By Gavin Jones

ROME, (Reuters) – After the election of a new head-of-state this week, Italian Prime Minister Mario Draghi will likely have trouble controlling his coalition. Analysts and politicians warn that relations among and within the ruling parties are worsening.

Sergio Mattarella (80 years old) was reelected as President for the second time on Saturday. His party chiefs requested that he continue his work after seven unsuccessful rounds of voting in parliament.

Elections in the third-largest economy of the euro area are just over a year away. Draghi will now have to guide his government through some difficult decisions.

The parties within his coalition are pressuring him to increase borrowing in order to reduce the effect of rising energy prices on households and firms. Meanwhile, the parties disagree over the contentious reform to the pension system.

Italy pledged that to Brussels, it would approve around 100 measures in return of approximately 200 billion Euros ($223 trillion) of pandemic relief funds. It is crucial that Italy’s Recovery Plan succeeds in order to be eligible for future EU joint borrowing.

The coronavirus epidemic continues to elude us, with Italy suffering hundreds of deaths each day.

Although Draghi wanted to be president, he was blocked by two major parties within the coalition. He also received little support from rank-and-file lawmakers.

The continuation of the status-quo is likely to be welcomed by financial markets as a sign that stability has been restored, but deep scarring from the week of chaos have left.

Francesco Galietti (head of Policy Sonar’s political risk advisory Policy Sonar) stated that “Mattarella’s win belies fact that many of Italy’s parties are in tatters.”

“We must understand if the main ingredient in Draghi’s government, a broad, cross partisan majority, will still exist in a few days. Otherwise, the situation quickly becomes untenable.”

Draghi is part of a coalition that includes both the center-left and right-leaning parties. The League, once anti-establishment 5-Star Movement and several other smaller parties are also included in Draghi’s coalition.

These groups were bitterly divided in the presidential election, with Draghi’s candidacy being supported by the Democratic Party (PD), and Draghi’s campaign being opposed by the League and 5-Star.

Teneo’s advisory group published a report titled “Mattarella 2: A misleading semblance to stability” on Saturday.

INTERNATIONAL SPLITS

We will continue to watch how Draghi reacts to the chaos. Some politicians believe that Draghi will be reinforced as the commander of the coalition, even though the other parties are distracted by internal turmoil.

Enrico Letta of the PD, a strong supporter Draghi, stated that “I think government comes out from all this strengthened.” I think each party will have less interest in claiming its own territory or digging its feet into others’.

Ettore Rosto, a centralist Italia Viva member, agreed with this viewpoint. She told Reuters Draghi Draghi could count Mattarella’s continued support, and was pleased that all ruling parties voted for Mattarella.

The voting revealed many internal divisions in the parties. With jockeying for positions ahead of the election, early indications for stability were not encouraging.

Many League legislators were dissatisfied with Matteo Salvini’s constant changes in candidate, and his decision to support Mattarella.

Giancarlo Giorgetti, the League’s Industry Minister, told reporters Saturday that he had considered resigning but then backedtracked later in day.

Giorgio Mule from Forza Italia, a junior defense minister said that “the League’s internal tensions would all be vented upon the government.”

Right of the political spectrum was the destruction of the unity of a Conservative Alliance of Parties. Salvini repeated his anger at Forza Italia, Draghi’s traditional partner, and repeatedly criticized Draghi for the way he handled it.

Tensions in the 5-Star Movement are boiling over. Conte is accused of swapping blows with Luigi Di Maio who is a foreign minister but a former leader.

Pier Ferdinando Casini was an old centrist politician who said that after the conflict, political relations were “destroyed” and that there was now no question that the government had been weakened.

Corriere dilla Sera said that although he hopes that parties will increase their support for Draghi now, “I have not just landed on the Moon, and this is in the last year before the elections,” he stated.

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