Italian Democrat Says His Party Won't Help Five Star Take Power

(Bloomberg) -- Italy’s populist Five Star Movement won’t get support from the center-left Democratic Party despite the infighting that has broken out since its election defeat, according to a senior lawmaker and potential candidate for the Democrat leadership.

Dissidents who want to engage with Five Star’s Luigi Di Maio are heavily outnumbered by those who endorse the PD’s official line that it needs to spend some time in opposition, Ettore Rosato, 49, a deputy-speaker of the lower house of parliament, said in an interview in his Rome office.

“Those seeking talks with Five Star are very much in a minority,” Rosato said. “No one in our party -- apart from seven people out of 200 who abstained when the leadership voted to go into opposition -- wants us to support a Five Star government.”

President Sergio Mattarella is trying to find a way out of the political impasse after last month’s election left the parliament split between three main blocs.

Matteo Salvini, leader of a center-right alliance, could be given a preliminary mandate by Mattarella to try to form a government next week if the deadlock persists, according to a senior state official.

Mattarella could alternatively ask a parliamentary speaker -- who would not become premier -- to find out whether a majority is possible, or hold a third round of talks.

Populist Risk

The risk of a populist government has put Italy back on the radar for investors wary of campaign spending promises while the delay is hurting French ambitions to win German support for a deal to complete banking union. The Germans are wary of further risk-sharing with Italy in political limbo and its banking problems still not fully resolved.

Rosato, who comes from the northeastern port city of Trieste, said he is open to his party joining a so-called “grand coalition” of all major parties should Mattarella call for it. “If Mattarella asks for a government with everyone involved, we will listen to the president and we will see,” Rosato said.

Mattarella’s Challenge

Rosato’s comments complicate the challenge facing Mattarella as he seeks to conjure up a working majority in a second round of talks with party leaders on Thursday and Friday. Di Maio has offered to govern with the PD or with Salvini’s anti-migrant League.

The search for a government is stalled both by policy disagreements and clashes over who should be prime minister between Di Maio, Salvini, and ex-premier Silvio Berlusconi whose Forza Italia party is a junior partner in the center-right. The center-right is the biggest bloc after the March 4 elections, while Five Star is the biggest single party.

As Rosato himself put it: “Five Star doesn’t want Forza Italia, the League doesn’t want the PD and the PD doesn’t want Five Star or the League. So a government including everyone looks like a pretty tough job.”

Adding to the political uncertainty, the PD has been torn by quarreling since its worst-ever electoral result over a month ago and faces a leadership battle after ex-premier Matteo Renzi quit as party head. Rosato said a new leader may be elected at an assembly on April 21, or through primaries in the fall.

Third Round Possible

Rosato, who is close to Renzi, didn’t rule out standing for the leadership. He said he didn’t think that Renzi would stand again.

Rosato predicted that Mattarella will need a third round of consultations before he settles on a candidate for prime minister, though he said he’s confident a government will eventually emerge without the need for new elections.

“Financial markets have no need to worry about Italy,” Rosato said. “Even if it’s a Five Star-League government, there won’t be an explosion in public spending because they realize they can’t do the antics they promised during the campaign, things like euro-exit, a citizen’s income, and scrapping pension reform.”

“A Five Star-League government won’t do many reforms,” he added. “It will be unproductive but it will last because they are very, very thirsty for jobs-for-the-boys.”

PD divisions resurfaced at a meeting of lawmakers Tuesday, with Dario Franceschini, culture minister in the outgoing government, saying the party should talk to Five Star because “a Di Maio-Salvini government would be a nightmare for Italy.” The meeting ended without a vote and officials agreeing to continue their discussions after Mattarella’s talks.

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