Political Instability Looms in Italy

UPDATED: Italian lawmakers reelected a reluctant Sergio Mattarella as president, warding off a political crisis, at least for now.

• On Saturday, Italian lawmakers reelected Sergio Mattarella, an 80-year-old former constitutional court judge, as president despite the fact that he had made clear he was ready to retire.
• But after seven rounds of voting, Italy’s weak and divided political parties were unable to agree on another president — forcing them to beg Mattarella to return to the post.
• Mattarella’s reelection staved off a political crisis in Italy, at least for the short term. Italy’s current prime minister, Mario Draghi, had made clear he wanted to replace Mattarella.
• Draghi—a technocrat who previously served as the head of the European Central Bank during the turbulent days of the eurozone debt crisis—is widely respected in Italy.
• His departure as prime minister would have meant Italy’s broad coalition government would have been cast into disarray or possibly collapsed.
• But even though Draghi remains in the post, the divisions laid bare during the fight over presidency are likely to make governing much harder over the next year, ahead of new elections.
• BACKGROUND: Italy is the EU’s third largest economy and, as a member of the eurozone, deeply interconnected with economies throughout Europe—and by extension the world.
• But Italy is also a highly indebted country that has for decades struggled to grow its economy. Compounding its problems is notorious political instability.
• Over the past year, Prime Minister Mario Draghi provided Italy with rare degree of political durability as he pushed through a series of economic reforms intended to boost growth.
• The stakes for Italy and the eurozone are exceedingly high. Italy’s debt has skyrocketed during the pandemic. If Italy’s reforms fail, it spells big trouble for the entire eurozone.