Italy's Populists Closer on Policies; Premier Still Enigma

(Bloomberg) -- Italian populist leaders Luigi Di Maio and Matteo Salvini pushed their head-to-head bargaining for a new government into the weekend, leaving the choice of premier unresolved as a court lifted a ban on Silvio Berlusconi running for public office.

Di Maio of the anti-establishment Five Star Movement and Salvini of the anti-immigrant League completed a draft for a joint policy agenda after discussions in Milan on Saturday. The plan is being reviewed and no details were disclosed.

“We’re making considerable steps forward with the government program,” Di Maio told reporters in Rome after his talks with Salvini. The two parties were finding “many points of agreement” on a citizen’s income for the poor, a flat tax, pension reform, “the issue of countering the business of immigration,” and regulating conflicts of interest, Di Maio added.

“Let’s hope we reach a deal as soon as possible, because otherwise we hold new elections,” said Di Maio. “We didn’t talk about the name of the premier.”

Five Star, founded as a web-based organization in 2009, will ask its supporters for their opinion on a government contract, he added.

Ex-premier Berlusconi, 81, Salvini’s junior partner in a center-right alliance, won his appeal of a ban from seeking office that was made at a Milan court. Berlusconi, who was convicted of tax fraud in 2013, is now free to run for the lower house of Parliament or the Senate, newspaper Corriere della Sera reported on Saturday, citing a Friday judicial ruling. Berlusconi said on May 9 that he would not veto a Five Star-League government.

Giorgia Meloni, leader of the small far-right Brothers of Italy party, said Di Maio asked her at a meeting on Friday to support him or another Five Star premier in exchange for allowing her group to join the government, adding that she refused. Five Star officials denied the account, newswire Ansa reported.

Sunday Briefing

Di Maio and Salvini have promised President Sergio Mattarella, whose task it is to name a prime minister, to tell him the result of their talks on Sunday. If they reach agreement on a premier, ministers and a program, Mattarella could ask their choice of leader to try to form a government on Monday or Tuesday.

A populist government could be sworn in a few days later, before facing a vote of confidence in both houses of parliament. Salvini’s center-right alliance led Five Star in March 4 elections, which resulted in a hung parliament.

The flat tax that the League wants to help businesses and individuals, the citizen’s income advocated by Five Star, and a common pledge for pension reform have fueled investors’ concerns that their agenda could weigh on the euro zone’s third-biggest economy, already burdened by a massive debt pile.

Salvini wrote in a Facebook post that he was working to cancel a pension law that raised the retirement age, to cut taxes and bureaucracy, as well as to reduce the number of immigrants who reach Italy’s coast from North Africa “and increase expulsions.” He said he also wanted to “defend Italy” in the European Union.

Premiership Favorites

Just who would lead a populist government has yet to be decided. Potential premiers tipped by the Italian media include Giampiero Massolo, chairman of shipbuilder Fincantieri SpA and formerly at the head of the secret service; senior League lawmaker Giancarlo Giorgetti; and Elisabetta Belloni, secretary-general at the Foreign Ministry.

Di Maio and Salvini could serve as deputy premiers, with Di Maio also as foreign minister and Salvini as interior minister.

If Di Maio and Salvini fail, Mattarella plans to name a non-partisan premier at the head of what the president calls “a neutral government” but both the populist parties have said they would reject such an administration in a vote of confidence in parliament. That would trigger new elections as early as July.

To contact the reporter on this story: John Follain in Rome at jfollain2@bloomberg.net.

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Kevin Costelloe, Ross Larsen

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