Italy is set to hold a general election on 25 September, after President Sergio Mattarella dissolved the parliament on 21 July, following outgoing premier Mario Draghi’s resignation. The government of national unity headed by the former president of the European Central Bank (ECB) collapsed after a year and a half in power, after failing to get the backing of three important parties in a confidence vote:  ex-premier Giuseppe Conte’s 5-Star Movement (M5S), Silvio Berlusconi’s Forza Italia (FI) and Matteo Salvini’s League.

Italy’s government crisis probably hits EU institutions at the least opportune moment: Europe is in the midst of an energy crisis, begins to struggle somewhat in bringing financial assistance to Ukraine and, as far as the economy is concerned, could face difficult months in autumn. The president of the European Commission, Ursula von der Leyen, counted on and would like to continue to count on Draghi. He is likely to also be missed by other European leaders.

Paris fears “period of uncertainty”

Ahead of Draghi’s resignation, the French European Affairs Minister Laurence Boone said in an interview with radio France Inter on Thursday (21 July), that it would open a “period of uncertainty” and mark the loss of a “pillar of Europe.”

The 74-year-old former governor of the ECB enjoys close and warm ties with French leader Emmanuel Macron, with the two pro-EU statesmen concluding a new Franco-Italian treaty last year.

Spanish support for Draghi

“Europe needs leaders like Mario Draghi”. This was the clear and unequivocal message of support from Spanish Prime Minister Pedro Sánchez in an article published on 19 July in the European media Politico.

According to Sánchez, he got to know Draghi when he was president of the ECB and played a “key role in defending the euro” by promising to do whatever was necessary to preserve the single currency.

Fears regarding the euro and reform backlog

There are fears that the government crisis in the heavily indebted country and third largest EU economy could endanger the euro. The planning and adoption of the future budget could also be problematic if a new government is not in any working order by November.

Furthermore, Draghi’s exit raises concerns over Italy’s ability to meet the deadlines set up in its Recovery and Resilience plan worth around 200 billion euros. It is expected to be completed by August 2026, lifting Italy’s gross domestic product by 1.5 percent to 2.5 percent. Italy is the biggest recipient of the EU Recovery Fund and its plan includes 132 investments and 58 reforms addressing the specific challenges of the country. Many of these reforms were expected to be completed by the end of the legislative period next spring.

However, the snap elections in September risk to delay or even jeopardize the reform agenda agreed upon by Brussels and Rome. “The ballet of the irresponsible against Draghi may cause a perfect storm,” the EU Commissioner for Economy Paolo Gentiloni stressed in a very harsh tweet, adding that “now is the time to love Italy: we have difficult months ahead of us but we are a great country.”

Italy moving to the right …

The right-wing Brothers of Italy (FdI) party led by Giorgia Meloni, the only major group not to back Draghi’s government, is currently on top of the opinion polls, with the support of around 23 percent of the electorate.

Giorgia Meloni, leader of the right-wing Fratelli d'Italia (Brothers of Italy) party, speaks at a party event.  Meloni said in an interview published Saturday that she is ready for the top office, as Italy charts an uncertain course following the resignation of Prime Minister Mario Draghi.
Archive: Giorgia Meloni, leader of the right-wing Fratelli d’Italia (Brothers of Italy) party, speaks at a party event. Foto: Cecilia Fabiano/LaPresse via ZUMA Press/dpa

The right-wing League of Matteo Salvini is polling at around 13-14 percent and centre-right FI at around 8 percent. In sum, this should give the right/centre-right a working majority in parliament if the polls translate into real votes at the ballot box. This would put Meloni in a strong position to become Italy’s first female prime minister. Meloni is the president of the European Conservatives and Reformists Party (ECR), which forms the ECR group in the European parliament together with Spanish Vox, Polish Law and Justice Party (PiS) and others.

Such a government could – among other things – be problematic with regard to migration policy and relations with the EU.

… or the left?

The centre-left Democratic Party (PD), which is a close second to FdI in the polls, is currently working to forge an electoral alliance considered necessary to beat the right/centre right coalition. According to political commentators, if PD, M5S and a number of smaller parties do not agree on a pact, their chances of stopping the right/centre right appear slim at this point in time.

PD leader Enrico Letta framed Italy’s upcoming election as a contest between the pro-EU stance of his centre-left group and the Euroscepticism of Meloni’s FdI. “This will be the most crucial Italian vote in the history of Europe,” Letta said. “The election will give a clear result and it will go in one direction or another. There won’t be a draw. Either the Europe of the EU wins, or that of nationalism does. The choice is between us and Meloni.”

This article is published Fridays. The content is based on news by agencies participating in the enr.