Italian Opposition Ready to Talk About Alliance With Five Star

(Bloomberg) -- Italian President Sergio Mattarella begins intensive talks with political leaders Wednesday to determine whether a new ruling coalition is viable, as the head of one of the country’s main parties signaled willingness to explore a new parliamentary majority.

An alternative government is one of two main options emerging for the head of state after Prime Minister Giuseppe Conte resigned Tuesday, little more than a year after taking over a populist alliance of the League Party and the Five Star Movement. The other is to set a date for a new election, which could lead to Matteo Salvini, leader of the anti-immigrant League, becoming prime minister.

Mattarella, who has the sole power to appoint governments and call elections, is ready to give Five Star and the center-left Democratic Party, or PD, time to strike a deal, although the extension would be days rather than weeks, newspaper Corriere della Sera reported.

“It is now our turn to move and show the way ahead,” PD leader Nicola Zingaretti said on Wednesday. “We should be open to seeing if there is the possibility of a new parliamentary majority able to address the issues the country faces.”

Click here for a guide to what happens next in Italy’s political crisis

Italian stocks rallied with bonds as investors focused on the prospect of new government that could prevent fresh elections. Ten-year bond yields dropped for a second day, and the yield spread over Germany, a key gauge of risk, was at 200 basis points, a two-week low.

Consultations with Mattarella will start at 4 p.m. in Rome, though talks with the bigger parties aren’t due until the following day. The PD also holds an internal meeting Wednesday, where it’s expected to discuss the party’s line on discussions with Five Star.

In a belligerent address to parliament, Conte declared Tuesday that the coalition featuring Salvini’s League was dead. But he could still return as the head of another majority if Mattarella judges it could offer some stability to the country.

Italian Opposition Ready to Talk About Alliance With Five Star

Salvini, 46, pulled his support from the governing alliance with the anti-establishment Five Star this month, seeking to cash in on strong poll ratings and attempting to wrong-foot the political establishment with a mid-summer power grab while parliament was in recess.

In Conte’s fiery appearance in the Senate Tuesday, he left no one in any doubt as to who he blames for the demise of his government.

Conte charged that the League leader’s demand for an election was self-interested and irresponsible. With Salvini sitting alongside him in parliament, he took his nemesis to task for his non-stop campaigning, saying it isn’t in Italy’s interest to hold elections every year.

The premier also accused his deputy of not properly responding to allegations in the so-called Russiagate case and said he had overstepped his role as minister.

Salvini countered that the unruly coalition, which lasted just over a year, wasn’t brought down by him but by the fictitious “Signore No” he likes to invoke to demonstrate inactivity and inertia among his political enemies.

“I’d do it all over again if I had another chance,” Salvini told Senators.

Salvini also claimed the League is ready with a 50 billion-euro ($55 billion) budget plan that will allow for tax cuts and more spending, and ridiculed Five Star for considering an alliance with the PD -- a group they’ve spent years attacking.

©2019 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.