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(MNI) ROME

Sources close to Italian Prime Minister Mario Draghi are unsure whether he will manage to convince the Five-Stars Movement to vote in line with the rest of his coalition in a Senate confidence motion on Thursday, they told MNI, though members of the populist party played down the risk of an imminent government collapse.

There is a strong possibility that the Five Stars senators will leave the chamber during the vote on a stimulus package to help homes and industry cope with soaring energy prices, which would mean that Draghi would no longer be prepared to stay as prime minister, two government sources said.

“It is possible that the government will end because of this crisis,” one told MNI, with the other saying “I see an equal chance that we survive or fall.”

Draghi has indicated that he will try to meet some of the policy demands contained in a nine-point document sent to him by Five-Stars leader Giuseppe Conte, including a cut in payroll taxes and the creation of a minimum wage. But, while Conte has given him the rest of the month to respond, events may be spiralling out of control, the sources said.

“We don’t know whether dealing with Conte is worth it, as it is unclear if he can control his people,” said one of the sources in the government.

PRESIDENT'S ROLE IN CRISIS

Draghi insisted this Tuesday during a press conference that he would not continue to lead the government without the presence of Five Stars, though he added that if the populists did walk out he would ask President Sergio Mattarella to try to resolve the resulting crisis.

While the government would still have a big majority in both houses even without Five-Stars, Draghi would find himself uncomfortably beholden to the hard-right League, a parliamentary source said.

Aware of the potential for increased political turbulence as general elections due next spring draw closer, Draghi had already accelerated plans for setting his 2023 budget, with measures such as a cut in payrolls tax to compensate for the inflationary erosion of purchasing power now under discussion with business groups and unions. If the government tilts into crisis, sources said there could be a last-ditch attempt to accelerate budget preparation in what could be its final days. (See MNI: Italy To Start Work On Tighter 2023 Budget Early-Official)

Conte miscalculated Draghi’s willingness to walk away from government, sources from the Five-Stars Senate group told MNI. The Five-Star leaders thought that the government would survive for several months at least, even if his party members resigned their ministerial positions, but Draghi has now called his bluff.

The document containing the nine demands was an attempt by Conte to buy time from his own party by persuading lawmakers to wait a little longer for him to win more policy concessions, a Five-Stars source said. The party will agree a joint position on what to do in the vote on Wednesday, one of its senior senators told MNI.

GOVERNMENT WOULD BE WOUNDED

A Five-Star abstention would not prompt the immediate collapse of the government but would open what could be weeks of negotiations led by Mattarella, the party sources said. Conte could argue that Five-Stars was rejecting only the economic measures included in the confidence vote and not the government itself, they added.

But the prognosis for the Draghi administration would be poor.

“If it manages to survive a bit longer, the government would be terribly wounded, and I don’t think it would manage to function properly,” the senator said.

A key factor in political calculations is the desire by lawmakers, including some Five-Star members, to ensure that parliament is not dissolved before Sept. 24, after which date they will qualify for a full parliamentary pension, a source working for the Senate said.

“This can be one of the keys of this crisis,” the Five Stars senator acknowledged, adding that the party’s Senate group was riven by discord and that more defections, following the major split which saw about a fifth of its parliamentarians leave the party last month, could not be ruled out.

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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