Italian Prime Minister Giuseppe Conte is seen after addressing senators.
ANDREAS SOLARO | AFP | Getty Images
LONDON – Italy avoided political chaos on Tuesday after Prime Minister Giuseppe Conte survived a vote of confidence in parliament’s upper house.
The country had been embroiled in fresh political uncertainty in the last week after a smaller party withdrew support for the coalition government – removing it from a majority in parliament.
However, Italian lawmakers in the Senate backed Conte in a vote on Tuesday, 156 to 140, allowing him to remain in office. He was also supported by the lower house of parliament in a vote on Monday night. Conte will now lead a minority administration in a country prone to political disputes.
Italia Viva, the small political party set up by former Prime Minister Matteo Renzi, left the coalition last week over differences over how to invest future EU funds to support the Italian economy.
Renzi was accused of acting in his own political interest, trying to stimulate public opinion for his new group. His party abstained from the crucial vote on Tuesday night, rather than opting to go against Conte and help bring down the government.
One of the main challenges for the now minority government, apart from the furious coronavirus pandemic, will be to save the Italian economy, where GDP (gross domestic product) is expected to fall by 10% by 2020.
The coalition of the Five Star Movement and the Democratic Party, two pro-EU parties, must present a recovery plan in Brussels by mid-February for approval.
Speaking on Monday night, Paolo Gentiloni, the European Commissioner for Economic Affairs and who will evaluate the recovery plans, said that “fiscal imbalances risk deepening”.
The eurozone has worked to reduce public deficits and pre-pandemic lending levels, and there are concerns that fiscal positions will be much worse after the pandemic if the future stimulus is not well invested.
Lucky for the third time?
This is not the first time that Conte has survived the internal divisions in his government. The former law professor with no political affiliation was the compromise candidate appointed prime minister in June 2018, when the Five Star Movement and the anti-immigration party Lega formed a coalition.
However, in the summer of 2019, the Lega caused a vote of no confidence in the coalition government, but it came to be replaced in the administration by the Democratic Party and what would later become Italia Viva.
In a little over a year, Conte remains in power, but with the third government formation.
The bond market has shown some concern over the past week, and the latest political dispute in Italy has yielded slightly higher yields.
However, the market reaction has been somewhat limited due to the wider European context, in which the European Central Bank continues to buy large amounts of public debt and the European Commission will soon distribute new funds.