Italy's Center-Right, Five Star Boost Chances of Vote Soon

(Bloomberg) -- Italy’s two biggest political forces rejected the idea of a government of technocrats in talks with President Sergio Mattarella, increasing the chances of new elections as early as July to overcome a two-month deadlock.

Center-right leader Matteo Salvini, who also heads the anti-immigrant League, demanded the head of state give him a mandate to try to form a government while Luigi Di Maio of the anti-establishment Five Star Movement rejected the option of a non-partisan administration planned to last until early next year.

Italy's Center-Right, Five Star Boost Chances of Vote Soon

“The most likely scenario now is early elections,” said Roberto D’Alimonte, a political science professor at Rome’s Luiss University. “Mattarella hasn’t found the support he needs for a government with full powers which could last until early next year. He’s unlikely to appoint Salvini because he wants a non-partisan government to handle the next elections.”

Sixty-four days after March 4 general elections led to a hung parliament, with the center-right ahead of Five Star, the head of state is still seeking a working majority for a new government. That is the second-longest search for a coalition since 1992.

July Vote

If a politically neutral premier yet to be appointed by Mattarella does not win a parliamentary vote of confidence, elections in July are “probable,” according to a senior state official who declined to be named discussing presidential strategy. Newspapers Corriere della Sera and La Repubblica reported the July date earlier.

Mattarella has been considering picking a non-partisan figure to lead an interim government with the task of pushing the 2019 budget through parliament by the end of the year, and changing the electoral system. Maurizio Martina, acting-leader of the center-left Democratic Party, said he would support an initiative by Mattarella.

“Mattarella could still try to form a government with a non-partisan premier, but it’s unlikely to win a vote of confidence and so it will just act as a caretaker until the new elections,” D’Alimonte said. “One other possibility is for current premier Paolo Gentiloni to just stay on.”

“We trust that the president will help us to find a majority, because our alliance represents ambition and the hope of 60 million Italians,” Salvini told reporters after meeting Mattarella, who held a new round of talks with all party leaders Monday. Salvini said he was confident he could form a parliamentary majority.

Exclude Berlusconi

Earlier, Di Maio reiterated an offer of a government only with the League -- excluding Salvini’s ally, ex-premier Silvio Berlusconi -- saying early elections are the only option possible if this doesn’t succeed. “The government must be a political one, we must agree on a premier but also on ministers who have a political connotation,” Di Maio said. “I don’t envisage a government of technocrats.”

Salvini and Berlusconi displayed a united front with Mattarella. Earlier, newswire Ansa said they would tell Mattarella they were against the idea of an interim government. The two party leaders had clashed over Di Maio’s proposal for a populist-led government. At a Sunday night meeting, Salvini had pushed for acceptance.

Di Maio said over the weekend that he would be willing to take a step back and let someone else be prime minister of an administration with the League. But he insisted that Berlusconi, whom Five Star considers a symbol of political corruption, should not play a role. Berlusconi is banned from holding public office until next year because of a 2013 tax-fraud conviction.

A populist-led tie-up could unsettle investors concerned about spending policies threatening Italy’s public finances and plans for more European integration. Both Salvini and Di Maio have promised spending hikes or tax cuts with only vague explanations of how they’ll finance them and they’ve also vowed to roll back previous labor-market and pension reforms.

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