Former European bank boss Draghi set to be Italy’s new PM

With almost all the political parties behind him, Mario Draghi on Friday entered the final straight in his bid to form a new government to lead Italy through the coronavirus pandemic.

The former European Central Bank chief, called in after the outgoing centre-left coalition collapsed, could visit President Sergio Mattarella as early as Friday to be officially named prime minister.

Draghi has spent the last nine days assembling a government of national unity to manage the deadly pandemic that hit Italy almost exactly one year ago, triggering a deep recession.

After securing the support late Thursday of the last key player, the populist Five Star Movement (M5S), Draghi has almost all the main parties on board, from leftists to the far-right League.

"The Draghi government is born," headlined Rome-based daily Il Messaggero, while the Corriere Della Sera added: "Draghi in the home stretch."

However, the 73-year-old economist has shown he is willing to take his time, and could yet take a few more days to finalise his cabinet.

Italy has high hopes for Draghi, dubbed Super Mario after vowing to do "whatever it takes" to save the euro single currency in the 2010s debt crisis.

Mattarella asked him to step in on February 3 after outgoing premier Giuseppe Conte resigned following weeks of political turmoil in his M5S-led coalition.

The president emphasised the urgency of moving quickly to fill the political vacuum as Italy approaches the grim milestone of 100,000 deaths and battles the worst recession since World War II.

Italy is hoping to receive more than 200 billion euros ($243 billion) in grants and loans from the European Union's recovery fund to help it get back on its feet.

But Draghi will have to balance demands for immediate hand-outs against the need for long-term structural reforms in Italy — tensions that brought down the last government.

Broad support

Leaders of M5S, the biggest party in parliament, had indicated early on that they would support Draghi's efforts to form a broad-based new government — but the membership was divided.

An online vote on whether to take part was delayed earlier this week when M5S founder Beppe Grillo asked Draghi for more details on action he would take on the environment.

The vote was rescheduled for Thursday after the party claimed it had been promised a beefed-up minister "for ecological transition" — and members voted by 59.3 percent to back Draghi.

The economist would have probably been able to form a government even without the M5S, but "it is important for him to set off with the broadest possible parliamentary majority", noted Federico Santi, an analyst at Eurasia Group.

Italy has been without a fully functioning government for almost a month since former prime minister Matteo Renzi withdrew his Italia Viva party from Conte's coalition, which also included the M5S and centre-left Democratic Party (PD).

Conte eventually resigned on January 26. Mattarella gave the M5S, the PD and Renzi time to patch things up, but when that failed, called in Draghi.

Draghi's arrival was greeted with delight on the financial markets — Italy's borrowing costs dropped to a historic low this week — but the task facing him is huge.

The EU is expecting a plan on how to spend the recovery funds in April, while unemployment — at 426,000 higher than one year ago — risks rising further later this year, if an existing freeze on job dismissals is not extended.

Another priority is speeding up Italy's coronavirus vaccination programme, which made a promising start in December but has since slowed, against a backdrop of rising concern about the spread of new variants.