Giuseppe Conte. Picture: REUTERS/REMO CASILLI
Giuseppe Conte. Picture: REUTERS/REMO CASILLI

Rome — Italian Prime Minister Giuseppe Conte appeared in no hurry on Thursday to resolve a political crisis triggered by a junior coalition partner, which has abandoned the cabinet in the midst of the Covid-19 pandemic.

Italia Viva, a small party headed by former premier Matteo Renzi, walked out of the government on Wednesday, presenting a long list of grievances including the way Conte had handled the health emergency, and accusing him of hoarding power.

However, Renzi's group has left open the door to returning to the fold so long as a new policy pact could be worked out.

“It isn’t a question of who [is in charge], but of what is done,” Elena Bonetti, one of Italia Viva's two outgoing ministers, told Radio 24.

It remains to be seen if Conte would consider this after Renzi's broadsides against him. Just before Renzi pulled the plug, Conte's aides said that a reconciliation afterwards would be impossible.

Conte himself has said nothing in public since Renzi quit, and has given no indication that he was yet ready to hand in his resignation to President Sergio Mattarella.

One of the options open to him would be to try to cobble together a group of so-called “responsible” parliamentarians from opposition ranks who would promise to prop up his government in the absence of Italia Viva.

“Conte wants to go to parliament and see if he can't build an alternative majority there,” said a government official, who declined to be named.

To do this, he would need to find about  25 legislators in the 630-seat lower house and up to 18 in the 315-seat Senate. However, such a majority would be fragile and hard to control.

Failing that he will need to swallow his pride and look to forge a new alliance with Renzi, one of Italy's most ruthless politicians whose party is floundering in the polls.

However, the largest coalition party, the 5-Star Movement, said on Thursday it wanted nothing more to do with Italia Viva, accusing it of humiliating the country as it prepared to receive billions of euros of EU funds to revive the economy.

“Italy risks being indelibly stained by a move that I consider irresponsible and which, as I have said before, definitively separates our paths,” said Luigi Di Maio, the foreign minister and one of 5-Star's leading figures.

Election concerns

Italy's often volatile bond market registered mild concern, with borrowing costs rising slightly from recent record lows at an auction on Thursday.

The European Central Bank's large-scale purchases of Italian assets in recent months have protected investors from the hostile economic and political winds.

However, analysts say sentiment would sour if there were any indication the crisis will lead to an early general election, which polls indicate would probably be won by the opposition centre-right bloc headed by Matteo Salvini's eurosceptic League.

Salvini called for elections on Thursday, but that would mean prolonged uncertainty that Mattarella will almost certainly try to avoid given the coronavirus contagion. The epidemic has killed more than 80,000 people in Italy and plunged the country into its worst recession since World War 2.

One of Renzi's main complaints about Conte is the way he has handled plans to spend more than €200bn of promised EU funds, accusing him of trying to bypass parliament in the decision-making process.

Renzi also said Conte must accept up to €36bn offered for the health system by a separate eurozone bailout fund. No country has tapped this mechanism amid fears the cash will come with unwelcome conditions.

European affairs minister Vincenzo Amendola, a member of the coalition centre-left Democratic Party (PD) warned that Italy risked missing out on funds unless it got its act together.

“All my European colleagues are very worried,” he told Sky Italia TV.

Reuters

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