May 24, 2018 / 3:50 PM / a month ago

New Italian government has little chance of staying the course

ROME (Reuters) - A new government is expected to take office in Italy next week after one of the longest periods of post-election flux in its history, but the fraught gestation might prove child’s play by comparison with what comes next.

FILE PHOTO: Giuseppe Conte arrives before a consultation with Italian President Sergio Mattarella at the Quirinal Palace in Rome, Italy, May 23, 2018. REUTERS/Remo Casilli/File Photo

President Sergio Mattarella gave political novice Giuseppe Conte a mandate on Wednesday to head a coalition comprising the anti-establishment 5-Star Movement and far-right League, ending 80 days of stalemate following an inconclusive vote on March 4.

The League and 5-Star have drawn up a 57-page government programme, presenting it as an ambitious project designed to fill a full, five-year legislature. Few believe it will last anywhere near that long.

“Virtually no Italian government has survived five years, so that is not even an issue,” said Franco Pavoncello, a professor of political science and president of John Cabot University.

“The question is whether they can last one or two years, and whether they can make a dent in the political, institutional and economic life of the country.”

Even that might prove a stretch given the challenges ahead, including the fact that 5-Star and the League are political rivals with diverging priorities, and have only a wafer-thin majority in the upper house, leaving them vulnerable to ambush.

“This government has been born to lead an election campaign ... the next elections are much nearer than you might think,” outgoing industry minister Carlo Calenda said on Thursday.

Both parties made extravagant promises during their campaigns and have included elements of these in their pact, which is infused with euroscepticism and calls for an overhaul of EU treaties on monetary union and immigration.

Some of their programme should be relatively easy to implement and give them swift domestic wins, such as an undertaking to strengthen laws on legitimate self-defence and to revise 2011 legislation that sharply raised retirement ages.

But many other issues, including some they will have to tackle from day one, are more problematic and could immediately strain their embryonic relationship.

FILE PHOTO: Newly appointed Italy Prime Minister Giuseppe Conte speaks to the media after a consultation with President Sergio Mattarella at the Quirinal Palace in Rome, Italy, May 23, 2018. REUTERS/Alessandro Bianchi/File Photo

DIFFERENT PRIORITIES

The fate of the southern Ilva steel plant, dogged by corruption scandals and environmental concerns, will be one of the most pressing issues awaiting the new industry ministry, who is likely to be 5-Star leader Luigi Di Maio.

5-Star says the highly polluting firm, which is due to be sold to the world’s largest steelmaker ArcelorMittal, should be shuttered and the site reconverted. The League says Ilva is vital to Italy’s economy and must be protected.

Likewise, while 5-Star wants to pull the plug on the Turin-Lyon high-speed rail link (TAV), the League fervently defends the multi-billion euro Franco-Italian project.

The next challenge will be deciding the priorities for the 2019 budget.

The League and 5-Star both inserted their costly flagship policies in their joint pact — slashing taxes and introducing a universal income for the poor respectively.

Critics argue that heavily indebted Italy can ill-afford either, and certainly not both at once, meaning that their introduction will have to be staggered.

“They are going to have to find resources to cover the imbalances and will have to decide which policies get precedence. That is a recipe for trouble,” said Andrea Goldstein, head of the Nomisma think-tank.

FILE PHOTO: Italy's newly appointed Prime Minister Giuseppe Conte leaves his house in Rome, Italy, May 24, 2018. REUTERS/Yara Nardi/File Photo

The incompatibility of tax cuts and welfare hikes exemplifies the tension at the heart of the coalition: While the League will be looking to serve its core electorate in the wealthy north, 5-Star will be focussed instead on its heartland, the deprived south.

With funds so scarce, it will be extremely hard to satisfy even one of these constituencies, let alone both.

Speaking on condition of anonymity, a senior figure in the League said his party faithful would battle to prevent “our tax money” being spent on “welfare giveaways” for the southern poor and predicted rocky ties with 5-Star lawmakers in parliament.

“We have seen how they work in local councils. They are crazies,” the League politician said.

INSTITUTIONAL CONSTRAINTS

But the two parties will need to work in lockstep if they are too get their bills through parliament, particularly in the upper house, where they have a majority of less than 10.

Centre-left leader Romano Prodi was similarly constrained after an election in 1996, and clung to power for only two years. And he had vastly more political and management experience than the new prime minister, Conte, who has no party machine behind him and no administrative background.

“Some people are saying he won’t get to Christmas,” League veteran and former interior minister Roberto Maroni said in an interview with La Stampa newspaper on Thursday.

Crucially, 5-Star’s Di Maio and League leader Matteo Salvini both lack any government experience and risk being tied in knots by Italy’s multiple institutional constraints and infamous bureaucratic intricacies.

This could neuter some of their more radical plans, including raising deficits to help fund a spending splurge.

President Mattarella has already signalled to both Di Maio and Salvini that he has the power to reject laws that he feels run counter to the constitution, including bills that violate international treaties or do not have adequate budget cover.

“My feeling is that, when you combine the scepticism that surrounds their policies and the contradictions that you see in their programme, then life is going to be very difficult for this government,” said Nomisma’s Goldstein.

“It would be hard even if 5-Star and the League were natural partners — but, of course, they are not.”

Reporting by Crispian Balmer

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