As the Italian presidential election approaches, Draghi becomes the focus

Italian Prime Minister Mario Draghi attended the year-end press conference.

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As the upcoming presidential election threatened last year’s political stability, Italy has regained the focus of many investors.

Two weeks later, as Sergio Mattarella’s term ends on February 3, the country’s legislators and regional representatives will decide who should become the next president. The country’s more than 1,000 parliament and regional representatives will begin voting on January 12. twenty four.

Why does this matter?

The main question is whether Mario DraghiThe current prime minister of the country will be elected as the new president.

About a year ago, Draghi, the former president of the European Central Bank, was appointed as a national politician, ending several years of political turmoil in the country. The 10-year Italian government bond yield fell shortly thereafter to its lowest level in 2021 News that Draghi may become the new prime minister.

his governmentIt is mainly composed of politicians and some technocrats from different political parties, and it has calmed the market due to its parliamentary support and reform plans.

However, Draghi may leave the government, posing risks to this economic and political stability.

Concerns about economic and political stability

The payment of funds is related to the implementation of previously promised reforms. Experts believe that these two aspects are critical to nurturing the Italian economy that has been struggling for years.

Wolfango Piccoli, co-president of consulting firm Teneo, also pointed out that if Draghi becomes president, economic recovery will face short-term risks.

“Regardless of whether Draghi is elected president or not, Italy is unlikely to hold parliamentary elections a year in advance. However, the appointment process of the new prime minister and the new government is likely to be noisy, and the current heterogeneous ruling coalition may undergo partial reconfiguration.” He said in a report on Wednesday.

The current parliamentary term will expire in 2023. If there is no early election during this period, Italians will go to the polling station to choose a new parliament and government.

Draghi said at the year-end press conference that he could serve as the country’s president.

“what is inside [it] For Mario Draghi, he will be able to ensure Italy’s mid- to long-term stability,” Berenberg economist Guido Bodratto told CNBC’s “European Street Sign” on Thursday.

“He also wants to push political parties to take responsibility [for] Government Action. “

How will it work?

The tradition of those interested in becoming the president of Italy is to express their willingness, but will not formally announce that they will stand for election.

Other potential candidates include: former Prime Minister Silvio Berlusconi, who was temporarily banned from holding public office after being convicted of tax fraud in 2012; Giuliano Amato, who served as prime minister twice; Judiciary Minister Marta Catabia; former Speaker of the House of Commons Pierre Ferdinando Cassini; and Economic Commissioner and former Prime Minister Paul Gentiloni.

“The’grand elector’ body that will be elected [the] The next president currently consists of 1,007 members (58 regional representatives are still to be appointed, and 949 legislators),” said Piccoli of Teneo, but due to the upcoming by-election, the final number may reach 1,008.

In the first three rounds of voting, a two-thirds majority is required to elect a new president. After that, a simple majority is enough to choose a new head of state, Piccoli emphasized.

Due to the restrictions of the pandemic, the “big electors” may go through a long process, and it is estimated that voting will take 6 hours.

“Intense political manipulation behind closed doors is a characteristic of presidential elections because the entire process is managed by political parties. Past experience has also shown that in the case of no clear candidates in the first round of voting, the dynamics of the voting itself often revolve around names. New alliances or consensus, in principle, these names can only be regarded as secondary options at best,” Piccoli added.