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Italy's populist leaders strike deal to resurrect proposed coalition
Italy's populist leaders strike deal to resurrect proposed coalition
(35 minutes later)
Italy’s two populist parties have reached a new agreement to form a government, days after a tense standoff with Italy’s president over the parties’ stance on the euro abruptly ended their first bid to assume power.
Italy’s two populist parties have reached a new agreement to form a government, days after a standoff with Italy’s president over their stance on the euro abruptly ended an initial bid to assume power.
A joint statement by the anti-establishment Five Star Movement and the far-right League announced that a political newcomer Giuseppe Conte - who had been seen as a controversial choice - was still slated to serve as prime minister. The relatively unknown law professor was due to meet Italy’s president, Sergio Mattarella, on Thursday night.
A joint statement by the anti-establishment Five Star Movement (M5S) and the far-right Lega announced that political newcomer Giuseppe Conte, who had been seen as a controversial choice, was still slated to serve as prime minister. The relatively unknown law professor was due to meet Italy’s president, Sergio Mattarella, on Thursday night.
The deal will bring at least temporary calm to a political crisis that has roiled Italy for weeks. The tumult raised questions - in Brussels and among investors around the world - about whether the rise in Italian populism and the collapse of traditional parties posed a fundamental threat to the country’s future in the eurozone.
“All the conditions have been fulfilled for a political, Five Star and Lega government,” said Luigi Di Maio, the Five Star chief, and Matteo Salvini, the Lega leader, in a joint statement after several hours of talks in Rome.
A formation of the new government will at least temporarily allay those concerns, because it will - for now - remove the threat that snap elections will be called later this summer, a prospect which worried investors because it could have bolstered anti-EU parties.
The deal will bring at least temporary calm to a political crisis that has embroiled Italy for weeks. The tumult raised questions – in Brussels and among investors around the world – about whether the rise in Italian populism and the collapse of traditional parties posed a fundamental threat to the country’s future in the eurozone.
Italian press reports indicated that the populist leaders had stepped back from their insistence that Paolo Savona, an 81-year-old eurosceptic, serve as finance minister. The choice had been vetoed by Mattarella days ago, prompting the M5S and the League to call off their deal. Savona is now expected to be nominated to serve as EU minister, instead.
A formation of the new government will at least temporarily allay those concerns, because it will remove for now the threat that snap elections will be called later this summer, a prospect which worried investors because it could have bolstered support for anti-EU parties.
But there are still many unknowns about how the new government, comprised of an uneasy alliance between two former political opponents, both jockeying for power, will govern Italy.
Italian press reports indicated that the populist leaders had stepped back from their insistence that Paolo Savona, an 81-year-old Eurosceptic, should serve as finance minister. The choice had been vetoed by Mattarella, prompting the M5S and the Lega to call off their deal. Savona is now expected to be nominated to serve as EU minister instead.
Matteo Salvini, the bombastic and xenophobic leader of the League, who rose in politics in recent years on the back of incendiary and racist statements about migrants and Roma, is expected to take on the role of interior minister. Salvini has campaigned on the promise of mass deportations of migrants, and has said that a new government would build new detention centres around the world.
But there are still many unknowns about how the new government – an uneasy alliance between two former political opponents, both jockeying for power – will govern Italy.
He is also a fierce critic of Brussels, and has called for closer ties to Russia.
Salvini, the bombastic and xenophobic leader of the Lega, who rose in recent years on the back of incendiary and racist statements about migrants and Roma, is expected to take on the role of interior minister. Salvini has campaigned on the promise of mass deportations of migrants and said a new government would build detention centres around the world. He is also a fierce critic of Brussels and has called for closer ties to Russia.
Di Maio is expected to lead a powerful new post that will combine labour and industry portfolios, in a move that could mark big changes to labour and environmental policies, given the M5S’s stated opposition to big industry.
Di Maio is expected to lead a powerful new post that will combine labour and industry portfolios in a move that could mark big changes to labour and environmental policies, given the M5S’s stated opposition to big industry.
Giovanni Tria, a little known economics professor, is expected to be nominated to the finance ministry. While Tria has been critical of the EU, he is not been seen as an advocate for an exit from the eurozone.
Giovanni Tria, a little known economics professor, is expected to be nominated to the finance ministry. While Tria has been critical of the EU, he is not been seen as an advocate for an exit from the eurozone.
The new deal has not yet been blessed by Italian president Sergio Mattarella, who earlier this week nominated a technocrat, Carlo Cottarelli, to serve as prime minister. Those plans were put on hold after Mattarella opted to give the populists more time to reach a new agreement.
The new deal has not yet been blessed by Mattarella, who earlier this week nominated a technocrat, Carlo Cottarelli, to serve as prime minister. Those plans were put on hold after Mattarella opted to give the populists more time to reach a new agreement.
The new government is expected to take a far more antagonistic stance against Brussels than the previous government, headed by the centre-left Democratic Party. But the alliance between the M5S and the League will only have a relatively narrow majority in the Italian Senate, easing some concerns among investors and officials in Brussels that the new government could take drastic actions.
