Prime Minister Giuseppe Conte wins Senate vote and leads minority government

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Italian Prime Minister Giuseppe Conte is seen after addressing the senators.

ANDREAS SOLARO | AFP | Getty Images

LONDON – Italy averted further political chaos on Tuesday after Prime Minister Giuseppe Conte survived a vote of confidence in the Upper House of Parliament.

The country had been embroiled in new political uncertainties last week after a smaller party withdrew its support for the coalition government and lost a majority in parliament.

However, the Italian legislature in the Senate supported Conte in a vote on Tuesday with 156 to 140 votes, which allowed him to stay in office. In a vote on Monday evening, he was also supported by the lower house of parliament. Conte will now lead a minority administration in a country prone to political disputes.

Italia Viva, the small political party founded by former Prime Minister Matteo Renzi, left the coalition last week over differences over how upcoming EU funds should be invested to prop up the Italian economy.

Renzi has been accused of acting in his own political interest by trying to raise public opinion for his newly formed group. His party abstained from the decisive vote on Tuesday evening instead of going against Conte and helping to overthrow the government.

One of the biggest challenges for today’s minority government, along with the raging coronavirus pandemic, will be saving the Italian economy, where GDP (gross domestic product) is expected to have dropped 10% in 2020.

The coalition made up of the Five Star Movement and the Democratic Party, two EU pro-parties, has to submit a replenishment plan to Brussels for approval by mid-February.

On Monday evening, Paolo Gentiloni, EU economic commissioner who will be reviewing recovery plans, said fiscal “imbalances are in danger of deepening”.

The eurozone had worked to reduce government deficits and borrowing prior to the pandemic, and there are concerns that the post-pandemic fiscal position will deteriorate significantly if the upcoming incentives are not well invested.

Happy for the third time?

This is not the first time Conte has survived internal divisions within his government. The former law professor with no political affiliation was the compromise candidate who was appointed prime minister in June 2018 when the five-star movement and anti-immigration party Lega formed a coalition.

In the summer of 2019, however, Lega initiated a vote of no confidence in the coalition government, but saw itself replaced in the administration by the Democratic Party and what would then become Italia Viva.

Conte has remained in power for a little over a year, but with his third government formation.

The bond market has shown some concerns over the past week as the recent political dispute in Italy has resulted in 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 sovereign debt and the European Commission will soon distribute new funds.