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ITALY-POLITICS
Second day of Italy crisis talks after PM resigns
ROME, Aug 22, 2019 (BSS/AFP) – Italy’s president will hold a second day of
talks aimed at solving the political crisis shaking the country on Thursday
after the disintegration of the populist government.
President Sergio Mattarella will meet the main parties, including the anti-
establishment Five Star Movement (M5S) and far-right League, after the
breakdown of their dysfunctional coalition.
Prime Minister Giuseppe Conte resigned on Tuesday after months of alliance
sniping and a bid by League leader and Interior Minister Matteo Salvini to
force a snap election, just 14 months since coming to power.
The nationalist, populist government’s demonisation of migrants, promoted
by Salvini in particular, and attempts to flout EU budget rules had angered
many European leaders.
Mattarella met the leaders of both houses of parliament on Wednesday and
has been trying to find a way forward.
The formation of a new coalition, a short-term technocratic government or
an early election — more than three years ahead of schedule — are the main
options.
– Conditional support –
A proposed alliance between M5S and opposition centre-left Democratic Party
(PD) — previously almost unthinkable — appears to be gaining traction, with
PD leader Nicola Zingaretti saying he is ready to make a deal.
The PD and M5S have been at each other’s throats for years — but an
alliance would see Salvini kicked out of government, a powerful motive for
compromise.
Zingaretti has said the party would back an M5S coalition dependent on five
conditions, including a radical shift in Italy’s zero-tolerance policy on
migrants crossing the Mediterranean.
He later told “La 7” television he was also against the idea of Conte
staying on as prime minister.
M5S would like Conte to remain in place but did not give much away, saying
it would “wait for the end of consultations”.
In a bid to get a PD-M5S alliance off the ground, former PD premier Matteo
Renzi has said he will not participate.
Many in the anti-establishment party view him as elitist.
Salvini, who is also deputy prime minister, on Wednesday mocked his former
coalition allies, saying: “In a week they have gone from the League to
Renzi.”
He added: “No matter which government emerges, its goals will be against
the League.”
– Risk of recession –
The end of the unstable coalition government in the eurozone’s third-
largest economy has so far been welcomed by the markets, with a sharp rise in
the Milan stock market on Wednesday.
The country’s debt ratio — 132 percent of gross domestic product — is the
second-biggest in the eurozone after Greece, and youth unemployment is
currently above 30 percent.
Governments have consistently struggled to bring down debt levels and
unemployment.
“Italy’s disharmonious political backdrop and the country’s budgetary
challenges extend well before the sovereign debt crisis,” said Rabobank
analyst Jane Foley.
Rome needs to approve a budget in the next few months or potentially face
an automatic rise in value-added tax that would hit the least well-off
Italian families the hardest and likely plunge the country into recession.
“(The crisis) arrives at a critical juncture for Europe amid the risk of
recession in Germany and the formation of the new European Commission, and
could contribute to deteriorate significantly the confidence on the
eurozone,” said Andrea Montanino, chief economist at the General
Confederation of Italian Industry.
After last year’s election it took months of wrangling before a government
was formed.
Mattarella has made it clear he wants talks to conclude quickly but splits
within the PD and M5S, as well as sharp policy differences, could complicate
coalition efforts.
A PD-M5S tie-up would realistically also need support from smaller parties
to be an effective government.
BSS/AFP/MSY/0942 hrs