Abu Dhabi, UAESunday 22 September 2019

Italy scrambles for political solution with new vote on horizon

The far-right Lega Nord party has called for fresh elections amid stalemate

Italy’s political elite continued to scramble to form a government and bring three months of turmoil to an end on Wednesday as a right-wing party made a call for fresh elections.

Matteo Salvini, the energetic leader of the far-right Lega Nord Party, said he wanted new elections in Italy “as soon as possible”.

His request came as the biggest party to emerge out of the March election, the 5-Star Movement, made a last-ditch attempt to form a coalition government with Mr Salvini’s party.

The two populist parties had suspended their joint bid for power after President Sergio Mattarella nixed their choice for the economy ministry: 81-year-old eurosceptic Paolo Savona. He deemed Savona to be a supporter of pulling Italy, the European Union’s fourth-largest economy, out of the Euro.

"The uncertainty about our position in the euro has alarmed Italian and foreign investors who have invested in our bonds and companies," the president said according to agency Ansa.

Mr Savona wrote in his latest book ‘Like a Nightmare and a Dream’ that the euro is a “German cage” that Italy must escape from.

Italy leaving the euro would likely trigger questions over its membership of the bloc, of which it is a founding member. It would be a disaster for the union at a time when Britain has voted to leave it.

But the Five Star Movement and the Lega Nord refused to abandon Mr Savona, failing to offer up a viable alternative for the role of finance chief. Both parties have criticised the European Union but deny having a plan to leave the euro. Both had not campaigned on that specific issue.

Yet the country’s Democratic Party used the issue in an attempt to damage the populist parties.

Maurizio Martina, leader of the Partito Democratico, accused the two parties on Twitter of having “a project to take Italy out of the euro zone, and they did it in a ruthless way”.

If a coalition cannot be formed, the country will again hold elections, with the president having to dissolve parliament and host a vote as early as July 29, if most of the major parties have their way.

The continued political turmoil rocked Italian financial markets. The euro sank to multi-month lows on fears that snap elections would lead to a eurosceptic government in Rome.

A poll conducted by the European Commission in November 2017 showed that almost 59 per cent of Italians were in favour of an economic and monetary union in Europe with one single currency. Around 30 per cent were opposed to the idea.

A surprise breakthrough between the president and 5-Star/League would ease uncertainty but still usher in a coalition planning to ramp up spending in the heavily indebted nation and push for changes to European Union and euro-zone fiscal rules.

But Salvini, who is surging in opinion polls, appeared to throw cold water on the notion that his party and 5-Star could try again to take power, saying Italy should return to an election as soon as possible.

"The earlier we vote the better because it's the best way to get out of this quagmire and confusion," he told reporters.

Even so, the two parties look set to win big in any new election.

An IPSOS poll, carried out on May 16-17 and published in Italy’s Corriere della Sera newspaper on Wednesday, showed support for the Lega Nord's would-be coalition partner, the 5-Star Movement, steady at about 32.6 percent – implying a much more comfortable majority if the pair were to try again to govern.

Updated: May 30, 2018 07:44 PM