White Smoke In Rome: Italy Reelects President Mattarella In 8th Round Of Voting, Averting Political Chaos

After seven inconclusive rounds of voting, the Italian Parliament met on Saturday afternoon and re-elected President Mattarella with 770 votes, averting the political chaos a failure to elect his successor could have sparked in the eurozone’s third-largest economy.

An interim official count in Saturday’s ballot put the 80-year-old president over the top. It followed a deal between Draghi and Italy’s main parties to back Mattarella. The agreement between the two main coalitions to extend the tenure of the incumbent ensures the survival of Draghi’s fragile government for now. This was the sixth slowest election process in Italian Presidential history.

According to Bloomberg, Mattarella had said he was keen to retire, going so far as to rent a new apartment in Rome. In the end, it was Draghi who asked Mattarella to remain in office on Saturday, breaking the stalemate. All parties backed the incumbent except Giorgia Meloni’s far-right Brothers of Italy.

Members of parliament broke into applause as the 80-year-old, whose first term of office ends on February 3, received the necessary votes for a second seven-year term, in the eighth round of a ballot that has bitterly divided the national unity government in Rome. 

After several back-and-forths, vote outcomes showing a very limited adherence to party discipline and, finally, an attempt by the centre-right to break the stalemate by putting forward their own candidate, this morning the majority of the centre-right coalition (Lega, Forza Italia (FI)), the centre-left coalition (5Star, PD and LU) and the centrists Coraggio Italia (CI) and Italia Viva all agreed to vote for the incumbent President Mattarella. Throughout the process, President Mattarella received the larger number of votes in every single round of voting but one.

Draghi was initially seen as a top contender for the job and made it clear he would be keen to become head of state. The former ECB president was thwarted by lawmakers in his own unity government who feared a return to political turmoil without Draghi at the helm.
The outcome could provide relief to investors as it reduces the chances of early elections and will let Draghi press ahead with his reform agenda until the next election, due in 2023.

Mattarella had tapped Draghi to lead the government amid political chaos at the start of the Covid pandemic. Parties across the ideological spectrum agreed to suspend their political jockeying and back Draghi.

Since his appointment last February, Draghi, 74, has held Italy’s querulous parties together, embarked on a series of economic and administrative reforms, led an aggressive vaccination push and secured 200 billion euros ($223 billion) in European Union Covid recovery funds.

His challenge now is to inject fresh energy into his administration, which appeared to lose steam in the weeks before the vote. Still, staying on will give Draghi more say over policy than if he had shifted to the presidency.

The Italian president has limited powers and the role is ceremonial most of the time. Yet, no one gets to be premier without the president’s approval — they nominate heads of government and their chosen ministers. The president also holds the power to dissolve parliament, which means they can act as a force of stability in crises.

During his seven-year mandate, Mattarella has appointed four different governments and become a symbol of continuity and stability. He addressed the nation several times during the worst months of the pandemic, even showing he did not get an haircut during the lockdown months, like most Italians.

The good news for markets is that we have a continuation of the status quo, one which sets up former Goldman bankers and ECB head Mario Draghi to remain as prime minister, and as Goldman’s Filippo Taddei writes, “the current outcome is the most market friendly for Italian macro risk in 2022 and beyond.”