Italy’s Draghi resigns, far right in lead to take reins in Rome

(CN) — Italy headed toward early elections – and quite likely a far-right government – on Thursday after Mario Draghi, a former head of the European Central Bank, resigned as prime minister with the collapse of his technocratic “unity” government.

The fall of Draghi has plunged not only Italy but the entire European Union into uneasy waters because the next government in Rome looks set to be led by far-right leaders who've expressed anti-EU views and shown support for Russia.

What happens in Rome has implications that go well beyond Italy. Italy, the EU’s third largest economy, is seen as a very volatile member inside the EU because of its enormous public debt, which is a constant threat to the bloc’s euro currency, and the rise of far-right political parties.

Italian markets were rattled Thursday, a situation compounded by a larger-than-expected interest rate hike by the European Central Bank meant to cool rising costs. Europe is struggling with 8.6% inflation and concerns are mounting about a looming economic recession.

Polls show the post-fascist Brothers of Italy party, led by the rising star of Italian politics Giorgia Meloni, is likely to come out slightly ahead in new elections. Meloni, then, is tipped to have a good chance to become Italy's next leader, a shocking prospect because her radical party was until recently viewed as a fringe force. She would also be Italy's first female premier.

Meloni, 45, was born into a working-class family in Rome and at age 15 entered politics by joining the youth wing of the Italian Social Movement, a party founded after World War II by former army officials under Benito Mussolini.

Polls show Meloni's party picking up about 23% of the vote. In Italian, the party is called “Fratelli d'Italia,” the opening line of the national anthem. Meloni opposes gay marriage, advocates closing Italy's borders to migrants and favors smaller government, tax cuts and shrinking welfare. She's also expressed warmth towards Russian President Vladimir Putin in the past. Mussolini's granddaughter, Rachele Mussolini, is a party member who sits on Rome's municipal council.

Pundits predict Meloni would likely join forces with Matteo Salvini's far-right League and Silvio Berlusconi's center-right Forza Italia to form a coalition government.

Daniele Albertazzi, a politics professor at the University of Surrey in England, said a Meloni-led government is a “strong possibility” but that she too could quickly run into problems.

“The timing of it risks turning the opportunity into a poisoned chalice for her very, very rapidly,” he said, commenting on Twitter.

He said a Meloni government may find its support among Italians volatile. “Voters aren't loyal to parties anymore,” he said. “She knows it well, that's why her opportunity is now. But honeymoons can turn into opposition quickly.”

However, Albertazzi said Meloni could benefit by ensuring that the huge sums of EU coronavirus pandemic recovery funds “continue to flow to Italy.”

He added that Meloni could face challenges from Salvini, who would “immediately start agitating, differentiating himself from her party, stressing his own priorities.”

After joining in an unlikely coalition with the anti-establishment, left-leaning 5-Stars in 2018, Salvini became the face of the Italian government with his outlandish statements and tough tactics against migrants. He overshadowed the 5-Stars even though they had more seats in parliament than the League.

Still, Albertazzi said a right-wing coalition made up of the Brothers of Italy, the League and Forza Italia likely would find it easier to govern because “ideologically … their voters are very compatible.”

Draghi, 74, was brought in 18 months ago at the height of the pandemic to steer a technocratic government through the crisis and oversee Italy's massive EU-funded recovery package.

His government imposed tough coronavirus restrictions, such as mandatory vaccination for workers, and was praised for crafting well-designed plans for the use of EU recovery funds.

But after months of growing discord and political jousting ahead of scheduled elections in the first half of 2023, the 5-Stars pulled the plug on Draghi and refused to support a 26 billion euro ($26.4 billion) bill meant to help Italians handle soaring costs. Besides seeking to score political points by opposing Draghi, the 5-Stars also opposed the inclusion of a giant trash incinerator in Rome as part of the aid package.

On Wednesday, the 5-Stars were joined by the League and Forza Italia in withdrawing their support for Draghi. By Thursday morning, Draghi handed in his resignation and Italian President Sergio Mattarella dissolved parliament and scheduled new elections for Sept. 25. This is the first time Italians will go to the polls to elect a new parliament in the fall.

The end of Draghi's reign was dreaded by many in Italy, who saw him as elevating the country's stature on the world stage and pushing to modernize Italy and its institutions. He also made sure Italy was squarely behind the EU, NATO and the Western front against Russia over its war in Ukraine.

There are now concerns the government crisis will leave Italy unable to pass a budget, which is done in the autumn, and even lose out on hundreds of billions of dollars in EU recovery funds.

Italy is eligible to to receive as much as 248 billion euros ($252 billion) in recovery funds by 2032, according to the Italian government.

But to receive the funds, Italy is required to implement numerous reforms, including streamlining its notoriously long procedures for civil trials, reduce tax litigation and modernize its public administration.

The demise of Draghi's coalition marked the end of the 67th government since the founding of the modern Italian republic after World War II.

Courthouse News reporter Cain Burdeau is based in the European Union.

Follow @cainburdeau

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