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CORRECTED-MNI SOURCES:Italy's Draghi Seen Stepping Down In '22

His coalition partners think Mario Draghi could step down, possibly triggering early elections next year.

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The two biggest parties in Italian Prime Minister Mario Draghi's coalition government are assuming the former European Central Bank president will serve no more than a year or 18 months in office, perhaps with a view to taking the national presidency after early elections, senior sources at the right-wing League and the populist Five-Star Movement told MNI.

After an initial truce following the installment of the technocratic prime minister in February, senior League figures have started to grumble about government plans in public. Complaints will grow in volume now that the National Recovery Plan, vital to access tens of billions of euros in European aid money, has been sent to Brussels, a League source said. Another official at the right-wing party, close to Matteo Salvini, told MNI that the League leader would back Draghi as prime minister until next February and that after that he wanted him to move to the more ceremonial post of president.

The strongest parliamentary force in the coalition, the Five-Star Movement, which led Italy's government for almost three years until former Prime Minister Giuseppe Conte was forced from office earlier this year, wants to take advantage of Draghi's tenure to rebuild around a more centrist political programme. Distancing itself from its beginnings as a noisy populist force founded by a comedian and an internet entrepreneur, it has now appointed Conte as party leader, and in the meantime wants to appear a constructive member of Draghi's coalition.

Five Star is keen to emphasise continuity with Conte's government, a senior party source said, although he noted: "This is where the League makes it difficult for us."

WARY OF OVERSTAYING WELCOME

Sources within the government agreed that they think Draghi wants a short term. He is wary of overstaying his political welcome and hurting his chances of achieving the presidency, they said. One advisor told MNI Draghi is very conscious of the example of another former technocratic prime minister, Mario Monti, who started with significant parliamentary support only to see it dwindle as his popularity ebbed.

Current President Sergio Matarella is due to be replaced next February, with parliament beginning to consider his successor from the end of July. An extension of his seven-year term is the most likely scenario, said Stefano Ceccanti, a constitutional expert and a member of parliament for the centre-left Democratic Party, which is also part of Draghi's coalition, adding that Matarella would go when the prime minister was ready.

If Matarella's term is extended as part of a plan to hand over to Draghi, a general election would have to be held before he finally steps down, in order to anoint the former ECB chief as the next president, Ceccanti said. As polls stand now, such a parliament would likely be dominated by the right. Asked whether Draghi could continue to press for structural economic reforms from the presidency, Ceccanti replied that this would be, while constitutionally permissible, difficult, and that he would need his successor as prime minister to be an ally.

"Draghi can't leave the executive [to jump directly to the presidency] without a clear candidate to substitute him," he said.

EUROPEAN ROLE

In the meantime, gaining approval for the Recovery Plan and ensuring a swift vaccination roll-out are Draghi's priorities for now, a source on his team of advisors said. Afterwards he will shift his attention to building his image as a European leader with drives for the EU to forge ahead with banking union and a common European budget, they said.

"The president will try to use its influence in Europe to push for these topics" said the source, adding that Draghi speaks with German's Chancellor Angela Merkel more than twice a week and has a strong relation with France's Emmanuel Macron.

But, with a key meeting of European finance ministers due to consider banking union and other key issues in June, Draghi's teams are giving little away about Italy's negotiating position. While Italy has been an enthusiastic proponent of joint European initiatives, it has resisted demands by countries like Germany for moves including an end to zero-risk-weighting of sovereign bonds held by banks, an arrangement which has helped control its financing expenses but at the cost, critics say, of potentially increasing financial stability risks.