Italy 'playing with fire' as coalition picks novice PM
A law professor with zero political experience was nominated as Italy's next prime minister yesterday as the EU warned that the country's nascent populist government was "playing with fire".
After 11 weeks of political paralysis, Luigi Di Maio, head of the anti-establishment Five Star Movement, and Matteo Salvini, leader of the hard-right League, presented their choice for prime minister to Sergio Mattarella, the president.
Giuseppe Conte, who teaches law at universities in Rome and Florence, will likely lead the first Eurosceptic government elected by a founding member of the EU. He was chosen as a neutral, acceptable compromise candidate by the two party leaders, who both ruled themselves out of the top job.
Ironically, Mr Conte appears to be just the kind of establishment, academic "technocrat" that the Five Star Movement has spent years railing against.
He could have a tough challenge acting as go-between - the League and Five Star diverge on some key issues and the personalities of their leaders are very different.
Mr Conte is not an MP, nor a member of either of the parties, but is said to be close to Five Star. Renowned as a sharp dresser with a penchant for waistcoats, cufflinks and pocket handkerchiefs, the 54-year-old is separated from his wife, with whom he has a 10-year-old son.
Mr Mattarella has to approve the nomination before the parties can choose a cabinet. They will then have to put the whole package to a vote of confidence in parliament.
Mr Di Maio is tipped to become minister for labour and welfare, while Mr Salvini could become interior minister, enabling him to put into action his plan to expel half-a-million unauthorised migrants, whom he has called "delinquents" and "layabouts".
The prospect of a government that is deeply hostile to austerity policies imposed by Brussels and wants spending limits relaxed unnerved the markets.
Italy's borrowing costs surged yesterday and Italian stocks fell as much as 2.1pc in early trade before rebounding a little.
The EU is alarmed by the parties' promise of a giant spending spree which, it has been estimated, could cost the country €100bn a year.
Italy's debt is 130pc of GDP - the highest in the eurozone after Greece - and the parties have not clearly explained how the new measures would be paid for.
The parties have pledged to cut income tax rates to as low as 15pc, introduce a universal minimum income of €780 a month for the poor, and water down a 2011 pension reform.
While the coalition has backed down on some of its more extreme policies, such as ditching the euro or asking for the cancellation of €250bn of Italian government debt by the ECB, "it still appears to leave Italy on a collision course with the EU," said Nicola Nobile, lead economist with Oxford Economics.
If, as many observers expect, the new government fails to last for long, "the EU will be blamed and this is likely to lead to an unprecedented institutional crisis across the region," said Mr Nobile. (© Daily Telegraph, London)