Italy’s Coalition at Risk With One Party Threatening to Quit

(Bloomberg) -- A junior partner in Italy’s ruling coalition is considering ditching the alliance as early as Tuesday, threatening to bring down Premier Giuseppe Conte’s government just as the country is battered by a resurgence of the coronavirus pandemic, according to officials.Former premier Matteo Renzi, leader of the centrist Italy Alive party, is weighing pulling two ministers out of the government before or after a cabinet meeting called for 9.30 p.m., according to officials who asked not to be named discussing private conversations.

While Renzi controls just a handful of lawmakers, Conte needs his support to command a majority in the Italian Senate. Renzi’s withdrawal would throw the Conte administration into turmoil but it wouldn’t necessarily force the prime minister into a snap election. Conte could seek to piece together an alternative majority if Renzi leaves the coalition, and some officials have speculated that Renzi may be maneuvering to increase his leverage in a future Conte cabinet -- with little support among voters, Italy Alive would risk being wiped out in an election.

Tensions between Renzi and Conte have escalated over recent weeks as the former prime minister lambasted the government’s plans for how to invest money from the European Union recovery fund as well as its governance. Tuesday’s cabinet meeting sets the stage for a potential showdown as ministers will discuss how to spend an estimated 196 billion-euro ($240 billion) windfall from the EU rescue package.

Renzi did not immediately respond to a request for comment on whether he will dump the coalition on Tuesday. Several other officials said his party is assessing a new version of the government’s recovery plan, sent to coalition members on Monday evening.

Read More: Conte’s Options to Prevent Ally From Toppling Italy’s Government

The coalition infighting comes at a terrible moment for Italy with the government still struggling to contain a second wave of Covid-19, which has infected more than 2 million people and triggered a crushing recession.

President Sergio Mattarella, who would oversee any attempt to forge a new government, has asked Renzi to ensure that parliament approves the recovery plan before he plunges the government into crisis and was given assurances to that effect, according to officials. Renzi could pull out his ministers this week but still guarantee external support to ensure parliament approves the recovery plan later this month, other officials said.

For Conte, it would be the second time a key ally abandons him. A former law professor, he was plucked from obscurity in 2018 to head a government with the anti-establishment Five Star Movement and the anti-migrant League. Conte forged a second coalition the following year after League leader Matteo Salvini ditched the alliance. Conte’s current administration is backed by Five Star and the center-left Democratic Party.

Whether Conte can yet again hold on to power depends on how many centrist and unaffiliated senators decide to back him, if he decides to appeal to parliament. The unelected Conte, who has no party of his own, needs to fill a gap left by Renzi’s 18 senators.

Possible scenarios to resolve the political turmoil include a third Conte government perhaps with Renzi as foreign minister, a similar coalition with a different premier, a broad alliance headed by a figure like ex-European Central Bank head Mario Draghi, or early elections.

Uniting many lawmakers across coalition parties is the fear of early elections as opinion polls show Salvini’s center-right bloc would win. Besides, many lawmakers would not be re-elected as the number of seats in both houses has been shrunk to downsize parliament.

(Adds cabinet timing in second paragraph, details on scenarios)