING MONTE DEI PASCHI
A strategic objective of the Treasury under Draghi’s administration is to help the state-controlled bank Monte dei Paschi di Siena (MPS) (BMPS.MI) raise 2.5 billion euros in cash by mid-November via a capital increase.
A vote in the fall would likely disrupt markets, making it difficult for the lender to bring in private investors for the part of the capital-raise that is not covered by the state, bankers say.
ITALIAN UNIFIED BROADBAND NETWORK
State lender Cassa Depositi e Prestiti (CDP) is in talks with Telecom Italia (TIM) (TLIT.MI) on a plan to create a unified broadband operator by combining TIM’s fixed network infrastructure with that of its state-backed competitor, Open Fiber.
CDP, which has a 60% stake in Open Fiber, said on Sunday the project was industrially viable and talks between the parties would continue despite the political crisis.
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Reporting by Giuseppe Fonte and Keith Weir, editing by Angus MacSwan
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