(Bloomberg) -- Italy’s two populist parties agreed on a prime minister, sealing a government deal amid a warning by France to avoid putting the euro area’s stability at risk.
With the anti-immigration League and the Five Star Movement set to propose a cabinet to President Sergio Mattarella as early as Monday, Florence University law professor Giuseppe Conte emerged as a possible premier. League head Matteo Salvini and Five Star leader Luigi Di Maio held off on making names public before meeting the head of state.
“We closed the deal this morning on the candidate for premier and ministers, so we are ready to get started,” Salvini said in a video posted on his party’s Facebook site after he and Di Maio met on Sunday.
Eleven weeks after a general election, the endgame followed a week of turmoil in Italian bonds and stocks triggered by reports about the coalition’s spending plans and rejection of European Union budget rules. The 10-year yield spread over German bonds ended Friday at 165 basis points, the most since October, prompting a word of caution from Paris.
“If the new government took the risk of not respecting its commitments on debt, the deficit and the cleanup of banks, the financial stability of the entire euro zone will be threatened,” French Finance Minister Bruno Le Maire said Sunday in an interview with Europe 1 radio.
Salvini fired back on Twitter, suggesting the warning was “unacceptable” interference. “Italians first!” he said.
Di Maio said the cabinet lineup, if approved by the president, would include a joint minister of economic development and labor to be headed by Five Star. The post could go to Di Maio himself, while Salvini is to be proposed as interior minister and Conte is the nominee for prime minister, Corriere della Sera newspaper said, citing people if didn’t identify.
Read more about the populist policy program here
The League gave Italians a say on the draft coalition platform this weekend at party-organized events across the nation, though it boiled down the 58-page agenda to just one page and 10 key areas, omitting the anti-establishment Five Star’s top policy plank: a minimum income for poorer citizens.
Five Star supporters backed the coalition pact by a 94 percent majority on Friday in an online ballot organized by the party.
While Five Star emerged as the biggest single party in the general election on March 4, the League was part of a center-right alliance that won the most seats overall. Both leaders claimed the right to head the next government -- a dispute that’s dogged their effort to form a coalition ever since.
The League’s description of the program includes scrapping a pension reform that raised the retirement age, blocking immigrants arriving on Italy’s coasts and a flat tax for families and companies. There’s no mention of a “citizen’s income” for the poor at 780 euros ($920) a month, a flagship Five Star promise that the League denounced as a handout during the election campaign.
©2018 Bloomberg L.P.