ROME, July 22 (Xinhua) -- With Italy's government crisis coming to a head, analysts have said the country is likely to experience a period of uncertainty and see setbacks for its reform process.
Mario Draghi, former president of the European Central Bank (ECB), formally resigned as Italy's prime minister on Thursday after 17 months in office.
He will stay on the job to head a caretaker government that has to attend to day-to-day matters. Within 70 days, a new election must be held.
"This means the reform process in Italy is on hold for now," Vincenzo Emanuele, a member of the Italian Center for Electoral Studies (CISE) and a political scientist at Rome's LUISS University, told Xinhua. "In his new role, Draghi will just make sure the government keeps running unless there is a big emergency."
Emanuele and other analysts said that this would not impact the reforms already under way, but it would mean that Italy cannot take steps toward new reforms needed to gain access to billions of euros in European Union (EU) coronavirus recovery fund grants and loans.
Completing the reforms outlined in the country's National Recovery and Resilience Plan is a precondition for it to continue receiving its 200-billion-euro (204.5 billion U.S. dollars) portion of the EU's post-COVID recovery package.
"Nobody would be surprised if access to the crisis funds was temporarily blocked or slowed because reforms aren't enacted in time," Federico Castorina, president of CulturaDemocratica, a public policy foundation, told Xinhua. "Italy's economy is already fragile. It's not good news from that perspective."
Italy will hold early elections on Sept. 25, the office of President Sergio Mattarella said on Thursday after the resignation of Draghi and the dissolution of Parliament.
In his brief address to the nation on Thursday, Mattarella warned the parties that the country was facing crucial challenges that could not be put on hold.
"It is my duty to underline that the period we are facing does not allow for pauses in the indispensable interventions to fight the effects of the socio-economic crisis," he said.
These interventions are necessary for coping with the current economic difficulties, in particular the rise in inflation, and for containing the impact of the conflict between Russia and Ukraine, Mattarella added.
Experts noted that it is difficult to speculate about what will happen afterwards, since the election on Sept. 25 will determine the makeup of the next Parliament. But they said that drafting the country's 2023 national budget, which by law must be finalized and approved before the end of this year, should be a top priority.
Castorina said one challenge the new government will face will be completing the complicated budget process in a matter of weeks rather than months.
According to Emanuele and Castorina, the country's foreign policy priorities will remain largely unchanged in the near term, including its support for Ukraine in its conflict with Russia, the backing of sanctions against the Russian government, and the search for new sources of energy to help the country reduce its dependence on natural gas imports from Russia.
But there could be some tweaks, they noted. For example, the League party, which will have increased influence with Draghi playing a more technocratic role, has been in favor of economic support for Ukraine but not of sending military equipment.
Emanuele and Castorina both said the biggest international impact from Draghi's resignation will be reduced global prestige for the country, at least initially.
"Thanks to his high-profile role at the ECB, Draghi was a credible and respected leader, who was already known in every capital," Emanuele said. ■
