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Paolo Pizzoli, senior economist at ING, points out that points out that in Italy, the centre-left Democratic Party and 5SM agreed to build a new government coalition led, again, by Giuseppe Conte, the outgoing prime minister.

Key Quotes

“Unlike in Spring 2018, it will be Conte himself managing the division of power between the two stakeholders and will try and strike a balance for a common programme.”

“President Mattarella will now give PM Conte a few days to work on the government programme and submit the proposed list of ministers. The new government will then have to undergo confidence votes in both branches of the parliament within ten days.”

“The solution to the government crisis built on a common incentive for the 5SM and the PD party to avoid a snap election. The genesis of the 5SM/PD new coalition shows that this was contemplated on the PD front only under the assumption that the new government would aim at completing the legislature (which will end in March 2023). Incidentally, this time horizon would encompass the all-important election of the new Italian president in February 2022 when Mattarella’s mandate ends.”