Italy adopts stimulus plan but government risks imploding

“The Council of Ministers has validated the #RecoveryPlan, the largest investment plan ever undertaken in Italy”, welcomed the Minister of the Economy, Roberto Gualtieri, on his Twitter account.

This “Recovery plan”, which has yet to pass through parliament, could however spell the end of the government alliance between center-left parties (Democratic Party / PD and Italia Viva / IV) and the 5 Star Movement (M5S, anti-system).

The boss of Italia Viva, the former Prime Minister Matteo Renzi, had undertaken not to torpedo the adoption of the plan, and thus not to delay the arrival of European funds. But he had set conditions on its content, which he considers unsatisfied and therefore threatens to leave the government the two ministers of his small party.

“We will make a decision tomorrow morning [mercredi]and tomorrow afternoon we will announce it in a completely free way at a press conference “set at 4.30 pm GMT,” Renzi said on the RAI3 television channel on Tuesday evening.

IV’s two ministers, Teresa Bellanova (agriculture) and Elena Bonetti (family) abstained in the vote on the stimulus plan.

“There is no longer a majority,” the big daily La Repubblica was to headline on Wednesday.

Mr. Renzi accuses the chief executive, Giuseppe Conte (independent), of having arbitrated to the detriment of investment and structural reforms. He also demanded that the country appeal to the European Stability Mechanism (ESM), a device whose purpose is to help countries in the euro area in difficulty.

He lambasted “a government that wastes money from [ses] children “.

Giuseppe Conte has yet agreed to review his copy. It more than doubled the funds allocated to health and raised the share of investments, which now stands at 70%, against 21% for tax incentives and other bonuses.

“The MES is missing”, hammered Mr. Renzi.

“Poker game”

Several options are now on the table: resignation of the two ministers of Italia Viva, reshuffle or a new prime minister.

Without the support of Italia Viva’s 18 elected members of the Senate, Giuseppe Conte would lose his majority of 166 seats out of 315 and Italy would then have to return to the polls.

A catastrophic scenario for Mr. Conte who is not however favored by the experts.

Because neither Italia Viva, credited with 3% of the voting intentions in the polls, nor the other members of the coalition have any interest in scuttling themselves, the right-wing and far-right opposition being assured of winning early legislative elections.

“Tale is over. The right is ready,” said the leader of the Lega (far right), Matteo Salvini, on Tuesday evening, in ambush.

Towards a reshuffle

Giuseppe Conte judges that it will be “impossible for him to remake a new executive with the support of IV” in the event of the withdrawal of his ministers, according to a source. But he will not necessarily have the choice of weapons.

A reshuffle, with a rise in the power of ministers appointed by Italia Viva, is considered the most likely way out of the crisis. However, it depends on the will of MM. Conte and Renzi overcome their differences.

Several big names in the majority have called on party leaders to be responsible as Italy, which has deplored nearly 80,000 deaths since the start of the Covid-19 pandemic, is mobilizing to accelerate its mass vaccination program.

“In the midst of a pandemic, a crisis would be truly incomprehensible and dangerous,” thundered the Minister of the Economy (PD), Roberto Gualtieri.

The first beneficiary of the 750 billion euros mega-plan adopted in the summer of 2020 by European leaders, Italy is eagerly awaited on its projects which it must submit to Brussels by the end of April, like the other countries awaiting funds.

Italy is causing concern as the country has been accused in the past of misusing EU funds.

“Italy will have a decisive role in the success or failure” of this first experience of common debt of the European Union, had warned in August the European Commissioner for the Economy, and former head of government Italian, Paolo Gentiloni.

And the stimulus plan risks adding to Rome’s colossal debt, which is expected to reach 158% of GDP, the second highest ratio in the eurozone behind Athens.

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