By Silvia Marchetti
ROME (MaceNews) – Italy’s local elections on Sunday-Monday have further weakened the ruling coalition and the outcome is likely to delay the approval of a key plan by parliament to apply for European pandemic aid.
The center-right League Party of populist Matteo Salvini triumphed in the Marche region, a traditional Democratic stronghold, and in three other regions, while the smaller far-right Brothers of Italy group also increased its standing nationwide.
The results showed Italy’s political map no longer matches the balance of power in parliament. Out of 21 regions, only six still belong to the ruling coalition’s Democrat party and to the Five Stars Movement, which performed poorly and is now the fourth largest political group in the country. The losses for the governing parties occurred despite overwhelming voter approval for a government-supported referendum to cut the number of MPs.
The vote’s outcome is set to destabilize the government of Premier Giuseppe Conte in a critical moment when parliament must approve two key documents: the next budget law, and an ambitious plan to apply for the European Recovery Fund set up to help member states weather the economic impact of the COVID pandemic.
Italy is expected to be the biggest beneficiary of the EUR 750 billion fund, with roughly EUR 210, provided it furnishes Brussels a detailed plan on how it intends to invest the money. The plan must be supported by all political parties in parliament to be credible.
The government has drafted a proposal of 500 projects, from infrastructure to social welfare, which need to be widely shared with center-right groups in parliament before submitted to the European commission. The regional vote outcome will make dialogue on this front harder between the ruling coalition and the opposition.
Conte also needs all parties’ support to clear the next budget law with critical economic measures to support Italy’s COVID-hit economy. The budget document must be forwarded for approval to the European Commission by the end of the year. The ruling coalition, relying on a thin parliamentary majority, might be forced to accept changes the opposition is bound to make to the budget decree.
Rome does not intend to use EUR 25 billion in loans from the European Stability Mechanism for health spending, mainly due to the opposition of the 5 Stars. Any delay in receiving granted the EU pandemic recovery funds, which will be financed through euro bond issuance, would push Italy to expand its deficit spending, adding to debt sustainability risks.