The 10 Most Important People in Italy Worth Watching Right Now

(Bloomberg) -- Italy’s determination to deepen its budget deficit next year is driving up the government’s borrowing costs and setting it on course for a clash with the European Union.

Finance Minister Giovanni Tria on Wednesday said he’s worried about the market selloff that’s seen 10-year yields reach their highest level in four years. But Tria is just one of the officials whose comments have buffeted markets during the budget process.

These are the people that traders really need to pay attention to in the weeks ahead.

Matteo Salvini

The 10 Most Important People in Italy Worth Watching Right Now

Age: 45
Job: Deputy prime minister, head of the League
Role: Political rainmaker

The right-wing firebrand is currently the most powerful person in Italy and arguably the smartest political operator. He seized ownership of the campaigns against immigration and the European Union to more than double his support since election day in March. But he’s let others take the lead on the deficit, perhaps because his core supporters in the industrial north are uneasy about all the new spending on the poor it will support.

Luigi Di Maio

The 10 Most Important People in Italy Worth Watching Right Now

Age: 32
Job: Deputy prime minister, head of the Five Star Movement
Role: Spender-in-chief

Salvini’s key ally and political rival probably has more at stake than anyone in the budget battle. He’s been consistently outmaneuvered by his coalition partner since they took office and needs a big win to shore up his support. His key policy is the so-called citizen’s income
which is set to cost as much as 10 billion euros ($12 billion) next year. He’s been the loudest voice calling for a wider deficit, so if he changes tack, it may be a sign that the government is ready to retreat.

Giovanni Tria

The 10 Most Important People in Italy Worth Watching Right Now

Age: 70
Job: Minister of economy and finance
Role: Holds the purse strings

The academic, moderate, pro-European finance minister was essentially imposed on the populist coalition as a condition for letting it take power. Ever since then, he’s been fighting a losing battle to contain the government’s spending plans. The point of Tria though isn’t to win, he just has to hang on as a brake on his colleagues wilder ambitions. Any sign he might quit or be forced out would be badly received by investors.

Sergio Mattarella

The 10 Most Important People in Italy Worth Watching Right Now

Age: 77
Job: President of the Republic
Role: Voice of moderation

The Italian head of state has a limited range of powers and anything that looks like interference in partisan politics is highly risky. Since the creation of the coalition he’s highlighted the constitutional constraints on the government. His warnings helped convince the administration to lower their deficit targets for the years after 2019, according to newspaper reports.

Mario Draghi

The 10 Most Important People in Italy Worth Watching Right Now

Age: 71
Job title: President of the European Central Bank
Role: Pays the piper

The most powerful Italian in global finance is the architect of the quantitative-easing program that has held down Italy’s borrowing costs—the ECB and the Bank of Italy have been the only net buyers of Italian government bonds over the past four years, according to analysts at Nordea Bank. Draghi warned last month that the coalition’s stance is already pushing up borrowing costs for both companies and consumers. He’s been reaching out to senior officials including Mattarella since then, according to press reports.

Giancarlo Giorgetti

The 10 Most Important People in Italy Worth Watching Right Now

Age: 51 
Job: Cabinet undersecretary
Role: Eminence grise

Salvini might have provided the charisma that powered the rise of the League, but Giorgetti is the strategist helping him navigate the minefield of Italian politics. Twenty-two years in parliament have given him deep links with the Italian elite and a keen instinct for how the political system operates. One of a handful of politicians chosen by former President Giorgio Napolitano’s council of wise men after the inconclusive elections in 2013, he’s one of the people whom Draghi calls when he wants to speak to Rome, according to the Italian press.

Laura Castelli

The 10 Most Important People in Italy Worth Watching Right Now

Age: 32
Job: Deputy finance minister
Role: Firebrand insider

Elected to the Chamber of Deputies with Five Star in 2013, she was among the chosen few involved in drafting the coalition deal. A strong supporter of the citizen's income, she put pressure on Tria to set money aside for the measure. Castelli started her political career in the environmental movement fighting against the high-speed train line with France, but quickly moved to the Five Star. Right-wing newspaper Libero defined her as “the communist Grillo supporter who will make the budget explode.”

Claudio Borghi

The 10 Most Important People in Italy Worth Watching Right Now

Age: 48
Job: Head of budget committee for the lower house and senior adviser to the League  
Role: Twitter agitator

As one of the most prominent euroskeptics in Salvini’s party, Borghi serves as an outrider of sorts for his leader. His comments are often eye-catching and can move markets in the short term, but he doesn’t represent the party’s central policy agenda. He’s said many times that Italy would fare better outside the euro, though he insists that’s not on the agenda. He dreamed up the idea of a parallel currency that alarmed investors in the spring and has called on the ECB to shield Italian bonds from speculators.

Paolo Savona

The 10 Most Important People in Italy Worth Watching Right Now

Age: 82
Job: European Affairs Minister
Role: What might have been

Savona was the coalition’s original pick for finance minister and was vetoed by President Mattarella because of his euroskeptic views. He had repeatedly urged the Italian government to plan for a euro-exit and has criticized what he says is German dominance over Europe. Since becoming EU affairs minister, charged with defending Italy’s views on Europe governance in Brussels, he’s toned down his anti-euro rhetoric and pushed for an investment program.

Giuseppe Conte

The 10 Most Important People in Italy Worth Watching Right Now

Age: 54
Job title: Prime minister of Italy
Role: Ceremonial figurehead

The premier is formally in charge of the government’s decision-making, but Salvini and Di Maio, who control the parliamentary majority, have been taking the lead so far. He has defended the administration’s tax and spending plans for next year but few people pay much attention.

©2018 Bloomberg L.P.