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POLITICS

M5S and League say choosing Italy’s next PM ‘will not be a problem’

Italy inched closer towards ending more than two months of political deadlock on Thursday as anti-establishment leader Luigi Di Maio said he was confident an agreement would be reached on forming a coalition government with the far-right.

M5S and League say choosing Italy's next PM 'will not be a problem'
Five Star Movement leader Luigi Di Maio and League leader Matteo Salvini. Photo: Tiziana Fabi/AFP

Di Maio said earlier in that all outstanding matters had been settled in talks with Matteo Salvini, the leader of the nationalist and eurosceptic League although the issue of their joint prime ministerial candidate was still being debated.

But speaking late on Thursday in northern Italy, he went further, saying: “I am very confident, we have created the basis of the government and the name of the prime minister will not be a problem.”

Salvini, meanwhile, pledged that on Monday the two parties would be in a position to formally present President Sergio Mattarella with the results of the talks.

“I am proud of the time, the days and nights spent, not talking of ministers but of the future of Italy,” he said as he travelled to northern Italy where regional elections will be held Sunday.

“On Monday we will go to Mr Mattarella and submit our work,” he added.

President Mattarella must agree to the parties' prime ministerial nominee before the candidate seeks the approval of parliament. The two parties have been locked in negotiations over a “Contract for the Government of Change”, a document setting out policies and how the proposed coalition would work.

“Can you see that I've hardly slept at all over the past days?,” tweeted Salvini earlier next to a smiling selfie. “I'm working for you and I promise to give it my all,” he wrote. 

Di Maio said earlier on Thursday that the final version of the contract would be put to his party's members for approval “probably tomorrow”. 

The government team is expected to take into account the number of seats each party holds after March's inconclusive elections. Five Star became Italy's largest party after gaining nearly 33 percent of the vote, while the League – shorn of the rest of the rightwing coalition that won 37 percent – will be the junior partner with 17 percent.


Photo: Andreas Solaro/AFP

Officials representing Mattarella have said he would only scrutinize the final version of the contract.

A version of the document, from Tuesday evening, was leaked to daily Il Fatto Quotidiano. That document contains a proposed “conciliation committee”, a structure parallel to the parliament which would be responsible for settling any disagreements between two political forces that have divergent ideas on issues like immigration and Italy's relations with Europe.

It proposes that European Union sanctions against Russia be dropped immediately, and includes a watered-down EU section that no longer talks about exiting the single currency but asks that unspecified “certain responsibilities” be repatriated to individual member states.

Domestically there are pension reforms, the introduction of a basic income and a section questioning ten obligatory vaccines for children attending state schools. 

The leaked version also contained a number of issues that still needed signing off, including possibly reopening discussions about EU rules and monetary policy.

Among other policies yet to be approved as of Tuesday evening were also whether asylum centres should “fully respect” migrants' human rights, and the radical proposal to have just two tax brackets – 20 percent and 15 percent. Also yet to be signed off were a register of religious leaders, a demand that all religious sermons be conducted in Italian, and that local consultations take place before any new mosques are opened.

The likely arrival of a populist government took its toll on the Italian banking sector at the Milan Stock Exchange Thursday, in particular the Monte dei Paschi di Siena bank, majority-owned by the Italian state, which saw its share price tumble.

The troubled bank is undergoing heavy restructuring measures after benefiting from bailout worth billions of euros. But the M5S-League government draft outlined plans to “redefine the mission and the objectives” of the bank, without giving further details. As a result the bank's share prices tumbled more than 10 percent on Thursday afternoon and was down at 8.86 percent at close. 

The gap between Italy's and Germany's 10-year borrowing rates has also increased by 25 base points since Tuesday to 156 – a sign that investors were still concerned about Italy's financial stability.

The Italian stock market closed at -0.29 percent after taking a 2.32 percent hit on Wednesday. 

READ ALSO: What will Italy's next government mean for its mountain of debt?


Photo: Filippo Monteforte/AFP
 

POLITICS

Italy’s Meloni begins tricky government talks after election win

Italian far-right leader Giorgia Meloni and her allies on Tuesday began what is set to be a weeks-long process of forming a new government, with crises looming on several fronts.

Italy's Meloni begins tricky government talks after election win

Meloni’s post-fascist Brothers of Italy party, which triumphed in Sunday’s elections, has no experience of power but must assemble a cross-party team to tackle sky-high inflation and energy prices, and relations with a wary Europe.

The 45-year-old is hoping to be the first woman to lead Italy as prime minister, but needs her allies, Matteo Salvini’s far-right League party and former Silvio Berlusconi’s Forza Italia, for a majority in parliament.

The division of the top jobs – notably economy, foreign affairs, the defence and interior ministries – will always be political but now, more than ever, “will have to reflect areas of expertise”, the Stampa daily noted.

President Sergio Mattarella will begin consultations on who should lead the new government only once the Senate and Chamber presidents have been elected by parliament, which meets on October 13th.

In the past, it has taken anything between four and 12 weeks for a new administration to take office.

But the first deadline for action is coming up fast, with Italy due to submit its draft plan for next year’s budget to Brussels by October 15th.

READ ALSO: The five biggest challenges facing Italy’s new government

The parties have said they want to make major changes, with a manifesto promising to slash taxes, roll back welfare, and “revise” the terms of Italy’s recovery fund agreement with Brussels – potentially putting the rest of the deal, worth a total of almost 200 billion euros to Italy, at risk.

EU economy commissioner Paolo Gentiloni said he urged “the next Italian government to ensure that this opportunity is seized”, saying the fund was key to putting Italy on a path to “strong and durable growth”.

Agnese Ortolani, senior Europe analyst at the Economist Intelligence Unit, said she expected Meloni “to continue to reassure the markets by picking a non-controversial figure for the role of finance minister”.

“She will also want to avoid reputational damage by nominating someone who is not perceived as credible by the markets,” she said in a note.

READ ALSO: Doubts rise over ‘loose cannon’ Salvini after Italy’s election

Meloni’s allies have been pitching for heavyweight positions, Salvini wanting his old job as interior minister back, and Berlusconi eyeing president of the Senate.

Their parties’ disappointing performance in the polls, however, with neither reaching 10 percent while Brothers of Italy’s secured 26 percent, means Meloni may already be planning to sideline them.

League leader Matteo Salvini (L) and Fratelli d’Italia leader Giorgia Meloni are set to form a government together following the election. Photo by MIGUEL MEDINA / AFP

Salvini and Berlusconi do not see eye-to-eye with Meloni on several fronts, including on Russia and public spending to relieve the cost of living crisis.

With all the potential friction ahead, winning the elections “was almost the easy part”, commented Luciano Fontana, chief editor of the Corriere della Sera daily.

Berlusconi downplayed concerns he would rock the boat Tuesday, claiming his party was ready to make compromises “in the country’s interests”.

His ally Antonio Tajani, a former European parliament president, is tipped as possible foreign minister, an appointment which could both appease Berlusconi and assuage international fears that Meloni’s Eurosceptic populist party plans to pick fights with Brussels.

Salvini may prove more difficult. He is currently on trial for allegedly abusing his powers as interior minister in 2019 to block migrants at sea, which some say could rule him out returning to the job.

“It won’t be an easy relationship. It’s likely that (Salvini) will be given a more marginal role in the government than he wants,” Sofia Ventura, political sciences professor at Bologna University, told the foreign press association in Rome.

“Defusing Salvini” without sparking a backlash that could weaken the government is “Meloni’s first test”, the Repubblica daily said.

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