News Analysis: Italy's Conte gov't facing hard part after confidence votes

Source: Xinhua| 2021-01-21 07:55:05|Editor: huaxia

ROME, Jan. 20 (Xinhua) -- Italian Prime Minister Giuseppe Conte survived two narrow confidence votes this week that could have forced him to resign. Now the hard part begins, according to analysts.

Struggling to contain the coronavirus pandemic and pep up the country's slow-growing economy, Conte's government last week faced a near-lethal blow when former Prime Minister Matteo Renzi pulled out. That left the government with less than a majority in the 321-seat Senate.

Late Tuesday, Conte's allies were able to cobble together enough support to keep the government from collapsing. But his majority will be smaller and less secure than it had been.

The pandemic continues to impact nearly all aspects of Italian life. On Wednesday, there were more than 13,500 new coronavirus infections and 524 new deaths from the virus, pushing the totals since the start of the pandemic to more than 2.4 million and nearly 84,000, respectively -- both among the highest national totals in the world.

The economy is also a problem area. Final 2020 gross domestic product (GDP) growth figures are not yet available, but the consensus among economists, investment banks, and multilateral institutions is that the economy will contract by 9 to 10 percent for the full year.

But analysts said changes in policy when it comes to these two areas -- the coronavirus and the economy -- are unlikely.

"I don't think we're going to see a strong change in policy in terms of the pandemic or economics from this new phase of the Conte government," Francesco Daveri, a professor of macroeconomics at the SDA Bocconi University School of Management, told Xinhua. "But the government will have a smaller margin for error in implementing these policies."

Daveri continued: "I think what we will see in the coming weeks and months is a case of muddling through the challenges that arise."

Giacomo Bandini, director-general of Competere, a think tank, said Conte's government will likely have to stay away from potentially polarizing policy initiatives since he cannot afford to lose allies and in many cases, he might need to persuade some opposition lawmakers to support his cause.

"The one thing that is clear to anyone who sympathizes with Conte is that they want to avoid calling new elections at all costs," Bandini said in an interview with Xinhua. "There are too many challenges to holding elections during a pandemic, and polls show that opposition parties would likely take over if there was a new election."

Other challenges facing the government: the debate on how to most effectively spend the 222 billion euros (269 billion U.S. dollars) in grants and low-interest loans that make up the European Union recovery fund, and Italy's role as the head of the Group of Twenty (G20) this year.

Still, despite the potential pitfalls it faces, the Conte government's survival of the risky confidence vote was welcomed across Europe and also by investors, who sent the broad blue-chip index on the Italian Stock Exchange in Milan nearly 1-percent higher in heavy trading on an otherwise uneven day for European markets. Enditem

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