Published On: Wed, Aug 28th, 2019

Italy-EU news: Brussels holds its breath as coalition government agreement edges closer | World | News

The crisis exploded earlier this month when far-right Lega leader Matteo Salvini pulled the plug on his 14-month-long coalition Government with 5-Star and demanded a vote of confidence in Mr Conte, who later announced his resignation. As the deadline looms for the formation of a new Government on Wednesday, the two parties trying to put an establishment together – outgoing coalition partner 5-Star Movement and opposition Democratic Party (PD) – made significant progress over the past 24 hours.

The role of Giuseppe Conte has been a sticking point so far, especially from PD’s perspective, but signs are strong the former Prime Minister is set to be reinstated.

Italian President Sergio Mattarella launched marathon 36-hour talks on Tuesday aimed at solving the Government crisis.

Two officials from PD told Politico talks were progressing following a brief meeting between the two party leaders on Monday, with a deal including reinstating independent Mr Conte as the country’s Prime Minister.

The PD’s Senate leader Andrea Marcucci told reporters in brief comments after a meeting with 5-Star officials on Tuesday: “Our work is continuing in a fruitful way.”

But tensions still remain, with Reuters reporting a PD source as saying talks could still yet collapse over the post of deputy Prime Minister Luigi Di Maio, who is insisting on retaining the same role in the new coalition, despite strong opposition from PD.

5-Star said in a blog post that even if a deal was struck, it would still need to survive a vote of its party members.

This could lead President Mattarella to call dramatic snap elections, but investors are betting this will be avoided, fearing they would be won by Mr Salvini’s Lega party.

They are still the biggest political group in Italy but a win for Mr Salvini in any election would put Rome on collision course with the European Union over expansionary government spending.

READ MORE: Brussels warned to brace for eurozone chaos as Italy eyes snap vote

5-Star reacted angrily to this accusation, and the parties cancelled their scheduled meeting.

The PD says Mr Di Maio wants to remain as deputy Prime Minister but this is something it considers unacceptable if Mr Conte is reinstated as Italy’s leader.

But the picture remains complicated by deep cracks between the two parties, with each split between leadership factions who want a deal and others who would prefer to risk an election.

Meanwhile Mr Salvini continues to demand snap elections despite suffering huge blows since the collapse of the last coalition Government.

Opinion polls show Lega has lost 3-7 percentage points since collapsing the coalition, though it remains easily the most popular party, followed by the PD and 5-Star.

But Mr Salvini is likely to be furious at a ringing endorsement of Mr Conte from Donald Trump, particularly as the populist Lega boss has always expressed his admiration for the US President.

Mr Trump waded into the crisis on Tuesday night, and said he hopes Mr Conte will be reinstated as Prime Minister.

He wrote on Twitter: “Starting to look good for the highly respected Prime Minister of the Italian Republic, Giuseppe Conte.

“A very talented man who will hopefully remain Prime Minister.”

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