PM Giuseppe Conte wins Senate vote and leads minority government

Italian Prime Minister Giuseppe Conte is seen after addressing senators.

ANDREAS SOLARO | AFP | Getty Images

LONDON – Italy avoided further political chaos on Tuesday after Prime Minister Giuseppe Conte survived a vote of confidence in Parliament’s upper house.

The country was involved in new political uncertainties last week after a smaller party withdrew its support for the coalition government – thereby depriving it of a majority in parliament.

However, Italian lawmakers in the Senate supported Conte during a vote on Tuesday by 156 to 140, allowing him to remain in office. He was also supported by the lower house of parliament in a vote on Monday night. Conte will now lead a minority administration in a country subject to political disputes.

Italia Viva, the small political party established by former Prime Minister Matteo Renzi, left the coalition last week because of differences over how to invest the next EU funds to boost the Italian economy.

Renzi was accused of acting in his own political interest, seeking to increase public opinion about his newly established group. His party abstained from the crucial vote on Tuesday night, instead of choosing to go against Conte and help topple the government.

One of the main challenges for the now minority government, in addition to the coronavirus pandemic, will be to rescue the Italian economy, where GDP (gross domestic product) is expected to fall 10% in 2020.

The coalition formed by the Five Star Movement and the Democratic Party, two pro-EU parties, must submit a recovery plan to Brussels by mid-February for approval.

Speaking on Monday evening, Paolo Gentiloni, European Commissioner for Economic Affairs and who will assess recovery plans, said that “fiscal imbalances are in danger of deepening.”

The eurozone has worked to reduce public deficits and debt levels before the pandemic and there are concerns that fiscal positions will be much worse after the pandemic, if the next stimulus is not well invested.

Lucky for the third time?

This is not the first time that Conte has survived the internal divisions of his government. The former law professor without political affiliation was the compromise candidate named prime minister in June 2018, when the Five Star Movement and the anti-immigration party Lega formed a coalition.

However, in the summer of 2019, Lega provoked a vote of no confidence in the coalition government, but found himself replaced in the government by the Democratic Party, which would become Italia Viva.

Just over a year since then, Conte remains in power, but with his third government formation.

The bond market showed some concerns over the past week over the latest political dispute in Italy sending slightly higher yields.

However, the market reaction has been somewhat subdued due to the broader European context, in which the European Central Bank continues to buy large amounts of public debt and the European Commission will soon be distributing new funds.

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