Italy’s government backs Recovery Plan, risk of political crisis remains

Italy’s government on early Wednesday morning gave the green light of the controversial Recovery Plan for the coronavirus, financed with European funds, although the country has not completely avoided the political crisis, news wires reported.

After long debates, the two ministers of Italia Viva party finally abstained from voting and its leader ex-premier Matteo Renzi said he would announce this afternoon at a press conference the next steps. The IV is part of PM Giuseppe Conte’s coalition cabinet with the 5 Star Movement (M5S) and the Democratic Party (PD).

Renzi insisted on Tuesday that Italy should apply for a loan from the Eurozone's bailout fund. The fund, known as the European Stability Mechanism (ESM), offers up to €36bn in cheap loans for countries to bolster their health systems. "We have made some steps forwards but something is missing, and that is called the ESM," Renzi said. However, with free grants available from the EU's Recovery Fund, no country has shown any interest in taking an ESM loan, wary of pushing up their national debts and the market stigma that could be linked to taking money from a bailout fund, Reuters reported. The largest coalition party, the anti-establishment 5-Star Movement, is strongly hostile to the idea, and Conte has so far backed its position.

Italia Viva, a centrist party, has under 3% of the vote, but its backing in parliament is crucial to the survival of the coalition.

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