Italy's Renzi under pressure over influence peddling scandal

ROME (Reuters) - Italy’s main opposition parties said on Friday they would present a no-confidence motion in Prime Minister Matteo Renzi’s government after his industry minister quit in a scandal over allegations of influence peddling.

Italian Prime Minister Matteo Renzi speaks condemning the attacks in Belgium, during a news conference at Palazzo Chigi in Rome, Italy, March 22, 2016. REUTERS/Stefano Rellandini

While Renzi should be able to ride out this latest of several political storms, it comes as Italy gears up for pivotal elections in June and the economy shows signs of flagging.

Federica Guidi quit on Thursday, hours after phone-tapped conversations released by police appeared to show the minister assuring her partner the government would pass legislation that helped his energy business.

She told Renzi in a letter she had done nothing wrong, but felt it necessary to resign.

Renzi, who took office two years ago vowing to end the cronyism that has often marred Italian politics, told reporters that although Guidi had committed no crime, she had made an “inappropriate” phone call and had been right to quit.

The anti-establishment 5-Star Movement, Italy’s second largest party, dismissed his comments and said it would present its no confidence motion in the upper house Senate next week.

“This matter calls into question the whole government ...It always puts people in charge who are in the pay of the lobbies or who are looking out for themselves,” said Luigi Di Maio, one of the 5-Star’s leading lights.

The 5-Star and other opposition parties also called on a close Renzi ally, Maria Elena Boschi, the minister for parliamentary relations, to resign over allegations that she connived with Guidi.

The phone taps show Guidi telling her partner that Boschi had assured her the amendment would pass.

Boschi faced down resignation calls in December following a banking scandal that left thousands of savers out of pocket.

Newspapers on Friday quoted her as saying she had no idea that Guidi even had a partner.

Renzi on Friday defended the contested amendment, which was added to the 2015 budget law and benefited the whole oil and gas sector by streamlining permissioning for projects.

“We are talking about a provision that brings jobs,” he said during a trip to the United States. “It is sacrosanct.”

Government critics say the scandal could help swing an April 17 referendum on whether Italy should restrict offshore oil and gas drilling. Renzi has urged voters to abstain.

The opposition hopes the ruckus will also damage the center-left at municipal elections in a number of cities in June, with the government already under pressure over the economy.

Data on Friday showed unemployment hit 11.7 percent in February, a disappointment to Renzi whose cornerstone economic reform has been an overhaul of labor norms aimed at encouraging companies to take on staff.

Additional reporting by Gavin Jones and Isla Binnie; editing by John Stonestreet