Italy coalition in crisis after Salvini calls for snap polls

Italy’s Interior Minister and deputy Prime Minister Matteo Salvini. File photo.
Italy’s Interior Minister and deputy Prime Minister Matteo Salvini. File photo.
Image: Andreas SOLARO / AFP

Italy's coalition government was in crisis on Friday after far-right Interior Minister Matteo Salvini pulled his support and called for snap elections.

The heightened political tensions in the heavily-indebted country rattled financial markets, where yields rose on Italian government bonds on Friday.

Italy's Prime Minister Giuseppe Conte, who has held several rounds of talks to try to ease the crisis in the 14-month old government, angrily called on Salvini to justify his move.

Salvini has frequently clashed with his fellow Deputy Prime Minister Luigi di Maio of the anti-establishment Five Star Movement (M5S) party over a range of policies.

He stepped up the pressure on Thursday, saying there was no longer a majority to support a government and calling for new elections.

"Let's go straight to parliament to say there is no longer a majority... and quickly go back to the voters," Salvini said.

The move sparked a political crisis described by the left-wing newspaper La Repubblica as "a farce that makes no-one laugh".

Conte, who has held separate talks with Salvini and President Sergio Mattarella, went on the offensive, saying it was not for the firebrand interior minister to summon parliament.

"It's not up to him to dictate the steps of the political crisis," he added.

Conte called on Salvini "to explain to the country and justify to the electorate, who believed in the possibility of change, the reasons that brought him to abruptly interrupt" the activities of government.

Both houses of parliament are currently on recess for the holidays and are not due back until September.

Long-rumbling tensions between the coalition's populist leaders have peaked in recent days, with the row centred on the financing of a multi-billion-euro high-speed train line between the Italian city of Turin and Lyon in neighbouring France.

On financial markets, the yield on 10-year government bonds jumped to 1.738 percent from 1.530 percent on Thursday while the spread between Italian and German bonds jumped to 233 basis points.

Shifting political sands

An early election may benefit Salvini, with opinion polls putting his League party ahead, leaving open the possibility that it could govern in alliance with another, smaller far-right party, Fratelli d'Italia.

That contrasts with the popularity of the coalition partners in the June 2018 after an election that saw M5S take 32 percent of the vote, while the League scored 17 percent.

In the European election in May this year, however, the League took the most votes in Italy with 34 percent against about 17 percent for M5S.

Italian media has reported that Salvini, in earlier talks with Conte, set conditions for staying in the coalition - including the resignation of the transport, defence and economy ministers, who have resisted his projects and policies.

'Let Italians have their say'

"The League and M5S have been diverging in their vision for too long, on matters that are fundamental for the country," the League said in its statement on Thursday.

"This government's only option is to let Italians have their say" by calling elections, it added.

Salvini on Thursday denounced "repeated insults against me and the League by supposed allies".

At a meeting later in the central coastal city of Pescara he set a campaigning tone.

"We are told that we cannot reduce taxes. We will prove, if you give us the power to do so, that it is possible to reduce taxes on Italian workers," Salvini told supporters.

Di Maio, meanwhile, said his M5S party "is ready" to return to the polls.

The opposition has also called on the government to resign, arguing it no longer has a workable majority in parliament after Di Maio voted against the Lyon-Turin rail project, which involves a 8.6-billion-euro ($9.8-billion) tunnel through the Alps.

But Mattarella, who has the sole power to dissolve parliament, has insisted there must be a government in place to finalise the budget, a first draft of which has to be submitted to EU authorities by the end of September.

The government is struggling to rein in its public deficit and its mammoth debt mountain of more than 2.3 trillion euros.

Italian news agency AIG said on Thursday the Senate could convene as early as August 20 to declare the end of the government, with the dissolution of parliament possible in the following days.

According to Italy's constitution, new elections would then have to be held within 50 to 70 days.