Italian Prime Minister Giuseppe Conte is seen addressing the senators.
ANDREAS SOLARO | AFP | Getty Images
London – Italy rose to political chaos on Tuesday after surviving a vote of confidence in the upper house of parliament.
After withdrawing its support for the coalition government, the country was embroiled in new political uncertainty for the past one week – thus separating it from having a majority in Parliament.
However, Italian lawmakers in the Senate supported Conte during a vote on Tuesday, 156 to 140, allowing him to continue in office. The lower house of parliament also supported him in a vote on Monday evening. Conte will now lead a minority administration in a country with political controversy.
Italia Chirayu, the small political party founded by former Prime Minister Mateo Renzi, gave up on the coalition last week on how to invest the upcoming EU fund to further the Italian economy.
Renji is blamed for acting in his own political interest to promote public opinion for his newly-founded group. His party removed him from the crucial vote on Tuesday evening instead of going against Conte and helping bring the government down.
One of the main challenges for the now-minority government, aside from the raging coronovirus epidemic, will be to save the Italian economy, where GDP (GDP) is expected to fall by 10% in 2020.
The Five Star Movement and the Democratic Party, a coalition formed by the two pro-EU parties, must submit a recovery plan for Brussels by mid-February for approval.
Speaking on Monday evening, Paolo Gentiloni, the European Commissioner for Economic Affairs and who will be assessing the recovery plans, said the fiscal imbalance is in danger of deepening.
The euro zone worked to reduce public deficits and borrowing levels before the epidemic and there are concerns that the fiscal situation will be much worse after the epidemic if the ensuing stimulus is not well invested.
Lucky for the third time?
This is not the first time that Conte has survived internal divisions within his government. The former law professor with no political affiliation was the compromise candidate appointed as prime minister in June 2018, when the Five Star Movement and the anti-immigration party Lega formed a coalition.
However, in the summer of 2019, Lega cast a no-confidence vote on the coalition government, but was transformed into administration by the Democratic Party, and then became Italia Viva.
After more than a year, Conte remains in power, but with the third formation of his government.
The bond market has shown some concerns with the latest political controversy in Italy over the past week, leading to slightly higher yields.
However, the market reaction lies to some extent due to the broader European context, where the European Central Bank keeps buying large amounts of government debt and the European Commission will soon distribute new funds.