World

Italy heading to no-confidence vote, possible snap elections

Italy's ruling League party filed a no-confidence motion against the prime minister on Friday, a move the party's populist chief, Matteo Salvini, hopes will trigger snap elections and install him as the nation's new leader.

Alliance between League and Five-Star, tenuous almost since inception, on brink of collapse

Matteo Salvini, Italy's deputy prime minister and interior minister, shown at a news conference Friday for his Italian summer tour in Termoli, wants a vote on a no-confidence motion to take place next week. (Nico Lanese/EPA-EFE)

Italy's ruling League party filed a no-confidence motion against the prime minister on Friday, a move the party's populist chief, Matteo Salvini, hopes will trigger snap elections and install him as the nation's new leader.

The heads of political groups in Italy's senate will meet on Monday to set a date to hold the vote, the upper house press office said in a statement.

Salvini wanted lawmakers to be summoned back to Rome for a vote next week, saying the ruling coalition is unworkable after months of open bickering.

"Too many noes are hurting Italy, which instead needs to return to grow and therefore head to the polls quickly," the League said in a statement a day after Salvini pulled the plug on its coalition with the anti-establishment Five-Star Movement.

"Those who waste time are harming the country and only thinking about holding onto their posts."

Salvini's shock announcement, which followed a period of intense public feuding between the two parties, throws the eurozone's third-largest economy into deeper political uncertainty just as it was due to start 2020 budget preparations.

An election could be held as early as October.

Investors reacted by selling off Italian government bonds and stocks on Friday. Yields on 10-year bonds touched a five-week high, their biggest daily rise since May 2018. The Italian blue-chip index fell 2.3 per cent, with the turmoil helping to push other European stock markets lower.

Salvini said in a statement on Thursday he had told Prime Minister Giuseppe Conte, who belongs to neither coalition party, the alliance with Five-Star had collapsed after barely a year in power and "we should quickly give the choice back to the voters." He said cabinet meetings were dogged by disputes.

The head of state, President Sergio Mattarella, is the only one with the power to dissolve parliament, but he could first try to form a new government from the existing legislature before resorting to elections.

Salvini urged lawmakers on Friday to return to parliament in Rome and break their summer vacations.

"There's nothing to say that we cannot make parliamentarians work in the middle of August. Lawmakers should get off their bums and work."

Rail project apparent final straw for partners

The political crisis has jolted Italians out of their August torpor, with millions of voters holidaying on the beach and facing the first autumn election in Italy's post-war history.

"It's a mess basically," said Marta Bonora, a 21-year-old languages student in Milan, noting Salvini's crackdown on immigration meant other problems were being ignored.

Anna Scoccia, 63, who works at a newsstand in Rome, was also cynical: "This is all a big joke, it's another of Salvini's stunts to keep his popularity up. I don't believe we will go to elections but I am still terrified by what comes next."

Giuseppe Conte is Italy's head of state, but was a compromise choice of the coalition parties. He expressed dissatisfaction with Salvini's push for new elections at a news conference at Chigi Palace in Rome on Thursday night. (Alberto Pellaschiar/The Associated Press)

Conte turned on Salvini late on Thursday, demanding in a televised statement that Salvini explain to Italians why he wanted to bring down the government.

Until a few weeks ago Salvini had repeatedly said the government would last a full five-year term, but he brushed off Conte's criticisms and said Five-Star was holding up the policies the country needed to boost its stagnant economy.

Tensions came to a head on Wednesday when Five-Star and the League voted against each other in parliament over the future of a project for a high-speed train link with France.

Five-Star has more parliamentary seats than the League, but Salvini's party now has twice as much voter support, according to opinion polls, and it has recently threatened to try to capitalize on that surge in popularity with new elections.

However, it remains to be seen if things will go as Salvini plans. Pushing the nation back into election mode in August is unusual and could be unpopular and risky.

Mattarella may be unwilling to dissolve parliament ahead of preparatory work in September for the 2020 budget, which must then be presented to parliament the following month.

Italy, which has Europe's second-largest sovereign debt burden after Greece, has already angered the European Union with an expansionary 2019 budget and Salvini wants to make major tax cuts.

Fitch Ratings is due to review later on Friday its BBB rating on Italy's sovereign debt, which is two notches above junk status and carries a negative outlook.

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