Mario Draghi’s moment of truth

ROME — It’s crunch time for Mario Draghi.

After a rollercoaster few days — in which the 5Star Movement, a member of the coalition government that Draghi heads, boycotted a critical confidence vote, leading to Draghi offering to quit (and President Sergio Mattarella refusing to accept his resignation) — the Italian prime minister is scheduled to appear before lawmakers on Wednesday and Thursday to confirm whether he still has a majority in parliament.

There are two likely outcomes: Draghi says he can still govern and carries on as prime minister, or admits that he can’t and walks away after 17 months in the job, which would lead to an early election in the fall.

There’s a lot at stake. Over the next five months, the government needs to finalize several politically fraught reforms, including on competition and justice, in order to receive the next tranche of EU post-pandemic funds, worth €20 billion. The government also needs to prepare and pass a budget law to address the skyrocketing cost of living and an unprecedented energy crisis, exacerbated by the conflict in Ukraine.

And the impact of a Draghi exit would be felt further afield. Following Angela Merkel’s retirement as German chancellor, Draghi has become one of Europe’s most authoritative leaders. His early departure could be a setback for plans for further EU integration, and stall reforms of the eurozone’s fiscal rules.

Draghi’s “Europeanism” contributed to the joint purchase of coronavirus vaccines and the approval of the EU Digital Covid Certificate, Spanish Prime Minister Pedro Sánchez wrote in an op-ed for POLITICO. “Mario’s ideas in recent months have been key in our debates” on how to face new challenges caused by Russian President Vladimir Putin’s war on Ukraine, Sánchez wrote, adding that Italy and Spain “have led the way.”

Draghi’s outsized role in the West’s firm stance against Russia and strident support for Ukraine would also be missed by many if he departs. Draghi had a call with Volodymyr Zelenskyy on Tuesday, assuring the Ukrainian president of Italy’s “solidarity and support.” But Foreign Minister Luigi Di Maio — who quit the 5Stars over its stance on sending arms to Ukraine — has warned that the support Italy can offer may be severely limited for months if Draghi resigns and the government moves into a caretaker role.

Draghi’s two big days start on Wednesday at 9:30 a.m., when he is due to give a speech in the Senate, the upper house of parliament. That will be followed by a debate, with Draghi given a final right of reply. At 6:30 p.m., Senate lawmakers will vote on whether they still have confidence in the prime minister.

On Thursday, it’s a repeat performance in the Chamber of Deputies, with a 9 a.m. speech by Draghi, then a debate and a vote at 2 p.m., with a result expected at 3:15 p.m.

There have been increasing calls for Draghi to stay on as the votes get closer, with pro-Draghi demonstrations in several Italian cities on Monday. Draghi held talks with both Democratic Party chief Enrico Letta and right-wing leaders on Tuesday, suggesting he may be open to staying on if he can secure enough support. But that may not be possible.

The 5Star Movement is likely to withdraw its backing if Draghi does not accommodate several of its requests, including a minimum wage — and the right-wing parties in the coalition have said they are no longer willing to govern with the 5Stars. “The political backdrop over the past few days has tilted even more towards a collapse of the government,” said Wolfango Piccoli of analysts Teneo.

If Draghi knows he does not have a majority or believes his government can no longer be effective he could skip the vote on Thursday altogether and go straight to Mattarella and resign.

If that happens, the president could in theory hold consultations to see if another majority can be found with Draghi at the helm, but it is more likely that he would dissolve parliament and call an election as soon as possible, to give a new government time to pass the budget law by the end of the year.

A poll by Euromedia Research, published in La Stampa, suggested that fewer than one in three Italians favor an early election, while more than half want the government to continue.

Ratings agency Fitch warned that even if Draghi’s resignation can be avoided, Italy is entering a period of instability in which structural reform and fiscal consolidation are “likely to become more challenging.”