Italian PM Draghi's fate hangs in balance as unity call falls flat

By Giuseppe Fonte and Angelo Amante

ROME (Reuters) -Italian Prime Minister Mario Draghi on Wednesday demanded unity from his coalition partners as his price for staying in office but his call appeared to widen cracks in the government, leaving his fate in the balance.

Draghi set out a series of issues facing Italy ranging from the war in Ukraine to social inequality and rising prices, and said political parties needed to get behind him if he was to steer the country to elections due in the first half of 2023.

"The only way, if we want to stay together, is to rebuild this pact, with courage, altruism and credibility," Draghi said in an uncompromising speech to the upper house, adding that many Italians wanted the coalition to carry on.

The prime minister called a confidence vote for later on Wednesday that will seal the fate of his government. A result is due at around 7.30 p.m. (1730 GMT)

The motion simply stated that the Senate approved his speech. However, centre-right parties said they would not back this wording, and instead proposed a motion calling on Draghi to create a new administration, without the 5-Star Movement that has been blamed for triggering the political crisis.

If Draghi loses the vote, or decides there is not sufficient unity in his 18-month-old coalition, he will resign, opening the way for early elections in September or October.

Draghi tendered his resignation last week after the populist 5-Star failed to back a previous confidence vote, but President Sergio Mattarella turned him down and told him to go before parliament to see if he could revive the administration.

"The support I saw in this country (for the coalition) ... is without precedent and convinced me to re-propose a pact for government and ask you to vote on it. You will decide," Draghi told the Senate at the end of Wednesday's debate.

PARTY SPLITS

Draghi's call for unity appeared to have fallen on deaf ears, as conservative parties within the coalition said they would remain in the cabinet only if 5-Star was excluded.

In a joint statement, the League and Forza Italia parties said they wanted a major government shake-up to reflect any new composition - a demand that Draghi has previously ruled out.

5-Star said Draghi had not met their demands in his address to the Senate, but did not say if they would no longer back him.

The former European Central Bank chief has enough support to remain in office without 5-Star, but he has so far rejected that option because his original mandate was to lead a national unity coalition with parties from across the political spectrum.

However, government officials have suggested he might decide to carry on even if he does not have the backing of 5-Star, pointing to the large number of parliamentarians who have left the party in recent months.

There might be further desertions as a result of the ongoing crisis, politicians have said. Some 60 lawmakers walked out in June, led by Foreign Minister Luigi Di Maio, who accused the 5-Star leadership of plotting to unseat Draghi.