Italy’s Embattled Conte Readies $39 Billion in New Stimulus
Italy’s Embattled Conte Readies $39 Billion in New Stimulus
(Bloomberg) -- Italian Prime Minister Giuseppe Conte on Wednesday won lawmakers’ backing for 32 billion euros ($39 billion) of extra spending as he tries to consolidate support for what’s now a minority government.
In separate votes, the two houses of parliament approved a government request to widen the country’s deficit, allowing the government to raise fresh funds to fight the pandemic and refund businesses hurt by virus restrictions.
Conte was forced to face confidence measures Tuesday after he lost the support of a small party led by ex-Premier Matteo Renzi, putting him in a position where he lacks an outright majority in the Senate.
While the deficit request had near unanimous support in the Wednesday vote, it may not be a signal of smooth sailing ahead for the premier, given that all parties had vowed to back the emergency measure, the fifth of its kind since the start pandemic.
Broader Support
Earlier on Wednesday, Conte briefed President Sergio Mattarella on his search for broader support after the Renzi defection turned his coalition into a minority government. He’ll now aim to cobble together a group of unaffiliated and centrist senators to make up for the defection of Renzi’s party.
With votes on other issues scheduled in coming weeks, Conte doesn’t have unlimited time to improve his position. In their meeting Mattarella urged the premier to strengthen his majority quickly if he wants to avoid new elections, Corriere della Sera reported. The premier is weighing a cabinet reshuffle while reaching out to lawmakers from Renzi’s party and from Silvio Berlusconi’s Forza Italia, la Repubblica reported.
The premier will need an outright majority if he’s to govern in the longer term, as that’s the threshold for passing key legislation.
Italy’s economy faces a difficult path back to growth after being ravaged by the pandemic. The government says gross domestic product will expand 6% this year, with the Bank of Italy forecasting just over half that. The budget shortfall is now expected to be close to 9% in 2021, according to the parliamentary budget office, with debt seen rising to close to 160% of GDP.
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