By Canadian Press

Italy’s Salvini warns of crisis after PM threat to quit

Jun 6, 2019 | 7:06 AM

ROME — Italy’s deputy prime minister Matteo Salvini warned Tuesday that a government crisis will be unavoidable if his League party cannot start working constructively with the 5-Star Movement, its coalition partner, 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 program.

Salvini insisted he wanted to move forward with the government agenda, but said a breakthrough is needed soon.

“If we realize 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,” Salvini told Italian radio RTL.

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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.

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 fall, 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 on Tuesday 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 euros.

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. 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 breakaway,” said Wolfango Piccoli, co-president of political consultancy firm Teneo Intelligence.

Political uncertainty also risks sending Italy’s borrowing costs spiraling 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.”

Giada Zampano, The Associated Press