Draghi Demands Italian Unity As Price For Staying On As PM

Italian Prime Minister Mario Draghi on Wednesday demanded unity among his coalition partners if they wanted him to stay in office, leaving his resignation threat hanging over parliament.

Draghi set out a series of issues facing Italy ranging from the war in Ukraine to social inequality and rising prices, and said political parties needed to get behind him if he was to steer the country to elections due in the first half of 2023.

"Are the parties and you parliamentarians ready to rebuild this pact?" Draghi said in an uncompromising speech to the upper house, adding that was what Italians were demanding.

Senators from the populist 5-Star Movement, which triggered the crisis last week after refusing to support the government in a confidence vote, did not clap at the end of the speech -- nor did many members of the rightist League party.

Draghi tendered his resignation last week after 5-Star walk out, but President Sergio Mattarella turned him down and told him to go back before parliament to see if he could revive the 18-month-old administration.

Senators will discuss Draghi's speech for several hours and the result of a vote on his speech was expected by 7:30 p.m. (1730 GMT). A debate on the government's future is also expected to take place at the lower house on Thursday.

The former European Central Bank chief has enough backing to remain in office without 5-Star, but he has so far rejected that option because his original mandate was to lead a national unity coalition with parties from across the political spectrum.

Complicating efforts to overcome the divisions, the League and its Forza Italia allies have said they do not want to share power with 5-Star anymore.

AUTUMN ELECTIONS

If Draghi decides the government can no longer continue, the president is likely to call elections in September or October. Italy has not had an autumn election since World War Two as that is the period normally reserved for drawing up the budget.

Draghi addressed core concerns of the 5-Star, saying it was important to tackle growing social inequality and pledging that the government would move towards introducing a minimum salary.

He also indicated that he would act on some of the League's policy priorities, such as cutting taxes and giving greater autonomy to the regions. But he also said the country needed to take potentially unpopular measures, such as boosting competition, that might run counter to various lobby groups.

"Italy does not need a veneer of trust, which vanishes in front of inconvenient measures. It needs a new pact of trust, sincere and concrete," he told coalition partners.

It was far from clear whether 5-Star would rally behind his appeal. It was also not clear if Draghi was prepared to continue with a reduced majority should they leave.

"Draghi offered much more stick than carrot in this speech," said Francesco Galietti, head of the political risk consultancy Policy Sonar. "He indicated that he wanted to stay, but he also made clear what he doesn't like about the current situation."