Italian govt set for make-or-break meeting on EU funds

Rome (AFP) –

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Italy's government was expected Tuesday to approve a plan to spend 220 billion euros in EU post-coronavirus aid -- but risked imploding shortly afterwards.

Former prime minister Matteo Renzi was widely expected to withdraw his small Italia Viva (IV) party from the ruling coalition, bringing weeks of sniping from the sidelines to a head.

He has complained about Prime Minister Giuseppe Conte's handling of the coronavirus pandemic, which has left almost 80,000 people dead in Italy, as well as his plan for spending the EU funds.

Conte had hastily rewritten the plan and it was expected to win cabinet approval at the meeting late Tuesday, but the personal animosity between him and Renzi has reached boiling point.

President Sergio Mattarella had pressed the cabinet to green-light the spending plan before any ministerial resignations, to minimise delays in using the EU money.

Renzi appeared to confirm speculation that his two ministers would quit, telling reporters ahead of the meeting Tuesday: "I think Conte will replace the Italia Viva ministers who resign."

He promised more details on Wednesday, but said he expected the premier would then seek a vote of confidence in parliament -- a course of action also hinted at by Conte's own aides.

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.

- Vote of confidence -

Conte could seek to placate Renzi by submitting his resignation to Mattarella to seek a quick reappointment at the helm of a new cabinet, with a bigger role for Italia Viva.

But as Renzi suggested, he could call a vote of confidence in parliament, in the hope of convincing opposition lawmakers to fill the gap in his coalition.

A source close to Conte told AFP it would be "impossible" for the prime minister to form another government with Italia Viva if Renzi quits.

The new government would be the third under Conte since 2018, all of them including the populist Five Star Movement (M5S), the biggest party in parliament -- which is still backing him.

"Giuseppe Conte has been the glue and the cornerstone of this majority," M5S Foreign Minister Luigi Di Maio told Italian television.

"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."

Italy is one of the main beneficiaries of the EU recovery fund, allocated a mix of loans and grants it badly needs to dig itself out of the deep recession sparked by the pandemic.

The spending 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.

- Political history -

Conte, a former law professor who has never personally been elected, has already navigated one crisis since being appointed after the last elections in 2018.

In 2019, Matteo Salvini's 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 Democratic Party (PD) and smaller allies.

Snap elections remain a possibility but most analysts view them as unlikely, with opinion polls suggesting the ruling parties would lose power to centre-right rivals.