Italy's PM resigns, raising concerns that politics will hinder Covid recovery

Italy's President Sergio Mattarella is starting talks with political parties Wednesday to form a new government after the resignation of Prime Minister Giuseppe Conte on Tuesday. The government collapsed after a key partner to the centre-left coalition pulled support for Conte's handling of the Coivid-19 pandemic.

“The widespread suffering of citizens, deep social hardship and economic difficulties require a clear perspective and a government that has a larger and more secure majority,” wrote Conte on his Facebook page.

He hopes to form a third government with a strengthened majority, which is "loyal to European ideals".

For weeks Conte and former Prime Minister Matteo Renzi, whose Italia Viva party was a key partner in the coalition that has ruled Italy since September 2019, have had disagreements over how the government has handled the Covid pandemic.

Renzi criticised how Conte was going to spend over 200 billion euros of European Union recovery funds, saying that he was wasting an opportunity to address some of Italy's long-term structural problems.

Italia Viva withdrew from the coalition earlier this month, and though Conte won confidence votes in parliament last week, he fell short of an absolute majority in the Senate.

Politics in the way of Covid recovery

The ratings agency Fitch said in a statement that the political crisis could hinder Italy's ability to relaunch its economy, and “could also increase the risk of delays in disbursing" the recovery funds.

Italy was the first European country to face the full force of the pandemic, and parts of the country remain under partial lockdown. The economy has entered a recession.

Foreign Minister Luigi Di Maio, one of the leaders of the populist Five Star Movement (M5S), the largest group in parliament, urged lawmakers to get behind Conte, saying: "It is the moment of truth, in these hours we will know who defends and loves our nation and who only thinks of their own benefit."

Conte now has to convince Mattarella that he can form another government, something the M5S and the other partners in the coalition—the Democratic Party (PD) and the LeU (Free and Equal) party—are hoping for.

 Mattarella can also mandate a new prime minister to try to form a government from the same parties, appoint a technical government to steer the country through the pandemic, or dissolve parliament and call an early election.

All the ruling parties want to avoid snap elections, as the centre-right opposition, including former premier Silvio Berlusconi's Forza Italia and Matteo Salvini's far-right League party, would probably win.

Salvini says that Conte is incapable of leading Italy through the crisis.

“Let's use these weeks to give the word back to the people and we'll have five years of a serious and legitimate parliament and government not chosen in palaces but chosen by Italians,” he said Monday.

(with agencies)