Italy’s President Sergio Mattarella meets with Democratic Party leader Nicola Zingaretti in Rome, Italy August 28, 2019. Presidential Palace/Paolo Giandotti/ Handout via REUTERS
August 28, 2019
By Giselda Vagnoni and Angelo Amante
ROME (Reuters) – Italy’s opposition Democratic Party (PD) said on Wednesday it was ready to form a coalition with the 5-Star Movement, setting aside years of hostility to avert a snap election and ease economic uncertainty.
Following days of often tense and difficult talks, PD leader Nicola Zingaretti told Italy’s president that his party would accept the 5-Star candidate for prime minister — the current premier Giuseppe Conte.
“We love Italy and we consider it worthwhile to try this experience,” Zingaretti told reporters. “In difficult times like these, shunning our responsibility to have the courage to try this is something we cannot afford to do.”
The previous coalition made up of 5-Star and the far-right League collapsed this month when League leader Matteo Salvini withdrew hoping to trigger an early election and cash in on his surging popularity.
But his move backfired when Conte refused to resign immediately, giving 5-Star and the PD time to try to overcome their fierce mutual animosity and agree to a government that had initially appeared impossible.
The prospect of a new administration led by Conte, an academic who is considered close to the 5-Star, has buoyed markets, which are betting that Italy will get a fiscally prudent government that will avoid confrontation with Europe.
The League is highly eurosceptic and had promised swinging tax cuts for 2020 that economists warned could put unsustainable pressure on Italy’s towering debt mountain.
Italy’s 10-year bond yield fell to a record low below 1%, two-year bond yields fell to their lowest since May 2018 at -0.22% <IT2YT=RR> and Italy’s 50-year bond yield fell to a record low around 2.266% <IT50YT=RR>.
HURDLES AHEAD
However, a coalition pact is not yet a done deal. The tentative accord could still unravel even as President Sergio Mattarella wraps up his consultations aimed at resolving the political chaos that was unexpectedly unleashed by Salvini.
5-Star and the PD have yet to agree on other top government posts, besides the prime minister’s position, or reveal a common policy platform.
Mattarella is due to meet 5-Star leaders at 7 p.m. (1700 GMT). If they give him the green light, he will likely call in Conte and invite him to form a new cabinet, Italy’s 67th since the end of World War Two.
However, in an added complication, 5-Star has said it will put its proposed deal with the PD to an online vote of its members. Many 5-Star supporters have taken to social media to denounce any pact with the center-left and a ‘yes’ vote cannot be taken for granted.
As negotiations went down to the wire, one of the posts still in play was that of deputy prime minister. The PD wants this job for one of its own, now that it has agreed to Conte staying on as prime minister.
“The problem is that if there is a premier from the 5-Star it is fair that his deputy is from the PD,” PD deputy leader Andrea Orlando said on Twitter.
Conte, a virtually unknown lawyer when he was chosen by the League and 5-Star to lead their new government last year, was seen as a voice of reason within the outgoing coalition and has good relations with Mattarella.
(Writing by Crispian Balmer; additional reporting by Valentina Consiglio, Gavin Jones and Giselda Vagnoni in Rome; Editing by Jon Boyle and Gareth Jones)
