Five Star, League Reach Deal to Form Government in Italy After All

The parties are now willing to accept a finance minister who doesn’t have a secret plan for leaving the euro.

Luigi Di Maio, the leader of Italy's Five Star Movement, answers questions from reporters in Rome, April 12
Luigi Di Maio, the leader of Italy’s Five Star Movement, answers questions from reporters in Rome, April 12 (Presidenza della Repubblica)

The leaders of Italy’s Five Star Movement and League have reached a deal to stave off early elections.

Luigi Di Maio and Matteo Salvini still want Giuseppe Conte, an academic, as prime minister. But they are willing to relent on the selection of finance minister.

Paolo Savona, whose nomination sparked a constitutional crisis, would still join the cabinet, but as European affairs — not finance — minister. That post would go to Giovanni Tria, an economics lecturer.

Veto

Savona was vetoed by President Sergio Mattarella, who feared that the former industry minister’s anti-euro views would spook markets. He once authored a plan that explained how Italy might “secretly” leave the single currency.

The Five Star and League initially refused to nominate another candidate and demanded early elections. The former even called for Mattarella’s impeachment, but withdrew that threat after only a few days.

The reason for the Five Star’s about-face may be that it is stagnant in the polls whereas the League’s popularity is up. Snap elections could tilt the balance in the right-wing party’s favor.

Five Star currently has 35 percent of the seats in parliament against 20 percent for the League.

What’s next?

  • Carlo Cottarelli, the former IMF official who had been asked by Mattarella to form a neutral interim government, has returned his mandate.
  • Assuming Mattarella accepts the new deal, Italy will soon have its first openly Euroskeptic government.