Italy’s Super Mario has 24 hours to save the government

It always seemed too good to last. For 18 months, Italy had enjoyed the unusual distinction of having a sane, stable, grown-up government as all around it populist madness prevailed. Now its future is balanced on a knife-edge, as the administration of respected former European central banker Mario Draghi faces collapse in a risky confidence vote on Wednesday.

To the dismay of governments across Europe, who had been grateful and pleasantly surprised to have the steady-handed bureaucrat in charge of the large but often unstable European economic power, ‘Super Mario’s’ days could be numbered — Draghi now has just 24 hours to save his administration.

If he fails, Italy could face a fractious leadership election with a roll call of unsuitables vying bitterly for the premiership. Have they not understood that the United Kingdom, with its Brexity Conservative Party and the horrors of its current leadership contest, is a cautionary tale, not a role model?

Draghi and other political figures are spending the day before the vote in a blizzard of meetings and manoeuvres designed either to save the government or replace it. Right-wing opposition leader Giorgia Meloni is gleefully calling for immediate elections, posing in front of statistics predicting she will win at least enough votes to lead a right-wing alliance. “Enough of the theatricals!” she declaimed on Twitter: “This [government’s] term is over. We will fight to restore to the Italian people what all other democracies have: the freedom to choose who they want to represent them.” This a comment on the fact that Draghi had been appointed premier by President Sergio Mattarella in February last year after elected politicians had failed.

Perhaps in part due to worries over having the inexperienced leader of the Fratelli d’Italia (Brothers of Italy) – descended from a party founded by Mussolini’s fascist allies – at the heart of government, there has been uproar at all levels inside and outside the country at the prospect of a government collapse. Several industry, farming and trade groups, together with top union leaders have urged the government to continue, while more than 100 Italian mayors, including those from the top 10 metropolitan areas, wrote an open letter about their “incredulity and concern” and called for all sides to show “responsibility”.

The European Union executive was watching Italy “with worried astonishment”, said former Italian premier and current EU economy commissioner Paolo Gentiloni. Spain’s Prime Minister Pedro Sanchez wrote an editorial in Politico underlining the vital role played by Italy and Draghi during the pandemic, war and financial crises currently hitting Europe: “Europe needs leaders like Mario.”

Whether even Italy has one by the end of this week is moot. Losing Wednesday’s vote could lead to Draghi’s second resignation in a week – and this is a man known for calm, not impulsiveness, which in itself shows just how much turmoil there is in his government right now. He suddenly handed his resignation to Matarella last week, when one of his coalition partners, the Five Star Movement (M5S), refused to back him in an important vote on a fiscal package designed to address the cost of living crisis. The government won, but Draghi said the abstention of M5S destroyed the trust that made the coalition viable: “The national unity majority that supported this government since its creation no longer exists.”

Draghi had linked the package to a vote of confidence and declared he would refuse to lead a government without support from the increasingly cantankerous M5S. The party had already split in June over an internal disagreement on sending extra weapons to Ukraine, with foreign minister Luigi di Maio forming a separate party within the government and pledging to support Draghi in defiance of the M5S leadership under former premier Giuseppe Conte.

Matarella refused Draghi’s first resignation, setting the stage for Wednesday’s showdown. Even if he wins, in which case Matarella is likely to want to reappoint him, Draghi will be in a bind. He won’t be happy to have to form a new coalition if M5S refuses to play ball, nor does he want to preside over a lame duck administration unable to make the reforms Italy needs. Yet M5S is demanding its policy priorities, such as a higher minimum wage, are met as a price of its support, which Draghi’s allies dismiss as an unacceptable ultimatum. On the other hand, right-wing coalition partners, including rightist firebrand Matteo Salvini’s Lega, or League, has declared that it wants M5S out.

The alternative would be for a weak caretaker coalition until elections are due in 2023 or snap polls this autumn, neither good options for the country during a period of multiple world and national emergencies.

The crisis is hitting Italy’s fragile economy. The business group Confcommercio has expressed alarm at the developments, with its research office highlighting a progressive reduction in GDP – an estimated decline of 0.6% in July over June’s figures – and zero growth annually. “The political crisis risks having a heavy impact on the economic one,” said Confcommercio president Carlo Sangalli.

The US rating agency Fitch has also joined in, with a statement that “structural reform and fiscal consolidation are likely to become more challenging,” even if Draghi were to remain in charge. “We would expect the parties supporting him to seek greater visibility for some flagship policies as elections approach, amplifying existing tensions. We would also expect them to exert pressure for more fiscal loosening in the next budget law.”

It’s becoming a tangled web. The Italian public do not want the uncertainty of an election – why would they? Even with the troubles experienced by Draghi and the sniping around the “undemocratic” nature of his position, this government has been a welcome change to the unstable, bonkers populist coalitions and suspect leaders of the past. A Euromedia poll, published by La Stampa, found that just 30.8% wanted to go to the ballot box. It’s no surprise that Meloni’s supporters were the keenest – with 65.5% of them wanting an election. It was more complicated for Salvini, who had been the supreme right-winger until Meloni came to steal his thunder, helped by his gaffes, missteps and the general degradation of being a junior coalition partner. Compared to Meloni, he is seen as a spent force.

If there were elections, and Meloni were to win and head a coalition, this could be seismic for Italy. For a start, she would be Italy’s first woman prime minister, although not – as she says herself – a progressive, feminist one. It would also be notable for her party’s fascist past and its alarming contingent of “loonies and fruitcakes.” Fratelli members have been photographed honouring fascist leaders, while their local administrations have been involve in uncomfortable policies, such as making abortion more difficult. Meloni has a Eurosceptic past, which led to the Financial Times worrying that she could pick destabilizing fights with Brussels, although she has dampened down her views considerably. Italian analysts do not expect her government to go out on a limb on Europe if she comes to power, especially with the economy so dependent on EU funding. According to Luigi Scazzieri, senior fellow at the Centre for European Reform, “the risk of conflict between a right-wing coalition and the EU should not be overplayed. A right-wing government would not necessarily want to follow through with its more controversial promises, and it would be constrained by internal divisions.” Although never say never.

Whatever the outcome, snap elections would put in doubt the next tranche of Italy’s funding from the EU’s NextGenerationEU pot for Covid recovery. Even if the premier were willing, it makes it difficult for Italy to meet the reform milestones required for the release of money in December, and the tight timing and uncertainty would make it harder for any incumbent government to properly deploy the money they already have.

Even if the new leader doesn’t turn out to be ultra-populist and damaging, the preference for most Italians would be the status quo – 52.9% would like to retain something closer to the current structure in these difficult times, when the effect of the war in Ukraine and this month’s heatwave and drought compound the already punishing effects of the pandemic. The coalition was always on borrowed time as a manufactured alliance that hadn’t faced the voters, but Draghi had strengthened his country economically and politically, and every month he stays in power is one more month of reassuring calm – or it was, until now.

The editor of the newspaper Repubblica said on Italian television that he believes Draghi actually intends to stay, but wants the other parties to demonstrate their loyalty to their commitments first. Or, as Daniele Albertazzi, professor of Politics at the University of Surrey, put it: “to humiliate the other parties first so that they think twice next time before daring to raise a question or put a proposal on the table.”

“In other words,” he wrote on Twitter, “we cannot understand what Draghi is doing unless we assume this to be the start, not the end, of his journey as a political leader.”

Whether that actually turns out to be the case or not depends on the next 24 hours. If his gamble fails, Italy won’t thank him for it.