Italy Hands ‘Mr. Nobody’ Second Shot at Forging Stable Government

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Italy Hands ‘Mr. Nobody’ Second Shot at Forging Stable Government(Bloomberg) -- As prime minister of Italy for 18 months, Giuseppe Conte, led an unstable coalition of two disparate parties that collapsed in chaos earlier in August. On Thursday, he got the chance to try again.The government that emerges may prove no more stable than the last one.Conte, 55, has been tasked by Italy’s president with forming a government supported by the Five Star Movement and the Democratic Party, or PD, two long-time rivals who have little more in common than the desire to avoid snap elections.The only glue that holds them together: “hatred for the League,” according to League leader Matteo Salvini. Indeed, their unlikely alliance was spurred by the need to avoid an electoral drubbing from the League after Salvini brought down the previous coalition.With a commanding lead in the polls, Salvini, 46, was counting on a snap vote to take power himself. Instead, President Sergio Mattarella handed Conte a mandate to form another government.Marathon MeetingsConte had zero political experience before he was drafted 15 months ago to act as mediator between the anti-establishment Five Star and the rightist League.Detractors dubbed him “Mr. Nobody,” but Conte carved out a role for himself despite having no base of his own. Drawing on his background as a lawyer, he held cabinet meetings late into the evening, grinding down Salvini and Five Star leader Luigi Di Maio.The next coalition will also be built on brittle foundations. The PD is the party of the center-left establishment and provided three of the past four prime ministers. Five Star grew up in opposition and surged to prominence vowing to do away with the past, pointedly and repeatedly ripping into the PD as a corrupt, entitled, out-of-touch force of the past.Before he can take office, Conte will have to iron out the final details of a coalition agreement.The Democrats continue to object to Di Maio’s demand to stay on as deputy prime minister, arguing that Conte is essentially a Five Star figure and that party shouldn’t have the government’s top two jobs.Conte does at least have the support of investors, who pushed Italian yields to record lows as his prospects of a return increased.He has also gathered the confidence of some fellow world leaders. President Donald Trump openly endorsed him for a second term after they chatted at the Group of Seven summit in Biarritz, France last weekend. Even detractors acknowledge that he has deftly managed negotiations with the European Commission, twice avoiding sanctions over Italy’s excessive debt.If he can seal an agreement with the two parties, his main task will be avoiding a nasty clash with the European Union over the nation’s 2020 budget.The new Five Star-PD government will seek to keep Italy’s 2020 budget deficit within EU limits, according to three officials who asked not to be named discussing confidential plans.The decline in yields is already making the new government’s job easier. That could save the Treasury more than 1% of gross domestic product on an annual basis, according to a back-of-the-envelope calculation by Frederik Ducrozet, global strategist at Banque Pictet & Cie.(Updates with Conte’s mandate starting in the first paragraph.)To contact the reporters on this story: Jerrold Colten in Milan at jcolten@bloomberg.net;John Follain in Rome at jfollain2@bloomberg.netTo contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, ;Ben Sills at bsills@bloomberg.net, Richard Bravo, Alessandro SpecialeFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.


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