The new government is expected to take a far more antagonistic stance against Brussels than the previous government, headed by the centre-left Democratic party. But the alliance between the M5S and the Lega will only have a relatively narrow majority in the Italian senate, easing some concerns among investors and officials in Brussels that the new government could take drastic actions.
While both parties are populist in nature, and have railed against Brussels and Italian “elites”, they have long been natural opponents in politics.
While both parties are populist in nature, and have railed against Brussels and Italian “elites”, they have long been natural opponents in politics.
“They are both led by young and ambitious leaders who share prime-ministerial ambitions. Due to mutual distrust, it has taken both parties over 70 days to reach a deal and choose an unknown third figure as prime minister,” said Wolfango Piccoli, the co-president of Teneo Intelligence in London.
Wolfango Piccoli, the co-president of Teneo Intelligence in London, said: “They are both led by young and ambitious leaders who share prime-ministerial ambitions. Due to mutual distrust, it has taken both parties over 70 days to reach a deal and choose an unknown third figure as prime minister.”
Their shared agenda includes taking a far tougher line on migrants, including a plan to open new detention centres across Italy. They have also proposed plans to cut taxes, scrap a previously agreed pension plan, and institute a “universal basic income”.
Their shared agenda includes plans to cut taxes, scrap a previously agreed pension plan and institute a “universal basic income”.
While many officials in Brussels sought to ease tensions with Rome this week, and came to the defense of Mattarella after the president took a political risk by defending Italy’s role in the EU, a top official on Thursday issued a tough critique of Italy.
While many officials in Brussels sought to ease tensions with Rome this week, and backed Mattarella after the president took a political risk by defending Italy’s role in the EU, Jean-Claude Juncker, the president of the European commission, a issued a tough critique of Italy on Thursday. He said Italians needed to work harder, be less corrupt and stop looking to the EU to rescue the country’s poor regions.
Jean-Claude Juncker, the president of the European commission, said Italians need to work harder, be less corrupt and stop looking to the EU to rescue the country’s poor regions.
“Italians have to take care of the poor regions of Italy. That means more work, less corruption, seriousness,” Juncker said. “We will help them as we always did. But don’t play this game of loading with responsibility the EU. A country is a country, a nation is a nation. Countries first, Europe second.”
“Italians have to take care of the poor regions of Italy. That means more work; less corruption; seriousness,” Juncker said. “We will help them as we always did. But don’t play this game of loading with responsibility the EU. A country is a country, a nation is a nation. Countries first, Europe second.”
Additional reporting by Daniel Boffey in Brussels
Additional reporting by Daniel Boffey in Brussels
Italy’s anti-establishment political leaders, Matteo Salvini and Luigi Di Maio, have reached a deal to resurrect their proposed coalition government, averting the prospect of a new snap election that had rattled global markets.
“All the conditions have been fulfilled for a political, Five Star and League government,” Di Maio, the Five Star chief, and Salvini, the League leader, said in a joint statement on Thursday after several hours of talks in Rome.
Giuseppe Conte, a law professor close to Five Star, remains the coalition’s pick for prime minister, the leaders said, confirming the candidate torpedoed four days ago after the head of state rejected the parties’ choice for economy minister.
Giovanni Tria, a little known economics professor, will get the key economy ministry job, party sources said, replacing the Eurosceptic economist Paolo Savona, who had been vetoed by the president, Sergio Mattarella.
Global financial markets have been recovering over the past two days after tumbling earlier this week over the spectre of a new Italian election dominated by debate over the country’s future in the eurozone.
Tria, a professor at Rome’s Tor Vergata University, has been critical of the EU’s economic governance, but unlike Savona he has not advocated a “plan B” to prepare Italy’s possible exit from the currency bloc.
In recent articles he has called for a change in the EU’s fiscal rules to allow public investments to help growth and, like many mainstream economists, has criticised Germany’s persistently large current account surplus.
“Maybe finally we have made it, after so many obstacles, attacks, threats and lies,” Salvini said on Facebook shortly after the deal was announced.
After the initial coalition attempt failed, Mattarella asked Carlo Cottarelli, a former International Monetary Fund official, to form a stop-gap government of experts to lead the country to elections. But Cottarelli failed to present a cabinet and received no support from any of the major parties.
Cottarelli said he was going to see the president later on Thursday and is expected to formally give up his mandate.
Assuming the new government gets a green light from Mattarella, Salvini will be the interior minister and Di Maio will take a powerful, newly created joint ministry made up of the labour and industry portfolios, the parties said.
Enzo Moavero Milanesi, a former EU affairs minister under the technocratic government of Mario Monti, will be foreign minister, while Savona, after his ousting as economy minister, gets the consolation prize of EU affairs minister.
There has been a general calming of financial markets after Tuesday’s rout, when investor concerns prompted the biggest one-day rise since 1992 in Italian two-year bond yields and dented the euro’s exchange rate.
