Sunday, August 14, 2022
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Italy’s New President Stands to Make or Break the Economy

This week, Italian MPs will vote for a new president in a secret ballot that is notoriously difficult to anticipate, and this time is no exception.

The President of Italy has limited powers, but he can appoint a prime minister and influence the government’s economic strategy, and there is a lot at stake with a general election scheduled for early next year.

The next prime minister, who will almost certainly lead a coalition government, will have to keep the economy on track.

The epidemic hit Italy hard, but it had been stagnating for years before that, and international investors are hoping that the EU member state would continue to expand.

Italy’s conservative coalition suggested three probable candidates on Tuesday, following an inconclusive second round of voting, leaving the centre-left parties to reply as parliament remained divided over a successor to President Sergio Mattarella.

“We are not here to impose anything on anyone,” Matteo Salvini, the League’s leader, said during a press conference.

Critics of Italy’s political system, in which administrations are often formed by a coalition of diverse parties, may argue that the economy has escaped a bullet since controversial former Prime Minister Silvio Berlusconi withdrew from the race over the weekend.

The current Prime Minister, Mario Draghi, a former head of the European Central Bank, is widely regarded as the favorite to take up residence at the Quirinale Palace, which was previously the abode of Popes and Kings, but favorites seldom prevail.

He would have the ability to choose a prime minister, reject cabinet nominations, and send legislation back to parliament for reconsideration if elected president. These are effective instruments for keeping changes on track, and they have the potential to prevent any future government from derailing the economy.

Who would succeed Mr. Draghi as Prime Minister if he were to become the next President of the Italian Republic, and would Rome’s existing political stability be jeopardized?

The Italian economy was hit hard during the onset of the coronavirus epidemic, when the country was put on lockdown, but firms are doing well again.

“The current government is a broad coalition led by Mario Draghi, the former President of the European Central Bank, and it’s unclear what kind of coalition will emerge from the next general election, which is scheduled for early 2023,” Paola Subacchi, Professor of International Economics at Queen Mary University of London, told reporters.

She said that the economy’s health is linked to political stability, which has been attained with Mario Draghi at the head.

Mr. Draghi has succeeded in gaining cross-party support for the European Union’s recovery plan, as well as generating momentum for reforms and tighter financial discipline.

Italy is set to get €191 billion ($215 billion, £160 billion) in grants and loans from the EU’s €750 billion ($847 billion, £627 billion) recovery fund.

An electoral college of 1,009 persons, largely members of parliament, as well as senators and 58 delegates from Italy’s regions, elects the president for a seven-year term.

The winner must get a two-thirds majority in the first three rounds of voting, although an absolute majority in the fourth round is sufficient.

Mario Draghi, who described himself as a “grandfather in the service of the institutions” in a hidden message to Rome insiders last month, said he was open to becoming president.

Paolo Gentiloni, the 67-year-old European Union commissioner for the economy, is another contender who might enter the contest.

Those wishing to see Italy’s first female president should keep an eye on Marta Cartabia, 58, and Paola Severino, 73, the current and past justice ministers.

Bob Carlson
Bob Carlson
Bob Carlson is a business journalist, with over a decade of experience in the trenches of reporting up-to-date business news for publications all over the world. With a wealth of knowledge at his back, Bob strives to bring the most important insights into the business world for TheOptic daily.
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