Italy's Center-Right Patches Over Latest Clash on Populists

(Bloomberg) -- Italy’s League leader Matteo Salvini and ex-premier Silvio Berlusconi pledged to remain united after a virulent clash over relations with the anti-establishment Five Star Movement, with the prospect of a populist Five Star-League government alarming investors.

Center-right alliance leaders Salvini, Berlusconi and Giorgia Meloni of the far-right Brothers of Italy party said in a joint statement after meeting Saturday that they’re committed “not to seek individual accords for the formation of the government.” They said talks on picking speakers for both houses of parliament were not a precursor to government negotiations.

After negotiations led by Salvini and Five Star’s Luigi Di Maio, the job of speaker of the lower house went to Roberto Fico of Five Star, and the Senate post to Maria Elisabetta Casellati of Berlusconi’s Forza Italia party. The carve-up underscored the influence of Salvini and Di Maio, who succeeded in making Berlusconi withdraw his initial Senate candidate, former minister Paolo Romani, despite the ex-premier’s feeling of being slighted by Di Maio’s refusal to meet him.

President Sergio Mattarella, who has the task of naming a new premier, is expected to start formal consultations with party leaders in early April.

Populist Fears

Investors in Italy, and the country’s European Union partners, fear a populist government could jeopardize state finances and a feeble economic recovery, as well as undermine the euro area because of their spending plans and demands for EU reform. 

The center-right bloc’s show of unity was in marked contrast with tensions that saw Salvini, in accord with Five Star, fracture the bloc by failing to back Romani in a vote Friday.

A jubilant Di Maio saw Salvini’s move as promising for efforts to form the next government together. “Salvini kept his word. He was brave,” Di Maio told his advisers, newspaper La Stampa reported Saturday. “And this is a great signal for the government.” 

Di Maio’s office declined to confirm the report, saying that Five Star appreciated that Salvini did what he said he would do.

Salvini’s League overtook Berlusconi’s Forza Italia in the March 4 general elections, but neither the League nor Five Star have a parliamentary majority. The center-right has long been divided over Five Star, with Salvini open to an alliance, while Berlusconi has been pushing for a pact with the center-left Democratic Party.

‘Cold Hostility’

Berlusconi’s party late Friday described as “an act of cold hostility” the League’s vote for ex-minister Anna Maria Bernini as Senate speaker. While she is a member of Berlusconi’s party, she wasn’t its selected candidate. 

The former premier’s office said that the Senate vote “on the one hand breaks the unity of the center-right coalition, and on the other reveals a plan for a League-Five Star government.”

Big hurdles still remain on the way to populist power. Di Maio and Salvini both claim the premiership. Adding to the challenges, Five Star’s political base is among the poorer voters of southern Italy, while the League’s traditional support comes from the industrial north.

Backing for a joint government has increased among Five Star and League voters. An SWG poll for Il Messaggero published Saturday showed 59 percent of Five Star voters and 58 percent of League voters support an administration formed by the two parties.

To contact the reporters on this story: John Follain in Rome at jfollain2@bloomberg.net, Marco Bertacche in Milan at mbertacche@bloomberg.net.

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Steve Geimann, Tom Lavell

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