April 4, 2018 / 11:34 AM / 5 months ago

Italian president tries to solve government riddle

ROME (Reuters) - Italian President Sergio Mattarella launched a first round of formal consultations on Wednesday aimed at creating a coalition government after a March national election resulted in a stalemate.

Last month’s vote saw the anti-establishment 5-Star Movement emerge as the largest single party, while an alliance of centre-right and far-right parties took the biggest bloc of seats. However, both groups fell well short of an absolute majority.

It may take many weeks to find a solution. A source within Mattarella’s office told Reuters the president was not expecting a new government to take shape before July and warned that if no deal was possible, a new election would be inevitable.

Here are some of the possible scenarios:

5-STAR AND THE LEAGUE

The scenario most feared by markets is a straight marriage between 5-Star and the far-right League. The two would have a parliamentary majority and there are some overlaps in their manifestos, with both calling for tax cuts, higher welfare spending and a rejection of European Union budget rules.

However, for such a deal to be struck, the League would have to abandon its key alliance partner — Silvio Berlusconi’s Forza Italia (Go Italy!). The 5-Star has also insisted that its leader, Luigi Di Maio, should be named prime minister. League leader Matteo Salvini has rejected both pre-conditions.

5-STAR AND PD

In a television interview on Tuesday, Di Maio proposed a German-style governing contract with either the League or else the centre-left Democratic Party (PD), which lost heavily in March. A tie-up with the PD would be more reassuring for markets and there is some overlap between the two groups on social issues. The PD, which was lambasted by 5-Star during its recent 5-year spell in office, has repeatedly said it wants to move into the opposition to rebuild its shattered camp. However, it would face a dilemma if the only alternative was an early election because opinion polls suggest it would lose even more seats if there were a swift fresh ballot.

RIGHTIST BLOC WITH SOME OPPONENTS

League leader Salvini says the right, as the largest parliamentary bloc, should be given a mandate to govern. But to form a government, it needs to secure the backing of at least 50 lawmakers in the lower house and around 20 in the upper house Senate. Without a formal alliance with either the PD or 5-Star it is hard to see where this support might come from. While Salvini has ruled out any coalition with the PD, his ally Forza Italia has pushed for such a hook-up. The PD has also ruled out working with the League, which, like 5-Star, repeatedly denounced the outgoing centre-left government.

ALL IN

The idea of 5-Star, the PD and the centre-right parties all joining together is another option. This would give 5-Star, as the biggest party, a major stake in government, with all parties agreeing before its formation what the government should do while in power. The lifespan of such an administration would be about a year, in theory, though it could end up lasting longer. During the campaign, 5-Star appeared open to such a solution in the case of electoral deadlock, as long as others accepted its conditions. However, Salvini’s refusal to govern with the PD and Di Maio’s refusal to govern with Berlusconi now make this seem problematic.

ANOTHER ELECTION

President Mattarella is the man pulling the strings in the post-vote period. If he fails to stitch together a government, he will have no choice but to dissolve parliament and repeat the vote sometime in the autumn. That is the option the president most wants to avoid, sources told Reuters before the election.

Reporting by Crispian Balmer and Gavin Jones; Editing by Gareth Jones

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