Tension in Italy coalition fuels talk of potential split

Tensions between Italy’s ruling populist parties have broken out into public recrimination in the run-up to this month’s European elections, rippling through financial markets and fuelling speculation that the 10-month old coalition government could split.

Italy's government borrowing costs rose after Matteo Salvini, leader of the anti-migrant League, said the country could break European spending limits, prompting his coalition partner Luigi Di Maio of the Five Star Movement to accuse him of being "irresponsible" with his words.

Mr Di Maio had previously accused Mr Salvini of stoking "social tension" in Italy with incendiary campaign rhetoric against migrants ahead of a large rally in Milan this weekend, where the League leader will appear alongside France's Marine Le Pen and other hard-right European politicians.

Giancarlo Giorgetti, a senior League politician and adviser to Mr Salvini, said relations between the two party leaders had broken down, and raised the prospect that the coalition may not last until the end of the Italian parliament, with new elections possible.

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“If this continues after [the EU election date of] 26 May, it will be unsustainable. I am convinced that afterwards there will be another way to live together and another way of working,” he said in an interview with state broadcaster Rai on Tuesday evening.

The party leaders – who are also Italy’s deputy prime ministers – “don’t talk, they just send official letters or tweets”, Mr Giorgetti said.

Mr Salvini appeared to row back from the comments of his adviser, saying on Wednesday that “we have too much to do” and that there was “no alternative majority” that could work in the Italian parliament.

Asked in an interview with Corriere della Sera if the coalition could continue, Mr Salvini said: “I hope so.”

‘Government of change’

Five Star and the League formed an unlikely so-called “government of change” after general elections last year with a pledge to work together to overturn Italy’s past political establishment and push through higher public spending a tax reform.

The two parties are running against each other in European elections this month. Opinion polls have consistently shown that Mr Salvini’s League is expected to win more than 30 per cent of the vote and overtake Five Star, which won the largest vote share in last year’s general election.

Differences between the League and Five Star have also been stoked by Mr Di Maio demanding the resignation of Armando Siri, a League junior transport minister, from the government over allegations of bribery. Mr Siri eventually resigned at the request of prime minister Giuseppe Conte, in spite of protests from Mr Salvini.

Under Italian electoral rules a new general election can only be approved by the country’s president if no working coalition in parliament can be found, meaning the League could run the risk of Five Star entering into a coalition with the centre-left Democratic Party.

Mr Salvini himself has accused Five Star of moving towards the Democratic Party, saying this week he had “started to notice too many meetings between the opposition and the Five Star, too much agreement”.

Nicola Zingaretti, the recently appointed secretary-general of the Democratic Party, has so far ruled out entering into any coalition with Five Star.– Copyright The Financial Times Limited 2019