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Italy's Conte wins parliamentary backing, promises tough EU talks

ROME (Reuters) - Prime Minister Giuseppe Conte comfortably won a confidence vote in the lower house of parliament on Wednesday, confirming his government’s majority after promising tough negotiations with Europe over the economy.

Italian Minister of Labor and Industry Luigi Di Maio talks with Prime Minister Giuseppe Conte during his first session at the Lower House of the Parliament in Rome, Italy, June 6, 2018. REUTERS/Tony Gentile

Conte, backed by the anti-establishment 5-Star Movement and the far-right League, won an initial vote in the Senate on Tuesday and can now forge ahead with his coalition program, which includes tax cuts, benefit hikes and justice reform.

The opposition accused the 53-year-old lawyer, who has no political or administrative experience, of being a puppet in the hands of his two coalition partners and said he had made a string of pledges that debt-laden Italy could never afford.

Conte told the lower house that his government aimed to increase growth and simultaneously reduce the debt mountain -- the third largest in the world in absolute terms.

“We will negotiate at the European level ... and we hope to have the firmness and determination needed to be listened to by our partners,” he said.

He won the lower house confidence motion by 350 votes to 236, with 35 parliamentarians abstaining.

The League and 5-Star have vowed to adopt an uncompromising line with the Europe Union over the nation’s finances, complaining that current fiscal rules are too rigid, focusing heavily on deficit reduction rather than economic growth.

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Investors worry the government’s big-spending plans will jeopardize fragile state accounts and Italy’s bonds came under renewed pressure on Wednesday, amid signals the European Central Bank was preparing to wind down massive stimulus that has hugely benefited the eurozone’s sovereign debt market.

Italy’s 10-year government borrowing costs jumped 19 basis points on the day to 2.93 percent. They were hovering around 2 percent ahead of March 4 national elections, which saw 5-Star and the League defeat mainstream parties.


Implacable electoral rivals, the two groups have taken weeks to put together their coalition pact and draw up a cabinet team that they say will bring radical change to Italy, which has been dogged for years by low growth and high unemployment.

Conte promised on Wednesday to invest in infrastructure, but there are likely to be tussles in the coalition over priorities. 5-Star has focused on environmental concerns, while the League has traditionally backed big industrial projects.

The new environment minister, who was nominated by 5-Star, raised questions over the future of a $40 billion international gas pipeline in Italy, telling Reuters the project was “pointless”. The League made no immediate comment.

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The Trans Adriatic Pipeline (TAP) is the final stage of a link that takes gas from central Asia to western Europe. It is a cornerstone of the European Union’s energy security policy, which aims to wean the bloc off Russian gas supplies.

Opposition critics accused Conte of spouting generalities in his two long speeches to parliament over the past two days and condemned him for telling lawmakers he was proud to lead a government that some have defined as “populist”.

“You claimed to be populist, but horrible crimes have been committed in this country in the name of populism, racial laws approved and genocide committed in Europe,” said Graziano Delrio, a senior figure in the center-left Democratic Party.

Conte is set to make his international debut later this week in Canada at the annual gathering of the group of seven major industrialized nations.

“The first task for Italy (at the G7) will be to make itself known, the second will be to be respected,” Conte told parliament.

Additional reporting by Massimiliano Di Giorgio and Gavin Jones; editing by Andrew Roche