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Italy’s Giuseppe Conte given shot at forming new coalition

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Italy’s president Sergio Mattarella on Thursday offered outgoing prime minister Giuseppe Conte a fresh mandate to try to form a new coalition of the anti-establishment Five Star Movement and centre-left Democratic party (PD).

A deal between two parties that were once fierce rivals would stave off fresh elections and shut Matteo Salvini’s far-right League party out of government.

Mr Conte “conditionally” accepted, saying he would lead a government that would be “concentrated on the needs of citizens and make us proud to be Italian”. The two parties have compiled a list of shared priorities, seen by the Financial Times, which they have asked Mr Conte to use as the basis for a programme of legislation.

Mr Conte led an unwieldy coalition between Five Star and the League that was formed after a general election last year. It survived until Mr Salvini this month withdrew support for the government and called for fresh elections, sparking Mr Conte’s resignation.

But Mr Salvini’s attempt to call a vote, a calculated move as his party was ahead in the polls, seems to have backfired. Five Star and PD entered negotiations, and after days of tense talks said on Wednesday that they would try to form a coalition under Mr Conte, who was a political unknown until last year but now has high approval ratings, leading Five Star to insist he remain as prime minister.

Mr Conte said he had some doubts about returning to government with “a different majority” but said he “had always worked in the interests of the people”.

“I didn’t always succeed but I tried to serve the interests of my country, not political parties or myself,” Mr Conte said.

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He said Italy needed to “emerge quickly from the uncertainty created by the political crisis”.

Proposed priorities for a Five Star-Democratic party alliance

  • Spearhead a relaunch and reform of the EU including reform of the Dublin treaty
  • Gain greater flexibility from Europe on spending
  • Block a rise in VAT that kicks in on January 1 2020 unless €23bn in public spending cuts can be found
  • Reduce employment contributions and introduce a minimum wage
  • Increase spending on education and welfare
  • Adopt a “Green New Deal” that puts “the environment at the centre of all public investment”
  • Tighten regulation of the internet economy including data gathering and shared economy workers, and introduce a tax on multinationals that offer digital services in Italy
  • Increased autonomy for the regions
  • Better protection for savings and savers in the case of bank failure

Italy needs to find at least €23bn in savings to avoid a rise in VAT and possible EU censure. On Thursday Mr Conte pledged to prevent any rise in VAT, “while promoting growth and social development”.

He also signalled the possible start of a more pro-Europe outlook, after the Eurosceptic coalition between Five Star and the League became embroiled in disputes with Brussels over Rome’s budget and stance towards Russia.

“A priority is to recover lost time in Europe to allow Italy to recover the role it deserves, as a protagonist,” Mr Conte said.

Before a government can be formed, the two sides will still need to overcome substantial hurdles, in particular disagreement on the top cabinet team, and find a common legislative programme.

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After the deal was agreed on Wednesday Luigi Di Maio, leader of Five Star, said: “We made commitments to the Italians . . . and come what may we want to fulfil them.”

Nicola Zingaretti, leader of the PD, said: “After meetings in recent days we have defined some initial work we can do for Italy.” But he said that he had highlighted to the president “the need to create a government of change and discontinuity for this country”.

Another looming obstacle to a new partnership is an undertaking by Five Star to offer its members a vote online on any future coalition, an instrument the party has often used to release itself from responsibility for a potentially unpopular decision.

With many Five Star activists against the alliance with their historic enemies, a Yes vote is not guaranteed, and the voting platform has also been shown to be insecure and prone to attacks by hackers.

A new government will also have to deal with Mr Salvini barracking from the sidelines, after being relegated to the opposition benches.

Wolfango Piccoli, an analyst at advisory company Teneo, said the coalition might struggle to achieve its goals: “On paper there is convergence on issues such as the environment, social rights and Europe but there is an issue of trust. The leadership is not convinced of this alliance and the electorate is very divided.”

He added that “reappointing Conte as prime minister to dismantle some of his previous work shows how unnatural this partnership is”.

Via Financial Times

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