Anti-establishment and nationalist parties in Italy reached a new coalition deal on Thursday (31 May) reviving their plans to take power, narrowly avoiding snap elections and setting in motion an anti-austerity government in the eurozone’s third largest economy.
On Thursday evening President Sergio Mattarella gave a mandate for the second time to Giuseppe Conte – the populist’s pick for prime minister.
Italy has been in the throws of political turmoil for almost three months after inconclusive March elections, rocking financial markets and spreading unease among its euro partners.
Conte – a little know lawyer and political novice – announced his picks for the country’s future cabinet after meeting with Mattarella.
- From the coalition, far-right League leader Matteo Salvini was named interior minister while Five Star Movement leader Luigi Di Maio is slated to become minister for economic development.
- Paolo Savona, the Eurosceptic economist who the populist coalition originally wanted for economy minister but was rejected by Mattarella, is still part of the cabinet as European Affairs minister.
- The role of economy minister was given to the less controversial Giovanni Tria, a political economist who advocates slashing taxes but is in favour of keeping Italy in the euro.
- Brussels savvy Enzo Moavero Milanesi was appointed minister of foreign affairs.
Giuseppe Conte approved for Italian prime minister
Italy’s president on Wednesday (23 May) approved little-known lawyer Giuseppe Conte’s nomination to be prime minister of a government formed by far-right and anti-establishment parties.
Nationalist leader not “promising any miracles”
According to Italian media the populist line-up will face a vote of confidence in both houses of parliament on Monday or Tuesday.
“Without promising any miracles, I can say that, after the first months of this government of change, I would like us to have a country with a little less tax and a little more security, a few more jobs and a few less illegal immigrants,” said a gleeful Salvini at a rally after the annoucement.
Just forty-eight hours ago Italy had looked to be on course for snap elections after coalition talks between the anti-establishment Five Star Movement and far-right League party collapsed over the weekend.
Savona was at the centre of a standoff between Sergio Mattarella and the parties now poised for power after the president refused to give his blessing to the coalition’s government lineup because it included the 81-year-old eurosceptic.
But the two parties reached a new coalition deal Thursday reviving their plans to take power with Giuseppe Conte at the helm.
Brussels lies low as Italy crisis continues
The European Union is treading cautiously as the political crisis in Italy fuels fear of a renewed threat to the long-term credibility of the eurozone.
Savona, a eurosceptic economist
A fierce critic of the Maastricht Treaty and the euro, Savona has a career in finance and economics that stretches back to the 1960s, and was Minister of Trade and Industry during fellow banker Carlo Ciampi’s short-lived technical government in the early 1990s.
In his latest book, “Like a Nightmare and a Dream”, Savona calls the single currency a “German cage”, and his hostility to the euro provoked a flurry of warnings from Brussels as Mattarella hesitated over his appointment.
Salvini defended the coalition’s economy minister pick, saying on Thursday: “When you have the best available you go for the best. He is the guarantee that Italy can sit at table as a key player.”
But Savona in his book strikes a decidedly more hardline tone, writing that “we need to prepare a plan B to get out of the euro if necessary … the other alternative is to end up like Greece.”
In the book he attacks Italian officials who decided to take Italy into the euro, which he claims has “halved Italians’ purchasing power”, the European Central Bank (ECB) and its president Mario Draghi, and in particular Germany.
“Germany didn’t change its idea on its role in Europe after the end of Nazism, even is it abandoned the idea of imposing itself militarily,” he writes.
However he defends himself against charges of being Europhobic, saying that he is simply criticising institutions that are failing the European people.
“I’m passed off as one of those rare anti-European institutional economists but it is not true. I would be in favour of a united Europe in principle, and that’s why I talk about the worst of what I see today in Brussels,” Catholic daily Avvenire quote him as saying.
“Europe’s difficulties are down to the elites who run it: they say they take care of the people but they only take care of themselves.”
Commission demands 'credible response' from Italy to reduce debt
The European Commission on Wednesday (23 May) approved Italy’s efforts to balance its public accounts but asked the new government for a “credible response” in order to further reduce its immense public debt.
Born in the Sardinian capital Cagliari in October 1936, Paolo Savona began his career at the Bank of Italy after gaining a master’s degree in economics and commerce in 1961.
He then specialised in monetary economics at the Massachusetts Institute of Technology (MIT) and in 1976 he returned to Sardinia, leaving the Bank of Italy to become Professor of Economic Policy at the University of Cagliari.
He was director general of business association Confindustria, president of a small Sardinian bank and then head of the Banca Nazionale del Lavoro (BNL), a major Italian bank.
He has also been a member and sometimes chairman of a number of boards, including of Aeroporti di Roma and Telecom Italia. On Wednesday he resigned as chair of London-based investment fund Euklid.
Vincenzo Visco, current head of the Bank of Italy and a former finance minister in leftist governments between 1996 and 2000, told the Corriere della Sera that Savona “has all the capacity and credibility” to fill the post but “two big problems”.
The first, Visco says, would be applying an anti-austerity programme negotiated by Five Star and the League, “which he knows to be completely inapplicable” given Italy’s 2.3 trillion euro public debt.
The second, according to Visco, would be that his political positions are “radically and suicidally anti-German … that could create problems both for him and for us”.