Italy's Coalition Reaches Accord on Rome Relief Amid Infighting

(Bloomberg) -- Both halves of Italy’s ruling coalition claimed victory after reaching a compromise on debt relief for the city of Rome in an acrimonious late-night Cabinet meeting that exposed new fissures in the government.

Tempers flared as disagreements over the debt plan threatened to once again delay approval of a broader set of measures to stimulate growth. Italian media reported that Deputy Prime Minister Luigi Di Maio of the Five Star Movement angered his ally and sometime rival, Matteo Salvini of the League, by showing up late for the meeting in order to make a television appearance.

Lawmakers on both sides have speculated that the coalition’s days are numbered, though Salvini repeated several times last week that he’s not seeking early elections and that the government will serve out its full term. In just under one year governing together, Salvini and Di Maio have clashed over issues including migration, security and more recently the way Rome is run under Mayor Virginia Raggi of Five Star.

Salvini, who has resisted what he calls special treatment for the capital, is “satisfied” with the Cabinet’s decision to remove parts of the debt plan from the growth decree, his spokeswoman said by text message.

Di Maio called the measures a “start” in the process of offering aid to the city, according to comments cited by Corriere della Sera. Rome has about 12 billion euros of debt under special administration.

Salvini’s Lead

In the run-up to European Parliamant elections next month, Salvini’s League has opened up a lead of almost 15 percentage points over Five Star, according to an Ipsos Italia poll published Sunday. Support for the party reached 36.9 percent, its highest since the 2018 national election.

In the overnight meeting, the Cabinet also passed rules entitling depositors to recoup lost savings from bank failures and a measure to allow the Treasury to become a shareholder in bankrupt airline Alitalia SpA.

Separately, Di Maio, who also serves as economic development minister, signed a decree to appoint three new administrators for the Ilva steel plant in the south of Italy that was bought by ArcelorMittal last year.

Debt Relief

Raggi has been a punching bag for critics on the right including the League, who’ve skewered her administration for alleged incompetence. Salvini and the Rome mayor exchanged barbs over poor garbage collection in the city and a report in magazine L’Espresso that said she urged the former head of trash removal to alter his accounts.

Di Maio has pushed for financial help for the Rome, claiming it won’t cost taxpayers money and noting that much of the debt dates back to previous administrations. The League says the rest of the country shouldn’t pay the price for the city’s mismanagement.

Agreement on the so-called Growth Decree had been held up as the two parties quibbled over the plan for Rome and a corruption investigation into a senior economic adviser to Salvini. Di Maio kept the heat up in a Tuesday La 7 television appearance, saying it’s “unacceptable” that the adviser, Armando Siri, remains in the government.

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