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Italy's Draghi looks to fractured parties to back new government

ROME (Reuters) - Former European Central Bank chief Mario Draghi was due to start talks with Italy’s divided political parties on Thursday to seek backing for a new government to deal with the entwined health and economic crises.

Former European Central Bank President Mario Draghi pauses as he speaks after his meeting with Italian President Sergio Mattarella at the Quirinale Palace in Rome, Italy February 3, 2021. Francesco Ammendola/Presidential Palace/Handout via REUTERS

Draghi, one of the most respected figures in Italy who has received a mandate from the head of state to put together an administration, entered parliament in mid-morning and was due to see leaders of the smaller groups later in the day.

He was expected to meet the main parties on Friday, with many political leaders undecided over whether to endorse his appointment or even look to join his new cabinet.

Financial markets have cheered the sudden arrival of Draghi, hopeful he can spearhead long-awaited reforms to boost growth in the euro zone’s third-largest but most sluggish economy, thereby bolstering the currency bloc.

However, he needs the backing of parties from across the political spectrum before he can take office.

The largest group in parliament, the anti-establishment 5-Star Movement, which played a prominent role in Italy’s last two coalitions, initially signalled it would not back Draghi, but struck a more cautious note on Thursday.

“In my opinion, the 5-Star Movement has the duty to meet (Draghi), listen and then take a position on the basis of what our parliamentarians decide,” said Luigi Di Maio, the outgoing foreign minister and party big-wig.

“We did not seek the stalemate ... but it is precisely in these circumstances that a political force shows itself to be mature in the eyes of the country.”

Former prime minister Silvio Berlusconi suggested he might be ready to support a Draghi government - a move that could cause a schism within the right-wing opposition bloc.

“The decision of the President of the Republic to appoint Mario Draghi to form the new government goes in the direction we have been indicating for weeks: that of a personality with a high institutional profile around whom we can try to build substantial unity,” Berlusconi said in a statement.

One of his allies, the far-right Brothers of Italy, has ruled out voting for Draghi, while the largest party in the bloc, the eurosceptic League, has sounded at best lukewarm, saying early elections would be best for the country.

The president moved quickly to anoint Draghi after talks aimed at salvaging outgoing Prime Minister Giuseppe Conte’s 17-month-old coalition imploded on Tuesday evening.

Mattarella warned that a new government had to take office immediately to prevent Italy from missing out on more than 200 billion euros ($243 billion) from a European Union fund designed to help overcome the economic slump.

Matteo Renzi, the head of the small Italia Viva party which triggered Conte’s downfall by withdrawing from the cabinet, said he hoped a Draghi government could take office next week.

Additional reporting by Giuseppe Fonte; Editing by Angus MacSwan