Italy: 5-Star, PD Clash Over Leadership, Salvini Wants Election

U.S. President Donald Trump weighed into Italy’s political crisis Tuesday, saying he hoped right-wing populist Giuseppe Conte would be reinstated as prime minister, as the climate improved in party talks to form a new government.

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The role of Conte has been a sticking point in the negotiations between the 5-Star Movement, a member of the outgoing coalition, and the opposition Democratic Party (PD), which has been resisting his reappointment.

“Starting to look good for the highly respected Prime Minister of the Italian Republic, Giuseppi (sic) Conte,” Trump said on Twitter. “A very talented man who will hopefully remain Prime Minister.”

After setbacks early Tuesday the roller-coaster talks between the 5-Star and the center-left PD appeared to be back on track later in the day, with upbeat comments from both sides prompting a strong market rally.

Investors betting Italy can avoid a snap election are concerned that it would be won by Matteo Salvini’s hard-right League party, which would put the country on a collision course with the European Union over expansionary government spending.

The PD’s Senate leader Andrea Marcucci said as he entered a meeting of the party’s top brass in Rome, that contacts with 5-Star had resumed and progress was being made.

5-Star responded that it welcomed signs from the PD that it had dropped its veto against Conte, and the PD’s Marcucci later announced that parliamentary leaders of the two parties would meet at 1600 GMT to try to hammer out their differences.

The PD and 5-Star are due to report back to President Sergio Mattarella Wednesday, and if no deal is sealed by then he will name a caretaker government and call early elections.

Conte, who belongs to no party but is close to 5-Star, resigned last week after League chief Salvini declared his 14-month coalition with 5-Star was dead, seeking to trigger elections and capitalize on his surging popularity.

The move has not gone to plan, as 5-Star and the PD seek to form a coalition of their own, pushing the League into opposition.

Earlier on Tuesday, the PD/5-Star talks seemed to have run into trouble, with the two sides fighting over key jobs as well as being at loggerheads over Conte’s role.

It remains to be seen if the exchanges are merely tactics to secure the upper hand in negotiations over cabinet jobs, or whether they have the potential to scupper a deal between the two parties which have always been bitter adversaries.

Meanwhile, Salvini continues to demand elections and is likely to be disappointed by Trump’s endorsement of Conte, especially as the far-right League chief has always expressed his admiration for the U.S. president.

Opinion polls suggest the League has lost 3-7 percentage points since collapsing the government, though it remains easily the most popular party, followed by the PD and 5-Star.