Trial now
AUSSIE 10-YEAR TECHS

(Z1) Off Lows, But Remains Weak

USDCAD TECHS

Still Vulnerable

AUDUSD TECHS

Bullish Price Sequence

MNI: Italy Regional Votes Put Focus On League's Coalition Role

MNI (London)

A poor showing in regional elections could prompt calls in the far-right League to distance itself from Mario Draghi.

Sign up now for free access to this content.

Please enter your details below and select your areas of interest.

October's regional Italian elections may prove crucial for the future course of Prime Minister Mario Draghi's unity government, with winning parties likely to demand a bigger say on national policy and with big implications for the coalition role of the far-right League in particular, senior politicians told MNI.

A poor result in Calabria for the League, which faces increasing competition on the right from the Brothers of Italy, now the biggest party outside government, could prompt heart-searching about its role supporting Draghi and about its leader Matteo Salvini, a League source said.

Some in the League would blame a setback on the decision to become part of Draghi's technocratic coalition, and call for a more critical approach to the prime minister's reforms, while others including Economic Development Minister Giancarlo Giorgetti would seek more not less engagement with the government agenda, the source said.

While the effect on the League's relations with Draghi is hard to predict, Salvini will likely survive any turmoil, given a lack of charismatic rivals, the source said.

Other major coalition players, the Five-Star Movement and the Democrats, also face challenges in the Oct. 3-4 elections in which up to a fifth of the electorate will be eligible to vote and which will be held in big cities such as Rome, Milan, Torino, Bologna and Naples. In some cities, these two forces have agreed electoral alliances, and good results could prompt the two to work more closely both in future elections and within government, said Francesco Boccia, a Democrat and former government minister.

Democrat leader Enrico Letta will face a significant test as he bids for a seat in the national parliament in an election in Siena. Letta, a former prime minister for his centre-left party, has been facing growing internal criticism.

"It is better to have your leader in parliament rather than out," said Boccia.

REFORM MOMENTUM SLOWS

In the case of Five-Star, which has been remodelling itself from an upstart populist grouping into a more traditional centrist party, success in the local votes could prompt a bid for a more prominent role in the coalition, a senior Five-Star official told MNI.

While the political parties manoeuvre, Draghi's "inner government" of his most trusted ministers is uneasily aware that momentum towards passing key reforms, including of the tax and court systems, has flagged in recent months, though officials are confident of swift progress once the elections are over, a source in the Public Administration ministry told MNI.

Boccia was confident that the reforms will soon be back on track, largely because passing them is a requirement for Italy to receive cash from the EU's NextGenerationEU Covid aid programme. But, he added, the differences within the coalition mean it may not be possible for Draghi to try to add other reforms to his list, such as a mooted overhaul of social security.

One reason for slowing progress on the government's agenda has been that coalition members have felt outshined by Draghi, the former European Central Bank president, leading them to jostle for attention in areas away from economic legislation, such as pandemic health measures and identity politics, the Five-Star official said. A Five-Star emboldened by electoral success might engage more fully in the reform process, he added.

The elections could also provide a pointer on the future of the growing alliance on the right between the League and Giorgia Meloni's Brothers of Italy. While the two are rivals, they have decided on some common candidates, and October's results will be crucial in determining whether this association deepens, said Carlo Fidanza, a member of the European Parliament for the Brothers of Italy who is responsible for its foreign affairs brief.

While Fidanza admitted that the local elections, centred in traditional leftist strongholds, may prove a bruising experience for the right, his party and the League hope to be in pole position if they join forces in national elections he expects in 2023.