Italy’s Di Maio Trusts Salvini to Stand by Him for Long Term

(Bloomberg) -- Deputy Prime Minister Luigi Di Maio is confident that neither his party nor his ally and sometime rival will pull the plug on their coalition government and put Italy on the path to early elections, despite recurrent tensions.

Though his anti-establishment Five Star Movement has been overtaken by its coalition partner in opinion polls and has suffered repeated body blows in regional elections, the 32-year-old Di Maio says he still has faith in his partnership with the anti-migrant League led by fellow Deputy Premier Matteo Salvini -- even if the League triumphs in European Parliament elections this spring.

“There’s no possibility of one side or the other” ditching the coalition after the European vote, Di Maio said in an interview in his wood-paneled office at the labor ministry. “There’s a government contract which must last five years, and it will.”

Di Maio is best known as party leader and deputy premier, but he also serves as labor minister and economic development minister. His two ministry offices face each other across Via Veneto, the glitzy avenue of Rome’s Dolce Vita era.

Every time Di Maio meets Salvini -- the last time was for a quick dinner on Wednesday evening along with Prime Minister Giuseppe Conte, their de facto referee -- “it’s obvious to us both that we’ll keep going. We don’t need to tell each other: ‘look, this will last five years.’ We’re working on the next five years all the time, on our plans for energy, economic development, construction sites, less bureaucracy.”

Fractious Alliance

After nine months in power, the fractious alliance is being sorely tested by Five Star’s slide in opinion polls, dismal performances in regional elections including in Abruzzo and Sardinia, and constant sniping with the League over issues from migration to security and economic policy.

Five Star won almost twice as many votes as the League in last March’s general election but Di Maio’s party has been outmaneuvered by Salvini’s anti-migrant rhetoric and social media skills. The Five Star leader is also under attack from a minority faction that’s fed up with the party’s plummeting ratings, as it trails the League by more than 10 percentage points in the most recent polls.

But Di Maio appears relaxed, joking that he’s not as obsessed “as you people at Bloomberg” by the spread between German and Italian bond yields, a key barometer of investor sentiment. His advisers keep him apprised of the spread, just “not all the time.”

Di Maio leans forward on a sofa, warming to a subject close to his heart: Italy’s first venture capital fund based on 1 billion euros ($1.1 billion) of public money. “The aim is to stop young Italians from leaving the country, and to get young foreigners to come to Italy with their ideas for startups.”

The program, set to be unveiled next week, will include tax incentives for investments by both private citizens and big investors.

‘Never Quarrel’

Di Maio also downplays the much-discussed issues with his partner and erstwhile political rival. Whatever he discusses with Salvini -- and there are plenty of areas where they’re at loggerheads -- “we never quarrel,” the Five Star leader said.

Italy’s Di Maio Trusts Salvini to Stand by Him for Long Term

“When we talk publicly about things we disagree on, we do it calmly because we’ve always admitted that we are different political forces,” Di Maio said. “But none of the issues we disagree on will bring down the government.”

Seeking to reassure foreign investors, Di Maio said the coalition has created a far more attractive investment environment than previous post-war administrations, and that the coming months will see measures to lower Italy’s debt mountain by cutting wasteful spending by the public administration.

“Governments used to be based on five or six political parties, and investors would have to deal with five Senators who held the whole government hostage,” Di Maio said. “Now, the landscape has changed, the two political forces guarantee stability because they have strong identities and they want to carry out the government contract.”

Some senior members of Salvini’s party have urged their chief to capitalize on the current poll numbers, throw aside Five Star and force early elections, though the League leader has told his lieutenants there’s no guarantee Italy’s president would trigger an early vote, according to a League government member.

For his part, Di Maio is dismissive of opinion surveys, saying they always underestimate the strength of his anti-establishment movement.

Salvini’s League is projected at 28 members in the European Parliament, up from 27 in the previous forecast and from six currently, an outlook released Friday shows. The number of seats that will be held by the group to which the League belongs remains unchanged from the last forecast at 59, up from 37 now.

“In this legislature, the majority in parliament is two-thirds Five Star lawmakers and one-third League,” Di Maio said. “We’ve never had to invoke this ratio because we’ve always worked well together, but it’s not opinion polls which decide a government’s fate.”

©2019 Bloomberg L.P.