Italy’s Gentiloni Seeks Clue to his Survival in Senate Vote

(Bloomberg) -- Italian Prime Minister Paolo Gentiloni is about to find out just how long his new government can hope to last when he faces a confidence vote on Wednesday in the Senate.

On Tuesday night, Gentiloni won the backing of the lower house, where his Democratic Party and its allies have an absolute majority. But in the 320-member upper house the ruling party only has 113 seats and its junior allies 29 votes. That means that Gentiloni will depend on support from fickle senators who could change their mind at any point.

One of them, Denis Verdini, is a defector from Silvio Berlusconi’s Forza Italia and his center-right faction gave ex-premier Matteo Renzi critical backing in recent months. However, Verdini has indicated Gentiloni should not expect the same favor. For now, Renzi’s former foreign minister should expect to squeak by, partly because some of the Senators may abstain from voting and save their fire for a later time.

“I think Gentiloni will make it,” said Sergio Fabbrini, director of the school of government at Luiss University in Rome. ”But from now on, he will have to struggle with a Senate majority which is smaller than Renzi’s was -- it’s another reason why he may last only until the summer.”

Poor Photocopy?

Gentiloni was sworn in as prime minister on Monday night and must now battle the perception that he isn’t -- as the opposition parties claim -- a poor photocopy of his predecessor, who stepped down following defeat in a constitutional referendum.

Italy may be headed for another referendum after the Constitutional Court agreed to review a union request for a plebiscite on Renzi’s 2014 labor reform. The court will review on Jan. 11 the call for a referendum on the landmark Jobs Act, a court official said Wednesday. The legislation made it easier for businesses to hire and fire.

In front of lawmakers on Tuesday, Gentiloni tried to convey his government was prepared to support Italy’s troubled banks and boost an economic recovery he described as still too weak. Gentiloni, 62, said the European Union must not be “too severe” in imposing austerity, and that its members must share the burden of the migrant crisis.

Banca Monte dei Paschi di Siena SpA will be an early headache for Gentiloni and his Finance Minister Pier Carlo Padoan. The lender is running out of time to complete a capital increase, raising the prospect of a state rescue that would likely impose losses on retail investors.

Little Growth

A stagnant economy constantly flirting with recession is another sticking point that will need to be addressed along with the debt load, Europe’s second biggest after Greece. Padoan, a former chief economist for the Organization for Economic Cooperation and Development, abandoned in September a promise to reduce the public debt.

Gentiloni said he was ready to collaborate with the administration of President-elect Donald Trump and plans to attend the EU summit of leaders Thursday in Brussels. The question remains how long will he remain in charge in an increasingly poisonous political climate.

The anti-establishment Five Star Movement, which wants a referendum on Italy’s membership of the euro area, said it would stay away from parliament in protest at what it calls “a puppet government” manipulated by Renzi. Five Star, which also called for snap elections after Renzi’s referendum defeat, is tied with the Renzi’s Democratic Party in opinion polls.

Comic-turned-politician Beppe Grillo, co-founder of Five Star, said at a show in Genoa that from Tuesday “all our lawmakers will be out of this fake parliament and they will hold a parliament in the streets and in the piazzas.”

With his chief sponsor, Renzi, pushing for early elections in the first half of next year, Gentiloni said he leaves it to others to debate his government’s longevity.

“For us it is the constitution which matters, the government lasts as long as it has the confidence of parliament,” he said.

To contact the reporters on this story: John Follain in Rome at jfollain2@bloomberg.net, Lorenzo Totaro in Rome at ltotaro@bloomberg.net. To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Fergal O'Brien at fobrien@bloomberg.net, Flavia Krause-Jackson, Kevin Costelloe