Newcomer struggles to form Italy government

AP, ROME

Sun, May 27, 2018 - Page 5

The law professor tapped to try to form Italy’s first populist government on Friday spent a second day in talks, a possible indication that the political novice was finding tough going in assembling a Cabinet that could keep rival forces together in a coalition.

Giuseppe Conte on Friday evening returned to the presidential palace, about 48 hours after Italian President Sergio Mattarella gave him the mandate in hopes of breaking a political impasse that resulted from inconclusive elections on March 4.

Neither Conte, who left by a palace back door, nor the presidential office immediately issued a statement.

However, Italian media quoted palace sources as saying that Conte came to confer with Mattarella in “informal talks.”

A virtual stranger to politics, Conte was the compromise choice of the two populist rivals who, unable to form a government without the help of the other, joined forces to forge a coalition that could get to work giving Italians tax relief and guaranteed income to poor people, even if the measures could balloon Italy’s debt to unsustainable levels.

The rivals are Matteo Salvini, who leads the right-wing, northern-based League, and Luigi Di Maio, head of the Five Star Movement, whose pledge to guarantee a basic income to the unemployed helped it triumph in the economically lagging south in the elections for parliament.

Salvini, Di Maio and Conte huddled earlier in the day in Rome.

“We’re working to give a government of change to this country,” Conte tweeted, but otherwise was tight-lipped about how his efforts were going.

Nervousness about what could be a government hostile to EU insistence on fiscally sound measures has rattled the bond markets.

On Friday, the benchmark spread of points between 10-year Italian bonds and German bonds climbed past 200 points.

One thorny question has been the choice of economy minister. Salvini has been pushing for a former minister, Paolo Savona, who has likened Italy’s being a member of the common euro currency to being enclosed in a “German cage,” a reference to Berlin’s stress on austerity measures for debt-ridden countries such as Italy.

Mattarella, whose role as head of state includes approving a new government’s Cabinet picks, is staunchly pro-euro.

Di Maio glossed over any difficulties in agreeing on a Cabinet team, telling reporters that the three were perfectly in sync.

Outgoing Italian Prime Minister Paolo Gentiloni on Friday assembled staff to thank them, as his hours in power as the head of a Democratic Party-led government neared their end.

The Democrats were trashed in the March elections.

Before wishing all “good luck,” Gentiloni had some words of caution to a nation on the brink of a populist-led government.

Referring to the Democrats’ five years in power, when the Italian economy began growing again, but apparently too slowly to convince voters, Gentiloni said that “alas, to go off track, only a few months, or even just a few weeks” is all it takes to reverse recovery.

Shortly before Conte went to confer with the Italian president, Salvini flew to Milan, apparently for family reasons, but another sign that no new government was about to be born.

Salvini, thwarted in his aim to become prime minister, is keen on becoming interior minister to push the League’s hard line against migrants.

Earlier on Friday, Conte met with the Italian central bank governor.

On Thursday, he had met with some of the individual investors who lost their savings after several small banks failed.

While the outgoing government has covered a very small part of the losses, Conte has said he intends to make awarding damages a priority.