Giuseppe Conte is to resign as Italy’s prime minister after launching a barrage of criticism at Matteo Salvini, accusing the far-right interior minister of weakening the country by calling for fresh elections.

Mr Conte said he planned to go “to the president of the republic to tell him that this government has come to an end and put in his hands my resignation as prime minister”.

Addressing Italian lawmakers, Mr Conte placed the blame on Mr Salvini, leader of the populist League party, who said this month that there was no future in his coalition with the Five Star Movement.

“The decision of the League forces me to interrupt government,” said Mr Conte. He added that Mr Salvini’s decision to trigger the crisis hampered Rome’s negotiations with Brussels over its budget deficit and betrayed citizens’ desire for change.

“Salvini has shown that he pursues his own personal interest and those of the party,” Mr Conte said.

The prime minister’s resignation was expected to be formally presented to Sergio Mattarella, Italy’s president, later on Tuesday.

Mr Mattarella will have to see if there is scope for a new coalition to be put together or whether the country will need to hold fresh elections, which could interrupt delicate negotiations on the country’s annual budget.

Italy’s FTSE MIB stock index was trading 0.9 per cent lower, underperforming its European peers, but Italian government bonds rallied as Mr Conte addressed parliament, sending yields lower.

The benchmark Italian 10-year government bond yield fell 4 basis points to 1.389 per cent, as investors moved into the debt. The spread with German Bunds of the same maturity, a measure of bond market anxiety over Italy, also narrowed. The euro edged higher against the US dollar.

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The League and Five Star went into coalition little more than a year ago after both populist parties emerged as the biggest winners from a general election. Since then their fortunes have diverged, with Mr Salvini — whose League was the coalition junior party — emerging as the country’s most popular and prominent politician.

The government’s 14 months in office have been marked by sporadic clashes with EU leaders over Italy’s spending plans, which Brussels has said are out of line with the bloc’s budget rules. Italy has the eurozone’s most significant debt burden after Greece.

Responding to Mr Conte’s attack, Mr Salvini told lawmakers he “would redo everything he had done again”.

“I am a free man without fear of the judgment of the Italians. Those that are afraid to go to elections are less free,” he said.

He said the reason he had brought about the crisis was because his plans were blocked “by too many Mr No’s” in government.



Via Financial Times