Sergio Mattarella re-elected as Italy faces political and economic challenges

Italian President Sergio Mattarella has re-elected himself following a period of political impasse. The decision comes amid a landscape characterized by legislative stagnation and the frequent use of decree laws.

Economist Carlo Cottarelli has been tasked by President Mattarella to form a new government. In discussions regarding the nation's economic state, Cottarelli noted that while Italy is not in a deep recession, it faces chronic issues such as low economic growth. He highlighted that Italian small businesses face electricity costs 57% higher than those in Spain due to high taxation and a heavy reliance on hydrocarbons.

Furthermore, the cost of living remains a concern, with worker purchasing power in early 2026 reported to be 8% lower than in 2021 due to previous inflation. Cottarelli suggested that addressing high energy costs and tax pressures is essential for economic stability.