Italy: government coalition is on the brink due to dispute over economic stimulus program

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Matteo Renzi: The party of the former Italian head of government gives the coalition a majority in the Senate

Photo: ALBERTO LINGRIA / REUTERS

The Italian government has been arguing about the planned economic stimulus program for days.

Now the coalition is on the brink.

The small coalition partner Italia Viva (IV) of former Prime Minister Matteo Renzi has threatened to withdraw his two ministers from the cabinet.

The Italian head of government Giuseppe Conte wants to implement his reconstruction plan against the resistance of Renzi's party.

One of the biggest points of contention is the allocation of the corona reconstruction aid that the EU has promised Italy.

Italy is to receive loans and credits from the EU of more than 200 billion euros.

The long postponed cabinet meeting about this is planned for Tuesday evening.

Should Renzi withdraw his support, the government led by Conte would no longer have a sufficient majority in parliament.

The non-party Prime Minister had advertised his economic stimulus program on Monday on the public TV broadcaster RAI, which is to be financed by funds from the European Union's Corona aid fund.

"We have to hurry," said the Prime Minister, referring to the April application deadline in Brussels.

Before this, Parliament also has to approve the program.

Renzi fears that millions in aid will be wasted

Renzi, on the other hand, fears that the millions in aid will be wasted and criticizes that too few long-term investments, for example to combat youth unemployment, are planned.

"It would be irresponsible to waste the money of the Italians and the Europeans," he told the Frankfurter Allgemeine Zeitung.

He and his party want to use the funds sensibly.

"If the government does the opposite, it has to do it without us."

Despite Renzi's concerns, observers expect the stimulus package to pass the cabinet.

President Sergio Mattarella had also spoken out in favor of approving the package.

If Renzi leaves the government, according to experts, a government reshuffle is to be expected.

Politics professor Roberto D'Alimonte and former advisor to Renzi told AFP that the ex-head of government was playing poker.

"I can't say how this game will end," he said.

"The possibilities are limited: Either a government reshuffle, a third Conte cabinet or a new government from the same coalition, but with a new prime minister."

Most experts consider new elections to be unlikely.

In polls, support for the ruling parties is currently waning, while the center-right is gaining popularity.

Conte received support from his other coalition partner, the populist five-star movement (M5S).

"Giuseppe Conte is the cement and cornerstone of this majority," said M5S boss Luigi di Maio on television on Tuesday.

"We will be loyal to the Prime Minister."

Italy was the first country in Europe where the corona pandemic got out of hand in spring 2020.

It is intended to be one of the main recipient countries of the EU's 750 billion euro package to deal with the corona crisis.

Italy wants to apply for almost 210 billion euros in EU funds from the aid fund, with a further 13 billion euros from other EU funds.

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