Italy’s new government to deal with Covid and economic recession

Cheryl Sanders
February 13, 2021

One of the reasons so many parties have joined forces in the ruling coalition is that they all want to have a say in how Italy spends more than $307.8 billion it is set to receive from a European Union economic recovery fund.

Italy's incoming Prime Minister, Mario Draghi arrives on 13 February 2021 for a formal handover ceremony with the outgoing Prime Minister at Palazzo Chigi in Rome.

The president emphasised the urgency of moving quickly to fill the political vacuum as Italy's Covid-19 death toll approaches 100,000 and the country battles its worst recession since World War II.

Following a week of consultations, nearly all the main parties from across the political spectrum have endorsed Draghi, and he named a number of prominent figures from these various groups as ministers to cement their support.

Italy has high hopes for its new leader, dubbed "Super Mario" after vowing to do "whatever it takes" to save the euro single currency during the 2010s debt crisis.

Italy has been without a fully functioning government for nearly a month since former prime minister Matteo Renzi withdrew his Italia Viva party from Conte's coalition, which also included the M5S and centre-left Democratic Party (PD).

Mario Draghi, the former head of the European Central Bank, took charge of Italy's new government on Friday, and unveiled a cabinet that mixed unaffiliated technocrats with politicians from across his broad coalition.

La Stampa daily summed up the mood in the country with its Saturday morning headline: "Break a leg".

These include Economy Minister Daniele Franco, Interior Minister Luciana Lamorgese and Justice Minister Marta Cartabia, who was the first woman president of Italy's Constitutional Court.

The new team will be sworn in on Saturday, opening the way for debates in both houses of parliament early next week, where Draghi will unveil his policy plans and face votes of confidence - a formality given his cross-party backing.

The incoming government inherits an array of problems, from a pandemic that's claimed more than 90,000 lives in the country to a debt load at nearly 160 per cent of output in an economy mired in the worst recession since World War II.

It is supported by all the parties in parliament, except for the right-wing Brothers of Italy (FdI) group.

It includes the populist Five Star Movement (M5S), the centre-left Democratic Party (PD) and Italia Viva - who made-up the previous government before falling out over the handling of the Covid-19 pandemic.

That post has gone to renowned physicist Roberto Cingolani, who works at Italian aeronautics giant Leonardo.

Draghi's arrival was greeted with delight on the financial markets - Italy's borrowing costs dropped to a historic low this week - but the task facing him is huge.

Political cooperation will also improve chances of speedy passage of spending packages and other legislative priorities so Mr Draghi can lead the nation into recovery.

The Covid-19 shutdown and waves of subsequent restrictions caused the economy to shrink by a staggering 8.9 percent previous year, while more than 420,000 people have lost their jobs.

The virus remains rife and Conte's cabinet, in one of its last acts, yesterday tightened curbs in four regions and extended a ban on inter-regional travel. The country's economy has also been hit especially hard.

Draghi's job is easier than that faced by previous technocrat prime ministers, such as Mario Monti, who turned to severe, unpopular austerity measures during the debt crisis.

Other reports by iNewsToday