Italy’s deputy prime minister Salvini warns of government crisis

Italy’s deputy prime minister Matteo Salvini is warning that a government crisis will be unavoidable if his League party cannot start working constructively with its coalition partner, the 5-Star Movement, within two weeks.

The warning came a day after Prime Minister Giuseppe Conte threatened to resign unless the two populist parties in the coalition government set aside their differences and continue working on the government programme.

“If we realise that in 15 days’ time we’re back here saying the same things, with the same delays and the same postponements, then it would be a problem,” he told Italian radio RTL.

The right-wing League and the anti-establishment 5-Star Movement have been fighting constantly since they sealed a fragile government pact a year ago.

Mr Conte is a lawyer by training and his skills as a mediator were widely touted when he was tapped to head the coalition of two unaligned populist parties.

His resignation would pave the way to a government crisis, leading the country to new elections, likely in the autumn, just ahead of a critical budget law that needs approval by the end of the year.

In a sign of peacemaking, the uneasy coalition allies managed to reach an agreement on launching large-scale public works. But that was just one of the key economic measures the partners disagree on.

Italy’s expensive budget plans have already raised the European Commission’s worries and may lead to an excessive deficit procedure as soon as this week, with Rome facing fines for up to 3.5 billion euro (£3.1 billion).

The Commission warned that, rather than shrinking, Italy’s debt has been on the rise this year and will continue to expand next year.

But neither the League nor the 5-Stars seem willing to backtrack on their promises, after May’s European elections drastically changed the balance of power within the government.

Mr Salvini’s League doubled its popularity, topping 34% in the EU vote, while the 5-Stars lost about half of their support at 17%.

“Salvini can raise the pressure by asking for more and eventually force the 5-Stars to break away,” said Wolfango Piccoli, co-president of political consultancy firm Teneo Intelligence.

Political uncertainty also risks sending Italy’s borrowing costs spiralling again.

“This government is like the Tower of Pisa: it keeps leaning, but apparently never falls,” said Giovanni Orsina, director of the School of Government at Rome’s Luiss University.

“But if Italian borrowing costs spike up again, then it will be really hard to avoid a crisis.”