Italy’s Renzi May Seek New Finance Minister to Back Conte

Former Italian Premier Matteo Renzi is pushing for Finance Minister Roberto Gualtieri to be replaced as part of an attempt to forge a new coalition government led by Prime Minister Giuseppe Conte, according to people familiar with the talks.

Renzi brought down the Conte-led government by pulling out of the coalition earlier this month. The move ultimately forced Conte to resign because he didn’t have a majority in the Senate. But Conte is trying to convince President Sergio Mattarella, the head of state responsible for the next steps, that he can pull together a new administration.

Conte and Renzi have a personal antipathy for each other and are involved in a high-stakes power tussle that has left the country without a functioning government in the middle of a drawn-out pandemic and a devastating recession. For investors, Gualtieri is a guarantee of stability with deep ties to the European Union’s policy makers, so his removal would be a worry.

The question is whether Conte will cede power over the country’s finances to Renzi, who wants a greater say over how Italy should spend its share of the EU’s recovery fund and is alarmed by the increased state interventions in the economy. Renzi’s Italy Alive party is tiny but, given the parliamentary math, has some leverage over Conte in the current negotiations.

Italy’s Renzi May Seek New Finance Minister to Back Conte

Asked about the rumors in a late-night news conference, Renzi said: “We do not want to ask for a ministry, but had we done so, we would have obtained it.”

He reiterated those sentiments in an interview published by Corriere della Sera on Sunday. “We all know Italy won’t vote before 2023,” he added.

Renzi’s Cards

The following people, all with close ties with Renzi, have been floated as possible replacements: lawmakers Luigi Marattin and Maria Elena Boschi as well as the head of state revenue agency, Ernesto Maria Ruffini. Renzi is a passionate supporter of the EU project. The problem investors will have is if the role of the Treasury gets bartered in the excessive politicking.

The outgoing premier remains a favorite to lead a new government, after Five Star, the biggest party in parliament, lobbied for his return during its talks with the president.

The Democratic Party also said Saturday they would back Conte. Five Star has signaled they are willing to patch up their alliance with Renzi. The center-right leaders are instead calling for early elections.

©2021 Bloomberg L.P.

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