Salvini ambush sparks Italy political crisis

Rome - Italy was plunged into political uncertainty after Interior Minister Matteo Salvini pulled support for the government coalition and called for snap elections while parliament was on summer recess.

The heightened political tensions in the heavily-indebted country -- the eurozone's third largest economy -- rattled financial markets, where yields rose on Italian government bonds.

Prime Minister Giuseppe Conte, who has held several rounds of talks to try to ease the crisis in the 14-month-old government, angrily called on Salvini to justify his move.

Salvini has clashed frequently in recent weeks with his fellow Deputy Prime Minister Luigi di Maio of the anti-establishment Five Star Movement (M5S) over a range of policies.

He upped the pressure late Thursday, saying there was no longer a majority to support a government and calling for new elections "quickly" -- which could see Italy head to the polls from as early as October.

"Autumn coincides with key moments, like the budget law. Elections in that period are unprecedented," Massimo Franco, a columnist for Italy's biggest selling Corriere della Sera daily, told AFP.

Long-rumbling tensions between the coalition's populist leaders have peaked in recent days, with a row over the financing of a multi-billion-euro high-speed train line between the Italian city of Turin and Lyon in neighbouring France.

The populist government is struggling to rein in its budget deficit and a mammoth debt mountain of more than 2.3 trillion euros.

On financial markets, the closely-watched spread between Italian 10-year government bonds and the benchmark German bond -- which is a measure of the added risk perceived by investors to holding onto Italian debt -- jumped to 241 basis points by Friday evening.

Italian government debt and deficit


- 'Voice for the people!' -


The sudden political crisis caught many in Italy off guard, with both houses of parliament currently on recess for the summer holidays and not due back until September.

Salvini's League said Friday it had tabled a motion of no-confidence against Conte in the Senate.

Under Senate rules, any such motion has to be addressed within 10 days, so no later than August 20.

The president of the Senate has called for the heads of the parliamentary groups to meet Monday to set a date to discuss the motion. A similar meeting in the lower house is expected on Tuesday.

If the motion passes there, Conte would have to present his resignation to Italy's President Sergio Mattarella, who could start the countdown for elections to be held within 70 days.

Salvini said his members of parliament would be back at their desks on Monday.

Power struggle between Matteo Salvini and Luigi Di Maio

"Those who delay are just trying to save their seats in power," he said on Twitter Friday. "Give the people a voice immediately!".

An early election would likely benefit Salvini, with opinion polls putting his League party ahead, leaving open the possibility that it could govern in alliance with another, smaller far-right party, Fratelli d'Italia (Brothers of Italy).

It reflects a change in fortune for Italy's coalition partners since last year, when M5S took 32 percent of the vote at the general election, and the League 17 percent.

In the European elections in May this year, the League took the most votes in Italy with 34 percent against 17 percent for M5S.

Di Maio said his M5S party "is ready" to return to the polls.


- Far-right rise? -


Mattarella, who left Friday for a few days of vacation in Sardinia, has the sole power to dissolve parliament.

He insists there must be a government in place to finalise the budget, a first draft of which has to be submitted to EU authorities by the end of September.

To that end, he could name a government of technocrats and push elections back to February or March, although this would be unpopular with Italians.

"This government has been over for a while," political analyst Stefano Folli told AFP.

"In a few months' time we'll have a right-wing government, for the left is weak and the M5S is in crisis."

A longtime observer of Italian politics, Luigi Contu, director of the Ansa news agency, said elections are "very probable", but that Salvini is not assured of gaining a majority in the Senate, whose members are elected on a regional basis.

"Salvini at this exact moment is at the top in opinion polls, but we still have three months ahead of us," he said.

The left vowed not to roll over, with former prime minister Paolo Gentiloni tweeting that Salvini was "asking for full powers to take us out of Europe. It will not happen".

Federico Santi, senior Europe analyst with Eurasia Group, said a League-Brothers government would "have a more explicitly pro-business outlook, but an even more virulently nationalist and eurosceptic orientation" than the present one.

By Ella Ide