By Giovanni Legorano 

ROME -- Italy's Prime Minister Giuseppe Conte survived a confidence vote in the country's Senate but fell short of an outright majority, weakening his government as it searches for a way to tame the Covid-19 pandemic and revive the economy.

The vote in the Senate was triggered by the decision of a small centrist party led by a former prime minister, Matteo Renzi, to withdraw from the governing coalition. Mr. Renzi said he objected to Mr. Conte's plans for spending more than 200 billion euros, equivalent to $243 billion, in European Union loans and grants to support the economic recovery after the pandemic.

Mr. Conte garnered 156 votes in favor of his left-leaning government and 140 against, with Mr. Renzi's party abstaining. After falling short of an absolute majority in Italy's 321-member Senate, Mr. Conte could struggle in the future when he seeks to pass legislation. The government previously relied on Mr. Renzi's group for its Senate majority.

"We will have a weak government precisely when we would need a very strong one," said Valentina Meliciani, an economics professor at LUISS University in Rome.

The government won a confidence vote in the lower house of Parliament on Monday, where it has a stronger majority. If Mr. Conte had lost the Senate vote he would have been forced to resign, paving the way to either a new governing coalition or a snap election, which opinion polls suggest the right-of-center opposition parties would win.

Mr. Conte, who was a little-known law professor when he was chosen to lead two unwieldy coalition governments in 2018 and 2019, has become an unexpectedly stable premier since last year, when Italy became the first Western country to be severely hit by the coronavirus. His approval ratings rose after he imposed the world's first national lockdown and used rigorous measures, such as stay-at-home orders and the suspension of gatherings and nonessential business, that were soon adopted around the world.

But after Italy contained the virus by the summer, infections and deaths in the country rebounded late last year. Renewed restrictions on everyday life have led to widespread public weariness and fears for the national economy.

Italy's national debt is expected to rise to around 160% of gross domestic product due to the economic fallout of the pandemic. The economy is likely to have contracted by around 9% last year and will grow by only 3.5% in 2021, according to the Bank of Italy, making Italy's economy one of Europe's worst-hit by the pandemic.

Italy is the biggest beneficiary of the EU's massive economic-recovery funds. But the scale of the funding, and the sense it could be a unique opportunity to revitalize an economy that has struggled to grow for the past two decades, has fueled instability in the government. Mr. Renzi regularly attacked Mr. Conte's economic proposals before pulling out of the government last week.

Write to Giovanni Legorano at giovanni.legorano@wsj.com

 

(END) Dow Jones Newswires

January 19, 2021 17:08 ET (22:08 GMT)

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