Italy is moving towards forming a second Giuseppe Conte-led government following an agreement between the 5-Star Movement and the centrist Democratic Party after Conte – who is widely regarded as a pro-business centrist and a political independent – was summoned by President Sergio Mattarella to the presidential palace on Thursday to be given the mandate to form a new cabinet that will enjoy a parliamentary majority.
Markets reacted positively, with the Italian spread rallying against the German 10-year Bund.
5-Star leader Luigi Di Maio and Democratic Party leader Nicola Zingaretti will continue to debate the government’s programme, which will have a mandate that expires in 2023. Di Maio also hailed President Donald J. Trump‘s support during the G7 summit for Conte to remain at the helm of the Italian government.
The Democratic Party initially insisted that a new prime minister would be needed to guide policies that would break from those of the 14-month-old coalition government led by 5-Star and Matteo Salvini‘s Lega.
In a surprise move, the founder of 5-Star, the comedian-turned-politician Beppe Grillo, issued a statement late on 28 August saying that the new government should be composed of technocrats and not elected politicians.
Zingaretti, however, is likely to object to Grillo’s plan as the former has put a priority on the formation of a government that will introduce politically meaningful policies, including focusing on social cohesion and environmental sustainability.
One of the Democrats’ main demands for the new government is a clean break with Salvini’s crackdown on illegal immigrants. 5-Star plans to back this particular demand by the Democrats, but Di Maio has made clear that his party’s number one priority is a cut in the number of Senators from 945 to 600.
Salvini pulled the plug on Lega’s governing coalition with 5-Star in early August and later called for snap elections to be held in October. Salvini was keen to trigger an election as national polls have indicated that Lega could form a single-party government as Italy’s most popular political party.