MNI:Italy's Draghi Faces Hot Summer As Coalition Demands Build

Members of Italy's governing coalition are readying a shopping list of demands in return for backing key economic legislation in what could be a politically turbulent summer, as a potential split by the largest party in parliament adds to worries for Prime Minister Mario Draghi, government and parliamentary sources told MNI.

With decrees to enact stimulus package measures and accelerate bureaucratic procedures necessary to unlock hundreds of billions of euros in European funds due to be ratified between mid-July and the end of August, parties are queuing up to make amendments, emboldened by the so-called "white semester" ahead of the election of Italy's next president in February during which parliament cannot be dissolved. The two decrees have already notched up more than 3,000 amendments between them, with a risk that the reform of Italy's bureaucracy in particular will be significantly watered down, parliamentary sources said.

Parliament was already gearing up to make big changes to planned overhauls of Italy's tax and justice systems, sources have told MNI.

Making matters more complicated is a crisis in the Five-Star Movement, the largest source of support for the government. Five-Star founder Beppe Grillo is on the verge of leading a breakaway faction as he resists attempts by former prime minister Giuseppe Conte to remodel the populist movement into a more conventional centrist party. Draghi has personally contacted senior figures of the populist force to try to evaluate the danger that it will split, a government source said.

FIVE-STAR TENSIONS

Any loss of Five-Star votes could weaken Draghi's majority and leave him leaning heavily on the right-wing League. While League leader Matteo Salvini is now prepared to support the prime minister until 2023, after having earlier wanted him to step down in February 2022, he would attempt to dilute the court and tax reforms and push the former European Central Bank president to take a tougher line with the European Union.

Salvini has prime ministerial ambitions himself, and has started talks to merge with Silvio Berlusconi's Forza Italia in a bid to ensure he finishes as the lead candidate to lead a government in two years' time if his electoral alliance with the far-right Brothers of Italy emerges in control of parliament.

Given the likelihood that parliament will soon become harder to handle, Draghi is trying to speed up approval of some measures, such as an end to a ban on laying off employees enacted to support workers during the pandemic, and the conclusion of a cashback programme, heavily backed by Five-Star and meant to encourage the use of cashless payments, a government source said. The layoff freeze will end on July 1 as planned, the source added.

But Draghi may need to buy some continued support from Five-Stars and the League. A fresh EUR100 million bridge loan for national airline Alitalia, which was nationalised last year at the height of the Covid crisis, may have been provided for that reason, a source from the Economic Development Ministry told MNI.

"I don't think Draghi would do this in an ideal situation, but I think he sees Alitalia as a pawn to pay for more stability," said the source, stressing that the amount of money involved is minimal compared to the huge sums involved in the country's EU-funded National Recovery Plan.