Italy renews bid to form government, end turmoil

Italian President Sergio Mattarella speaks to media after a meeting with Italy's Prime Minister-designate Giuseppe Conte at the Quirinal Palace in Rome, Italy on May 27, 2018.
Italian President Sergio Mattarella speaks to media after a meeting with Italy's Prime Minister-designate Giuseppe Conte at the Quirinal Palace in Rome, Italy on May 27, 2018. PHOTO: REUTERS

5-Star, League seek new name for economy minister after President's veto of Savona

ROME • Italy searched yesterday for a last-minute exit from almost three months of political turmoil, with its biggest party looking to make a renewed attempt to form a coalition government with the right-wing League.

The two anti-establishment parties, the 5-Star Movement and League, had abandoned plans to jointly take power at the weekend after the President blocked their proposed Cabinet line-up.

President Sergio Mattarella's veto of the 81-year-old eurosceptic Paolo Savona as economy minister appeared to tip the country back towards repeat elections, triggering a dramatic speculative attack on Italian financial markets.

The parties are now trying to find "a point of compromise on another name" for the economy ministry, said the source close to 5-Star, the single-biggest party in the new Parliament.

The sense that a resolution of the stalemate might be at hand came from Prime Minister-designate Carlo Cottarelli, tasked by the head of state this week to calm the turmoil and plan for repeat elections that could be held as early as July.

Mr Cottarelli was yesterday expected to unveil a Cabinet line-up in a bid to end the chaos that has also raised fears for the stability of euro zone.

Five Star and the League, who hold a majority in both houses of Parliament, have vowed to reject Mr Cottarelli's proposed technocrat government.

However, League leader Matteo Salvini, who is surging in opinion polls, seemed to throw cold water on the notion that his party and 5-Star could try again to take power, saying Italy should return to an election as soon as possible. "The earlier we vote, the better because it's the best way to get out of this quagmire and confusion," he told reporters.

But he did appear open to an interim administration to govern for a few months, saying an election at the end of July would be "disruptive" for Italian seasonal workers.

He invited Mr Mattarella to make the first move, to "explain to us how we can get out of this situation".

A League source said the party would not block a quick political solution that would enable Italy to deal with possible "emergencies".

Currently, Mr Cottarelli has no major parliamentary support for a stopgap government of technocrats.

Despite the softer tone from 5-Star and hopeful remarks from him, a top adviser to Mr Salvini said the League was not prepared to abandon Mr Savona.

"If it wasn't possible three days ago, then it's hard to see why it would be now," Mr Giancarlo Giorgetti was quoted as saying to online news site Il Fatto Quotidiano.

"It is difficult because... the people who want to sort out problems affecting everyday citizens have their hands tied by stronger political forces," said retired Rome resident Mauro Ciarpagnini, adding that the President should not have rejected Mr Savona.

A surprise breakthrough between the President and 5-Star/League would ease uncertainty but still usher in a coalition planning to ramp up spending in the heavily indebted nation and push for changes to European Union and euro zone fiscal rules.

In the event of continued stalemate, Italy will go back to elections, with most major parties calling for the President to dissolve Parliament and hold a vote as soon as July 29.

A new opinion poll showed the League, which argues that fiscal rules governing the euro zone are "enslaving" Italians, would boost its share of the vote to a quarter, from around 17 per cent on March 4.

The IPSOS poll, in the Corriere della Sera newspaper, showed support for the League's would-be coalition partner, the 5-Star Movement, steady at about 32.6 per cent - implying a much more comfortable majority if the pair were to try again to govern.

That prospect has rocked financial markets, with the euro sinking to multi-month lows on fears that snap elections would lead to a eurosceptic government in Rome.

REUTERS, AGENCE FRANCE-PRESSE

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A version of this article appeared in the print edition of The Straits Times on May 31, 2018, with the headline 'Italy renews bid to form government, end turmoil'. Print Edition | Subscribe