The government crisis and the now probable farewell of Mario Draghi at Palazzo Chigi, despite the temporary refusal of President Mattarella and the last minute attempts of some parties, put Italy's future at risk. Many the dossiers on the table that are in danger of blocking in a very delicate moment in which, between war, inflation and Covid, the country would need an authoritative executive capable of working tirelessly and in full force.
And instead, the position taken by the 5 Star Movement and the consequent resignation of Draghi risk having the opposite effect, with the specter of recession becoming more threatening day by day.
Gas, Pnrr, Competition law, tax wedge cut, tax reform these are just some (the most important) of the issues on which the current government was working and which are now in danger of getting bogged down in the maze of a crisis that is primarily hurting the country.
Gas: race against time to fill stocks and diversify supplies
The gas agenda, an agenda that has entered a phase of crucial emergency, is particularly damaged by the political crisis triggered by the M5S. The appointment of Mario Draghi and Luigi Di Maio, Monday and Tuesday in Algiers to seal the agreement signed in April with President Tebboune, is in fact of the utmost importance for Italy. The crisis triggered by the Russia-Ukraine war forces us to quickly make ourselves independent of Gazprom. As? First, by diversifying your supply. And it is legitimate to ask how can lCEO of Eni Claudio Descalzi – which has launched itself forcefully into the operational realization of this diversification – to proceed without having its back covered by an incumbent and determined government. So far the Draghi-Descalzi tandem has achieved excellent results: imports from Russia have dropped from 40% to 25%, gas storage reached 65% of capacity, there was no impact on the electricity system. But you have to get to 90% before winter and it's a race against time.
An additional 9 billion cubic meters must arrive from Algeria by 2023, Monday's appointment is essential. But now what will happen? The government, supported by Eni, is pursuing talks for additional volumes of gas from Qatar, Egypt, Mozambique, Azerbaijan. The hypothesis that Gazprom will shut off the taps definitively after July 21 remains in the background: rationing and containment measures are to be considered probable. Finally, in Europe Draghi had supported the need for a cap on gas prices: Now Putin can breathe a sigh of relief.
Pnrr: two fundamental deadlines at risk
The international authority and credibility enjoyed by Premier Draghi to date has allowed Italy to pass the various tests relating to the objectives of the National Recovery and Resilience Plan. Without him, the road gets rougher. In this context, Italy will have to overcome two important steps. The first is the assessment that the EU commission will carry out on goals achieved as of 30 June. The disbursement of the new 21 billion euro installment will depend on the result. Once this important step has been passed, an even more demanding phase will open, that relating to year-end deadlines that Italy will have to respect despite the government crisis and the possible elections in the autumn. The objectives of the Pnrr will be carried forward by the administrative machinery which, however, without a government behind it, could proceed slowly.
Cutting the tax wedge
Directly on the pockets of citizens will affect the probable stop to cut the tax wedge on which the Government had been working for months together with companies and social partners. The goal was to fit the measure into the next one Budget law to give workers and retirees grappling with inflation a short-term answer. The reduction of taxes on labor was considered a priority by the Draghi government, which intended to allocate resources of at least 4-5 billion to be allocated to cutting the wedge for incomes below 35 thousand euros. But without an executive in office, the provision seems destined to run aground and, even if the elections succeed in giving Italy a new government by the autumn, it is unlikely that whoever takes office in Palazzo Chigi will have the necessary time to work on a measure of such scope.
The Competition Law and taxis
Also at risk is the fate of the Competition Law Draft, which is essential to carry forward the reforms requested by Brussels within the Pnrr. A new meeting of the Productive Activities commission should have been held on Monday in the Chamber which should have closed the measure. After the lack of confidence of the M5S in the Senate and the resignation of Draghi, the session has not even been convened and even if the conference of group leaders were to confirm the arrival of the text in the Chamber, the commission would not vote on the amendments without the positive opinion of the Government. First of all the now famous Article 10 which led to taxi drivers setting fire to streets and calling unauthorized strikes to put pressure on lawmakers. The danger is therefore that of facing not only the removal of the article which would keep the current status quo intact without any change, but also the total blocking of the provision if the president Sergio Mattarella dissolves the Chambers before the go-ahead.
Tax reform
The long-awaited tax reform containing the rules on the cadastre, but also the cut of the Irpef, the overcoming of the Irap and the fiscal cashback could also end up in the attic. After months of controversy and mediation, Palazzo Chigi had managed to "lock down" the text, ensuring passage without changes in the Senate in order to give the definitive go-ahead for the provision by the summer. With Draghi's farewell, everything could be postponed to a later date.
