Back to square one

31 Jan 2022 By Lisa Jucca Follow @LJucca

Lawmakers backed incumbent Sergio Mattarella for a second term. This averts an implosion of the reformist executive of premier Mario Draghi, who had vied for the presidency. The status quo offers investors cover from Italy’s dysfunctional politics while an energy crisis rages.

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After days of negotiations, Italian lawmakers and regional delegates on Jan. 29 elected President Sergio Mattarella, 80, to a second seven-year term.

Mattarella had previously ruled out remaining in office. But he agreed to stand for a second term given the inability of political parties to agree on an alternative candidate.

Prime Minister Mario Draghi, who had signalled in December he was open to becoming the next president, will continue to lead a broad coalition government.

The yield difference between Italian and German 10-year government bonds had widened to nearly 150 basis points in the run-up to the presidential vote, well above an average of around 100 basis points for most of 2021.

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