He said he would only return if Mr Conte accepted a list of demands. Mr Conte then won a vote of confidence in the lower house, the Chamber of Deputies, but he then scraped through a Senate vote without an absolute majority.
He said he hoped his resignation would result in the creation of a stronger coalition government. He had previously led two very different, successive coalition governments from For 15 months he headed a coalition between M5S and the far-right League, until its leader Matteo Salvini pulled out in a failed bid to force elections. Mr Renzi said there was now a good opportunity for Italy to find a new direction.
Italian PM resigns in split over Covid response. Italy political crisis erupts over Covid spending. Image source, Reuters. Mario Draghi R has agreed to put forward a new administration in the hope of fixing a fractured parliament. What has Draghi said? We have the extraordinary resources of the EU at our disposal, we have the opportunity to operate with a careful eye on future generations.
But if politics in Italy seems particularly messy this time around it's because of a recent change in the electoral law — one that restored elements of the nearly pure proportional system that was in place from the end of World War II until It's a system that worked arguably well until the early s, as Italy moved from a backward, agricultural country to an industrial powerhouse. But after an initial grace period, its dominant characteristic was an extreme form of political bargaining.
Post-war governments were famously short-lived: they lasted, on average, eight months. The old joke was: You go to London to see the changing of the guard; you go to Rome to see the changing of the government.
Why did governments change so quickly? Not because of great ideological disputes or passionate debates over public policies. They fell because they relied on the support of complex mosaics of political parties and relevant supporting interests, all of which had to be rewarded to remain part of the coalition. In Italy, governments are chosen by the parliament, not directly elected by voters.
That allows the various political forces in the two chambers to swap out the executive — and redistribute the goodies — without giving up their own jobs.
And indeed, while the lifespan of governments was short, parliaments often survived for close to their full terms. Things changed in , when Italy moved to a new way of electing parliaments, with some elements resembling the British first-past-the-post system.
This allowed a flamboyant politician like Silvio Berlusconi to move the country closer to a majoritarian system, in which Italians felt they were voting for a government leader of their choosing. Italian politics remained exciting. But the system was arguably more stable, with Berlusconi in particular dominating the political stage. However, the long-term viability of this partnership remains unclear. Prime Minister Giuseppe Conte was compelled to resign on August 20th, ending the fourteen-month alliance between far-right Lega and far-left Five-Star movement M5.
He was hopeful of sparking snap elections, utilising his popularity, and gaining an outright majority in Parliament. However, the Five-Star Movement to avoid fresh elections entered negotiations with the centre-left Democratic Party PD to form a new coalition government. This partnership was considered unlikely since M5 had risen to prominence based on its anti-establishment rhetoric. The counterfactual scenario of an election and a potential Lega majority government with Salvini at the helm would have had different economic implications.
The Democratic Party has traditionally maintained a pro-EU stance and will be more respectful of governmental constraints.
While the formation of this new left-wing coalition government is likely to boost investor sentiment in the lead up to the annual budget, the medium to long-term prospects for the Italian economy remains unclear. This is primarily because it is unlikely that this coalition government will survive until the next elections in The PD and M5 may have put aside their differences for now, but deep-seated tensions between the two parties remain.
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