Italy Populists Close in on Government Pact, Silent on Premier

(Bloomberg) -- Italy’s winning political forces closed in on a government accord in meetings on Saturday, but still left open the question of who’s going to lead it.

A face-to-face meeting of League party chief Matteo Salvini and Five Star Movement head Luigi Di Maio resulted in “substantial agreement on the key points” of a potential governing plan, including the issue of taxes, Salvini said following the talks in Milan.

The two sides plan to wrap up talks on the joint program on Sunday, Salvini said, with the question of who’ll be proposed to President Sergio Mattarella as prime minister still unresolved. “We spoke about themes, not names,” the League leader said, echoing comments from Di Maio before the talks started.

The issues discussed in the government plan include conflict-of-interest legislation and the fate of the Ilva steelworks in the Puglia region, which Salvini wants to keep from closing. He also said he hopes that an accord with Five Star won’t spell the breakup of the center-right coalition he shares with former Prime Minister Silvio Berlusconi’s Forza Italia party and the Brothers of Italy party led by Giorgia Meloni.

“I am a spokesman for a coalition that does not include only the League,” Salvini said after the meeting. “If we can do all this together, I will be happy.”

Policy Draft

Officials from the anti-establishment Five Star and anti-immigration League parties completed a joint policy draft called “Contract for the Government of Change” ahead of the leaders’ meeting. No details of the program were disclosed.

In talks held on Friday, the two leaders found “many points of agreement” on topics ranging from 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 told reporters.

Five Star, founded as a web-based organization in 2009, will ask its supporters for their opinion on the government program they’re hashing out, he added.

Berlusconi Back?

Berlusconi, the former prime minister who paved the way for the talks when he said that he wouldn’t oppose a Five Star-League coalition government, won an appeal against a Milan court’s ban on his seeking public office.

If there’s another election, the 81-year-old, who was convicted of tax fraud in 2013, will be free to run for the lower house of Parliament or the Senate, Corriere della Sera newspaper reported on Saturday, citing a judicial ruling on Friday.

Di Maio and Salvini had promised the president, whose job it is to appoint a prime minister, that they’d tell him the results of their talks on Sunday. The Five Star leader indicated that the discussions may extend into next week.

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

Premier Favorites

The flat tax that the League says will help businesses and individuals, the citizen’s income plan advocated by Five Star, and a pledge by both for pension reform, have fueled investors’ concerns that their agenda would 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, 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.

Potential populist premiers tipped by the Italian media include Giampiero Massolo, chairman of shipbuilder Fincantieri SpA and formerly head of Italy’s 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 to form a government, Mattarella plans to name a non-partisan prime minister to head of what he calls “a neutral government.” But both the populist parties have said they’d reject such a solution in a vote of confidence in parliament. That would trigger new elections as early as July.

To contact the reporters on this story: John Follain in Rome at jfollain2@bloomberg.net, Ross Larsen in Rome at rlarsen2@bloomberg.net.

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Ros Krasny, Jerrold Colten

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