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MNI (Rome)

(Updates to add Italian government denial)

Italian Prime Minister Mario Draghi has told close advisors to gauge the possible impact of his departure on financial markets as he considers moving to the country’s presidency in February, two sources familiar with the matter told MNI, though a government spokesperson denied the claim.

Draghi has also asked his team to avoid any serious confrontation within his coalition in the weeks leading up to January’s secret ballots by both houses of the Parliament and regional representatives to elect the successor to President Sergio Mattarella, the sources said.

Italy’s political parties want a new president able to use the largely ceremonial role in the interests of stability, but while Draghi meets the job description, he would first want to lay the foundations for his government to be able to survive without him. A recent article in the Financial Times warning of trouble if Draghi leaves the premiership caused dismay in his inner circle, one of the sources said, noting that a negative market reaction to a change in his role would be more likely if the coalition collapses, triggering snap elections.

“It is hard to believe that the government can survive the summer without Draghi,” one of the sources said.

A spokesperson for PM Draghi said the prime minister has never asked advisors to gauge the possible impact of his departure and nor has he asked his team to avoid confrontation with the coalition parties.

There is for the moment no clear potential successor to the former European Central Bank chief as PM, with the same capacity to draw together parties from across the political spectrum in a working relationship. While he has not commented publicly on a bid for the presidency, political observers say that he sees the role of head of state as one in which he could continue to exert an influence beyond the window of this parliament, which must end by mid-2023.

But the end of Italy’s pandemic state of emergency, scheduled to last until Dec. 31, would be a key milestone for the prime minister, who took on the national leadership after the collapse of the former government of Giuseppe Conte with what he viewed as a clear mission to return the economy to normal and to pass the reforms necessary under Italy’s Recovery Plan to obtain NextGenEU funds.

FEAR DRAGHI COULD WALK AWAY

While many coalition members would prefer for Draghi to stay in his current role, parliamentarians are still likely to vote for him to be president, sources said, adding that if were to put himself forward and then suffer defeat his government could be terminally weakened anyway. Another consideration is that Draghi could walk away from politics if he fails to get the presidency, with a source close to the PM and a senior official from the centre-left Democratic Party both commenting that he is tiring in his current role.

On the other hand, some MPs could be reluctant to vote for a change which could endanger the government and bring forward early elections which could see them risk their seats before they have served enough time to secure pension benefits, particularly as the next parliament is set to be one-third smaller.

With the prime minister keen to avoid any coalition disagreements, he has pared back new initiatives (see MNI: Parties Press Draghi To Say If He Will Stay As Italy's PM) and is focussing on meeting the targets of the Recovery Plan and on preparing the national budget, which may now need to be amended to mitigate the rise in energy prices but which is set for approval on schedule, the sources said.

Talks around the election of the next head of state will intensify in the coming weeks, and have already been complicated by the public arrival in the race of former Silvio Berlusconi. While few take the former prime minister’s bid seriously, he has attracted public support from the right-wing League and the hard-right Brothers of Italy.

MNI Rome Bureau | +34-672-478-840 | santi.pinol.ext@marketnews.com
MNI Rome Bureau | +34-672-478-840 | santi.pinol.ext@marketnews.com

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