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Italy’s Conte Holds Off Salvini Challenge in Local Elections

Italy’s Left Clings to Tuscan Stronghold, Exit Polls Show

Italian Prime Minister Giuseppe Conte saw off a challenge from opposition rival Matteo Salvini in local elections, strengthening the premier’s grip on his quarrelsome coalition ahead of negotiations over the European Union’s recovery fund.

Parties in Conte’s year-old alliance, led by the anti-establishment Five Star Movement and the center-left Democratic Party, held on to three regions including the leftist bastion of Tuscany and Puglia in the south, in elections held Sunday and Monday, according to projections by Consorzio Opinio Italia for Rai state television.

Italian bonds rose on Monday, with the yield on 10-year debt falling as much as 6 basis points.

Voters further bolstered the Rome-based government as a nationwide referendum overwhelmingly backed cutting the number of seats in parliament from 945 to 600. That measure, a flagship pledge of Five Star, erases any risk of a snap vote, as constituencies and the electoral system will now have to be overhauled.

Italy’s Conte Holds Off Salvini Challenge in Local Elections

The outcome of the regional voting helps shore up Conte, the target of criticism from allies who accuse him of being sluggish on reforms and of centralizing power during the coronavirus pandemic.

The premier can now focus on trying to pull Italy out of its worst recession in living memory, as well as on investment projects for the country’s expected 209 billion-euro ($245 billion) share of pandemic recovery grants and loans from the EU.

The center-left bloc won 49% of the vote in Tuscany -- the one region where Salvini picked the alliance’s candidate -- against 40% for Salvini’s center-right. Marche in central Italy was the only region Salvini’s nationalist alliance managed to wrest away from the center-left, though his bloc held on to two other regions it already controlled.

Despite the results, the windfall from the EU is likely to trigger more infighting between allies in Conte’s coalition, as they push their pet projects. Minority factions may continue to press for a limited government reshuffle, but Conte’s position appears secure, given the political benefits from the infusion of EU funds and fears of propelling Salvini to the premiership if new elections were held.

The government forecasts that Italy’s gross domestic product, hit by a severe national coronavirus lockdown, will contract by 8% this year.

In the regional voting, Giorgia Meloni’s far-right Brothers of Italy achieved mixed results in its battle to gain ground on ally Salvini, whose party remains Italy’s most popular, according to national opinion polls. A center-right candidate chosen by Meloni won in traditionally left-leaning Marche, while a candidate she picked for the Puglia region was defeated.

Meloni’s party has in recent years overtaken ex-premier Silvio Berlusconi’s Forza Italia group to become the second force in the center-right alliance, credited with about 15% of the vote in national surveys.

©2020 Bloomberg L.P.