The coalition is currently led by Giuseppe Conte, the prime minister
Credit: Bloomberg
Italy’s government is expected on Tuesday evening to approve a 220-billion-euro coronavirus recovery spending package — and collapse shortly afterwards over a row on how to spend the money.
Former prime minister Matteo Renzi is widely expected to withdraw his small but pivotal Italy Alive (IV) party from the ruling centre-left coalition after complaining that the EU funds risked being wasted.
"The path is rather clear," an MP from the centre-left Democratic Party (PD) told AFP, predicting that the two ministers from IV will quit after an evening cabinet meeting.
Prime Minister Giuseppe Conte called the meeting after saying there was no time to lose in backing his plan, which must also receive parliamentary assent before being submitted to Brussels in mid-April.
"Either you spend it well or you spend it without us," Renzi said Monday about the EU funds, which are worth almost $270 billion.
Despite his misgivings, the spending plans were expected to be nodded through by the cabinet at the insistence of President Sergio Mattarella, to minimise delays in using the EU money.
Former PM Matteo Renzi is threatening to withdraw support from the coalition
Credit: AFP
Italy badly needs the loans and grants from the EU package to dig itself out of an economic hole caused by the pandemic, which plunged the country into a deep recession and has claimed more than 79,000 lives.
Renzi has expressed other complaints about the government, and if he pulls out it as expected, most analysts expect the ruling coalition to soldier on with a reshuffle — with or without Conte.
Renzi "is playing a hand of poker", said Roberto D’Alimonte, a professor of political science at Luiss University who advised the former premier when he was in office.
"I cannot tell you how the game will end," he told AFP. "The options are limited: either a reshuffle or a third Conte government or a new government with the same coalition but a new premier."
Italy was the first European country to face the full force of the pandemic and is one of the main beneficiaries of the EU’s 750-billion-euro recovery fund.
The government plan includes 209.9 billion euros from that fund plus another 13 billion in other EU money, totalling 222.9 billion euros.
Renzi complained the initial budget put too much money into hand-outs and not enough into investment, including dealing with long-term problems such as youth unemployment.
The new plan doubles the funds for healthcare and tourism, with 70 percent of the total reportedly focused on investments.
But one of Renzi’s two government ministers, Agriculture Minister Teresa Bellanova, said Tuesday that the detail she had seen so far was "absolutely inadequate".
The populist Five Star Movement (M5S), the biggest party in parliament, is standing by the prime minister.
"Giuseppe Conte has been the glue and the cornerstone of this majority," M5S Foreign Minister Luigi Di Maio told Italian television Tuesday.
"He obtained the 209-billion Recovery Fund and now they want to spend it, they want to do away with him…. We will be loyal to the prime minister."
Conte, a former law professor who has never personally been elected, has already navigated one crisis since taking office after the last elections in 2018.
In 2019, the anti-immigration and eurosceptic League party pulled out of what was then a right-leaning government with the M5S.
But Conte stayed on at the helm of a new centre-left administration including the M5S, the centre-left PD and smaller allies.
Lorenzo Castellani, a political specialist at Luiss University, said the premier has been playing a waiting game. "Now his strategy is forcing Renzi to show his cards for real," he told AFP.
Snap elections remain a possibility but most analysts view them as unlikely, with opinion polls showing the ruling parties would lose power to centre-right rivals.
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