It often happens that mid-August, when almost everyone is on vacation, brings sensational events in politics. In Russia it has already become proverbial. And not only there. For example, in 1971 Nixon removed the dollar from the gold standard, causing shock around the world. Italy is no exception either.

In 2019, the political Mercalli scale showed a massive earthquake in Italy due to the unexpected crisis of the left-right government, launched by a draft vote of no confidence in Prime Minister Conte, which the ruling League party introduced to the Senate. This has immediately affected the Italian stock market, causing a drop in indices and an instant increase in spreads. There is also strong concern about complex relationships with Brussels, which could trigger hardship for Rome.

In recent weeks, the opinion of the Italian government has been taken into account there, because an Italian (David Sassoli – translator's note) occupied key positions in the European Commission. But now Brussels can demand from Italy interlocutors that would be more reliable in terms of financial predictability, as well as certainty regarding the budget law to be submitted at the EU level by October 15. To this date, Rome has to find guaranteed resources amounting to 23 billion euros in 2020 and nearly 29 billion euros in 2021, so as to prevent an increase in the common VAT from 22 per cent to 25.2 per cent in 2020 and to 26.5 per cent in 2021, while the subsidized VAT will increase from 10 to 13 per cent in 2020.

Meanwhile, public opinion polls demonstrate growth in the League's popularity and the massive issues of the Five Star Movement: if the government crisis continues and there is a need to vote right away, Deputy Prime Minister Matteo Salvini's party will get 38 per cent of the vote, with the center-right coalition enjoying over 50 per cent. The popularity of Luigi Di Mayo's Five Star Movement has, on the contrary, fallen to 16.5 per cent, which is almost 20 points lower than just a year and a half ago, during the 2018 elections. If the vote confirms these data, the number of seats occupied by the Five Star Movement will drop to about a quarter of the current. The result of Nikola Zingaretti's Democratic Party will also be very modest, with its 23 alleged per cent of the vote, as polls conducted over the recent weeks have revealed.

The parliamentary version of the crisis will be demonstrated on August 20 at 15:00, when the Senate is going to gather in the conference room to listen to Prime Minister Giuseppe Conte. At the same time, a motion of no confidence may be submitted and voted upon. The same procedure is scheduled for 11.30 a.m. of Wednesday 21 in the Chamber of Deputies (Italian parliament's lower chamber – translator's note).

Conte has two options: to wait for the Senate voting or to appeal directly to the President (with a resignation request – translator's note). Conte's resignation would cancel the Chamber discussion and vote on the deputy number reduction (another issue between the League and the Five Star Movement – translator's note), which, according to the agenda, will take place on Thursday, August 22.

Anyway, following this stage, President of the Republic Sergio Mattarella will decide what to do next. At the same time, a new election is not the only way out. Among the options is an "election guarantee" government headed by the post-partisan Prime Minister and technical ministers, because otherwise it is impossible to untie the "Salvini knot". In any case, he, the Minister of the Interior, cannot run his election campaign as a candidate for Prime Minister, since it is his Ministry that ensures polling sites' functioning.

For this very reason two former chairmen of the Constitutional Court, Valerio Onida and Giovanni Maria Flick, as well as current Minister of Economy and Finance Giovanni Tria, are among Prime Minister candidates. And not just them. Because the President can once again appoint Giuseppe Conte Prime Minister. In this case, a new vote should take place as soon as possible, in the second half of October.

Another scenario, most feared by political analysts, is a provisional government, i. e. the continuation of the government led by Conte, who has resigned and is limited to current issues until December 31. Should that be the case, no measures will be taken against Brussels, which could prevent an increase in VAT.

Experts believe that another aspect of the interim Cabinet could be a "saving-the-accounts" government, that is a government appointed for a limited period with the sole purpose of adopting the budget law for 2020, so that an increase in VAT could be avoided. The probability and desirability of such a scenario is confirmed by a fairly broad consensus of all the Parliament's major political forces. Otherwise, Italy is going to face an election postponed until early 2020.

On the other hand, it should be remembered that, whether due to the budget law or by coincidence, Italy has never managed to hold parliamentary elections in the autumn. By the way, this very fall, on November 1, Mario Draghi will leave the post of European Central Bank head in Frankfurt and return to Rome. Should we bear this coincidence in mind and pay heed to him as a politician?