San Francisco Frontiers - Italy fate in parties' hands after Draghi asks: 'in or out?'

Now was not the time for uncertainty within the eurozone's third largest economy, amid a myriad of domestic and geopolitical challenges, from a struggling economy to the Ukraine war, Draghi earlier told the Senate.

"We now need staunch support for the government's programme," he said, calling on parliamentarians for "courage, selflessness, credibility".

"Are you ready? ... You don't owe this answer to me, but to all Italians", he added.

In the stern speech by a usually softly-spoken Draghi, the former leader of the European Central Bank, who offered his resignation last week, said he was prepared to stay -- but on one condition: if the wildly disparate parties pledge anew to a common agenda.

The crisis was sparked by the refusal by the Five Star Movement, a coalition member, to opt out of a confidence vote last week.

Draghi moved immediately to step down, but was persuaded by Italy's president to reach out to parties first.

- 'Carrot and stick' -

Polls suggest most Italians want Draghi, 74, to stay at the helm until the scheduled general election in May next year. His departure could force the president to dissolve parliament and call elections for September or October.

"Draghi did not compromise. He was very tough," Francesco Galietti, Policy Sonar analyst, told AFP.

"The entire speech was stick and carrot – though much more stick than carrot".

There is much at stake: a government collapse could worsen social ills in a period of rampant inflation, delay the budget, threaten EU post-pandemic recovery funds and send jittery markets into a tailspin.

Draghi noted Wednesday that as an unelected leader he needs the broadest consensus possible to tackle Italy's most pressing issues: from a cost of living crisis and recession worries, to the rollout of key reforms and the Ukraine war.

For a long time, he said, his coalition was able "to put aside divisions and come together... for rapid and effective action, for the good of all citizens".

But that had dropped by the wayside as the parties began focusing more on their grassroot supporters ahead of next year's ballot.

- 'Scolded' -

Parties on the centre-left immediately said they would support Draghi at the vote later Wednesday.

The two right-wing parties in the coalition, ex-premier Silvio Berlusconi's Forza Italia and Matteo Salvini's anti-immigration League, said they would only remain in Draghi's government if it did not include the Five Star.

Draghi "scolded his coalition partners for infighting and point-scoring" over the past few months and laid out a government line that "contains measures that either the League or the Five Star Movement firmly oppose," Teneo consultancy's Wolfango Piccoli said in a note.

"By not making any new concessions to either party, Draghi did not make it easy for the League and the Five Star".

As the parties fiercely debated in the Senate, it was not clear which way the Five Star would vote.

The populist party may split at the vote, with Forza Italia and the League potentially agreeing to work with the breakaway element.

Once the largest party in parliament, the Five Star Movement has already seen scores of defections as it hews to its radical, anti-establishment side in a bid to reverse plummeting support in the polls.

- 'Pull ourselves together' -

Two-thirds of Italians believe Draghi should stay, according to a Euromedia poll published Tuesday. Nearly 2,000 mayors have signed a petition calling for him to remain PM.

Wednesday's vote comes a day before the European Central Bank unveils a tool to correct stress in bond markets for indebted eurozone members.

The tool is meant for countries like Italy -- but as Enrico Letta, head of the centre-left Democratic Party (PD) said Tuesday, "if we don't pull ourselves together, it will be harder to ask others to save us".

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