(Bloomberg) -- Italian Prime Minister Giuseppe Conte is racing against the clock as he bids to forge a new majority that would keep him in power after a junior ally abandoned him, with the day of reckoning set for Tuesday in a Senate vote. But the premier’s options -- and his room for maneuver -- are limited.
Conte, a two-time premier who until 2018 was an obscure law professor, is scrambling to win over enough lawmakers to revive his majority after ex-Premier Matteo Renzi on Wednesday pulled his party’s ministers from the ruling coalition.
The task will be particularly challenging with a confidence vote due Tuesday in the Senate, where Conte’s government already had a razor-thin majority, according to officials who asked not to be named discussing a confidential issue. A vote is also due in the lower house Monday.
Time is not on Conte’s side. The country is in the midst of a coronavirus resurgence and struggling to overcome a recession. Following Renzi’s announcement, President Sergio Mattarella has been insisting on a speedy resolution to the political upheaval, the officials said.
The uncertainty has been reflected in bond markets, with ten-year yields rising Thursday and the spread over German debt climbing. The cabinet Thursday night approved a 32 billion-euro ($39 billion) increase in the deficit to finance fresh aid for businesses affected by lockdown measures.
Here is how the political turmoil could play out:
1. Conte Stays On
Conte could stay on by forging a new alliance without Renzi. While he would need to replace as many of Renzi’s 18 Senators as he can, the premier is optimistic he can round up sufficient votes for Tuesday’s challenge in the Senate, the officials said.
Votes from some lawmakers in Renzi’s party as well as a handful from Sergio Berlusconi’s Forza Italia could guarantee Conte enough votes to stay in power, officials said.
As an alternative, the premier could still negotiate a new alliance with Renzi, though that appears less likely.
Conte, known for playing the long game on contentious issues, has been under pressure from Mattarella. The president is responsible for approving any attempts to form a new government and he has pushed for a quick resolution to the impasse.
That’s prompted Conte to go to parliament Monday and Tuesday. A threat by the center-right opposition to block the legislature’s work if Conte drags things out has also played into the timing, one of the officials said.
Mattarella would prefer avoiding a makeshift majority that depends too much on centrists or lawmakers breaking from their parties, according to a senior state official. Losing a confidence vote would force Conte to resign.
2. Conte Out
Parties from the current coalition could reunite under a different premier. Speculation among Rome-based lawmakers has focused on Democratic leader Nicola Zingaretti, and Culture Minister Dario Franceschini and Defense Minister Lorenzo Guerini, both also from the Democrats.
Another non-Conte alternative could be a broader “government of national unity” encompassing at least some elements of the opposition center-right, possibly led by a figure like ex-European Central Bank head Mario Draghi.
But the center-right is split and some lawmakers from the Five Star Movement, the Conte coalition’s largest party, oppose anything that looks like a “technocratic” government.
3. Early Elections
A new vote is the scenario most feared by bond investors. It also appears to be the least likely option at the moment. Coalition lawmakers are desperate to avoid a vote for two reasons: 1) opinion polls show the center-right would win; and 2) in the wake of reform legislation, the number of seats available in a future parliament has been reduced.
A caretaker government could step in until elections, possibly in June, according to officials, as leaders would seek to avoid a vote during the pandemic. Keeping some schools closed only to reopen them as voting sites would create an unacceptable set of optics, one official said.
The window for early elections is also gradually closing. Mattarella’s term as president ends in February 2022 and by law he cannot dissolve parliament in the last six months of his term. That means that if early elections are to be called, they need to happen before August of this year.