Italy Coalition Talks Stall as Time Runs Short to Avoid Election
Italy Coalition Talks Stall as Time Runs Short to Avoid Election
(Bloomberg) -- Attempts to avoid a snap election in Italy are now riding on the future of caretaker Prime Minister Giuseppe Conte, as a deadline to reach a deal nears.
Whether or not Conte stays in his job to lead a new alliance has become the main sticking point in talks between the anti-establishment Five Star Movement and the center-left Democratic Party, or PD, according to two PD officials who asked not to be named discussing a confidential matter.
President Sergio Mattarella has given the long-time enemies time to try to forge a new pact until he holds a second round of consultations with leaders starting Tuesday.
Mattarella wants parties to report on the progress of talks by 7 p.m. Monday in Rome, Ansa news agency reported. He’s also expected late Monday to publish the schedule of the new round of talks with party leaders starting the following day.
If Five Star and the Democrats fail, that could trigger snap elections possibly in November, or a government reshuffle if Five Star and its current coalition partner, the rightist League, patch up their differences.
At stake: months of political uncertainty at a time of stagnation for Europe’s third-largest economy, with possible new tensions with the European Union over budget plans which have to be drawn up in the fall and approved by the Rome-based parliament by the end of the year. Deputy Premier Matteo Salvini of the League pulled the plug on the populist government earlier this month.
PD leader Nicola Zingaretti, along with ex-premier Paolo Gentiloni and other close lieutenants, are resisting Five Star’s insistence on retaining Conte in his post, the officials said. Matteo Renzi, another ex-premier, as well as most lawmakers in the Democratic Party, however, are in favor of Conte leading a new administration, one of them said.
Cold Water
Zingaretti poured cold water on prospects for a deal with Five Star, signaling his resistance to keeping Conte as premier. The PD leader told reporters in Rome that Italy needs “elements of discontinuity both as far as policies and the team are concerned,” Ansa news agency reported.
Any new coalition must mark a turning point, Zingaretti said, adding that efforts should be continued “respecting each others’ ideas and prerogatives.”
In another sign that the two parties are struggling to make headway in talks, Five Star officials denied an earlier Ansa report that senior lawmakers of both groups would meet Monday afternoon.
Italian bonds extended their fall, underperforming euro-area peers after the Five Star denial. The benchmark 10-year yield rose as much as 4 basis points to 1.35%, with the spread to German bunds widening to 201 basis points.
Five Star has repeatedly insisted that Conte stay on as premier, to help persuade its supporters to accept an alliance with the Democrats, their traditional foe.
Five Star’s Roberto Fico, the speaker of the lower house of parliament who was floated over the weekend as a possible contender for the premiership, intends to remain in his current role, according to another party official.
To contact the reporter on this story: John Follain in Rome at jfollain2@bloomberg.net
To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Jerrold Colten, Richard Bravo
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