Salvini Threatens Italy Government Collapse If Deficit Changed

(Bloomberg) -- Italy’s Deputy Prime Minister Matteo Salvini, enjoying a steady climb in public opinion polls, said he would bring down the government if the coalition’s budget deficit target was changed.

The remarks by Salvini were quoted by newspaper La Repubblica hours before the country’s prime minister, Giuseppe Conte, was scheduled to make an attempt in Brussels to convince the European Commission that the country’s budget is sound. That includes the 2.4 percent deficit goal for 2019 that has become a lightning rod for Commission objections.

“The 2.4 percent deficit target can’t be touched, otherwise I will bring down the government,” Repubblica quoted Salvini as saying in a telephone call to Conte. The report said Salvini was willing to make only minor concessions in next year’s spending plan.

Italy’s budget plans and spat with the European Union have roiled its bond and stock markets in recent weeks. Salvini has steadily pulled ahead of the country’s other deputy premier, Five Star Movement head Luigi Di Maio, as the public face of hardline opposition to the EU.

Salvini’s League party rose to 36.2 percent in voter intentions in November, the fourth straight poll showing an increase, according to an Ipsos survey in newspaper Corriere della Sera. Five Star, which emerged as the biggest single party in March’s general election, slipped to 27.7 percent this month, from 28.7 percent in October.

Di Maio, meanwhile, ruled out shrinking the number of people who would benefit from the government’s welfare and pension reforms, though he reiterated the government would look at ways to cut more waste and raise money by selling some key assets, according to news agency Ansa. He is in agreement with Salvini on possibly shifting up to 4 billion euros ($4.5 billion) from other parts of the budget for more investments, according to La Repubblica.

Conte might propose an adjustment in the country’s planned “citizen’s income” program to have the money paid to businesses to train potential workers, newspaper La Stampa said.

--With assistance from John Follain.

To contact the reporters on this story: Kevin Costelloe in Rome at kcostelloe@bloomberg.net;Sonia Sirletti in Milan at ssirletti@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Neil Chatterjee, Nicholas Larkin

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