Italy's economy has turned a corner under Prime Minister Mario Draghi but a possible move to the presidency is sparking concern among analysts that the post-pandemic recovery might come to an abrupt halt.
The former European Central Bank chief, hailed for his work to protect the eurozone during the debt crisis a decade ago, is the favourite to be elected head of state later this month -- but many economists are hoping he stays where he is.
Since being brought in by outgoing president Sergio Mattarella in February 2021, Draghi has led a remarkably united government, comprising almost all Italy's political parties.
But fractures are appearing, notably over coronavirus rules, raising doubts as to whether it can last until 2023 elections.
Draghi's departure presents "a big risk, at least in the short term", notes Jesus Castillo, economist at Natixis.
"It is Mario Draghi who has maintained the unity of the government, and there is nobody in Italy's political landscape today who could follow him in guaranteeing such cohesion," he told AFP.
"If he becomes president, very quickly we will see a political stalemate and probably early elections."
Such elections would come at a bad time, as Italy "must keep to a very tight programme of reforms to receive funds" from the European Union's post-pandemic recovery scheme, of which Rome is the main beneficiary, to the tune of almost 200 billion euros.
- Instability factor -
Draghi's departure would "bring instability and would have serious repercussions on the implementation of the recovery plan, with a loss of credibility of the government, and on investor confidence", said Giuliano Noci, professor of strategy at Milan's Polytechnic business school.
He said it would likely significantly increase the spread -- the gap between German and Italian bond yields watched as a sign of market confidence, which shrank after Draghi's arrival.
US investment bank Goldman Sachs -- where Draghi worked between 2002 and 2005 -- has warned "the presidential election could have significant market implications".
In a recent note, it said negotiations to find a new premier, or hold elections, could delay the implementation of the EU-mandated reforms.
"Any implementation delays following Draghi's resignation from the premiership could reduce the actual take-up of recovery fund grants by between 50 percent and 75 percent", with a knock-on effect on economic growth, it said.
The Italian economy, the third largest in the eurozone, was expected to grow by more than six percent in 2021, after contracting by 8.9 percent in 2020 when coronavirus first hit.
Italy has a reputation for wasting EU funds, but Draghi insisted last month it had met all 51 objectives agreed with Brussels for 2021.
- Parliamentary support -
In a press conference, Draghi intimated he was open to the presidency, saying he was a "grandfather at the service of the institutions". He added that path was set regardless of who led the government, as long as it had the largest possible support in parliament.
But therein lies the challenge.
Just over 1,000 senators, MPs and regional representatives will begin voting for a new president on January 24, but there is no sign yet of consensus on a candidate, who must secure either two-thirds of votes in the first three rounds, or an absolute majority thereafter.
A major obstacle to Draghi becoming president is Silvio Berlusconi, the 85-year-old former premier and billionaire media mogul who is campaigning heavily for the presidency despite his continuing legal wrangles.
He has made it known that if Draghi takes the top job, his right-wing Forza Italia party will quit the government, although some dismiss this as political posturing.
There are many other names in the mix, and the presidential election, where there is no official candidate list and electors vote in secret, is known for delivering surprises.