Five Star Ready to Discuss Italy Government Plan With League

(Bloomberg) -- Italy may be at a turning point to end a two-month political deadlock as Five Star Movement leader Luigi Di Maio signaled he’s ready to give up his quest to be prime minister as a way to begin talks with the League’s Matteo Salvini on forming a government.

“I want to do a political government with the League based on some points,” Di Maio said Sunday in an interview on broadcaster RAI. “If Di Maio as premier is the obstacle,” then let’s choose together another prime minister, he said.

Five Star Ready to Discuss Italy Government Plan With League

Di Maio, 31, is making a last bid to form a “political government” before President Sergio Mattarella begins a final round of meetings with the parties after an inconclusive general election in March.

Mattarella will meet with party delegations on Monday at the Quirinale Palace in Rome. He will ask them if the stalemate that has kept the three main parties -- Five Star Movement, the center-right and the center-left -- from forming a government has been overcome, said a senior state official who declined to be named citing the confidential nature of the talks.

Five Star’s offer divided the center-right coalition as former Premier Silvio Berlusconi and Salvini clashed at a meeting in Rome Sunday night, Corriere della Sera reported. Salvini failed to convince center-right partner Berlusconi to accept that his party would be left out of the talks, the Italian daily said. The leaders will meet again Monday morning before going to see the president, Corriere reported.

Monday Showdown

The president may ask the parties to back a transitional government led by a non-partisan figure if the center-right coalition refuses Di Maio’s last attempt. Such a government would stay in power long enough to accomplish a few set goals such as passing a new electoral law. A quick approval could lead to a vote as early as September. Otherwise, the temporary government will have to act on the 2019 budget by year-end, and further delay elections.

On Thursday, the European Union warned that Italy’s political deadlock poses a growing threat to the country’s economic recovery.

“Risks to the growth outlook have become more tilted to the downside,” the EU’s executive branch said in its spring economic forecasts. “Policy uncertainty has become more pronounced and, if prolonged, could make markets more volatile and affect economic sentiment and risk premia.”

Failed Attempts

General elections on March 4 failed to produce a majority for any party, with the center-right led by Salvini’s League winning the most seats, while Di Maio’s Five Star emerged as the single biggest party. Mattarella has been trying to find a viable majority ever since.

Five Star Ready to Discuss Italy Government Plan With League

A first attempt to form a government between Five Star and the center-right coalition failed after Di Maio refused to include former premier Berlusconi’s Forza Italia party in the deal, and Salvini stuck with his center-right bloc partners and refusing to strike a separate deal with Five Star. Di Maio asked Berlusconi to take a step back as he and Salvini are now doing, in the interview.

The Five Star leader reiterated his party will not support any other government and the only alternative is to hold a new election as early as July.

Polling group Youtrend compiled an average of voting intention surveys on May 3 which showed Five Star at 33.6 percent, compared with 32.7 percent in March elections. The League has gained 4 percentage points since the elections while Berlusconi’s Forza Italia has lost about 2 points.

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