Italian President fiddles while Rome burns, vetoes Coalition nominees

Italy’s president, Sergio Mattarella, refused to give consent to the designated Prime Minister’s picks for high office.

His reasoning was that he didn’t fancy the political perspective that they represented, namely that of the Finance Minister nominee proposed by Giuseppe Conte, who has withdrawn his role as the designated Prime Minister.

Conte was designated by a coalition of the 5 Star Movement and the League, two Italian political parties on opposing sides of the political aisle, after months of back and forthing.

Yesterday, Matarella vetoed Conte’s nominees, saying that he feared that they could endanger Italy’s participation in the EU.

RT reports:

Italian President Sergio Mattarella has used a shady pretext to turn down a Euro-skeptic coalition pick for economy minister, as he seeks to mold a cabinet after own political views, an MP from the coalition told RT.

Manlio Di Stefano, an MP from the anti-establishment Five-Star Movement (M5S), which has teamed up with Lega Nord in a parliament, argued that it was Mattarella’s fault that Sunday did not bring a much-desired end to the two-month long post-election stalemate. Mattarella on Sunday rejected the candidacy of former industry minister and a distinguished economist, Paolo Savona, who was suggested by the coalition to fill the post of the minister of economy.

“I asked for a figure, who would mean not risking an exit from the euro,” Mattarella explained, citing Savona’s Euro-sceptic remarks.

Stefano argued that Mattarella has gone well beyond his powers by rejecting Savona’s candidacy based on his political views.

“You can be a problem if you have a trial, you can be a problem if you’ve been found guilty for something, but not because you have some good ideas, or, any idea in a political sense. There is a constitution defending political ideas and opinions,” Stefano said.

Mattarella’s claims that Savona is a danger to Italy’s stay in the eurozone lack any ground, Stefano argued, since Savona’s current stance is that Italy can assert its place in European economics without necessarily abandoning the euro.

“The incredible point is that Savona was the first telling us that Italy has to stay in the EU and Eurozone, but it has to be stronger institutionally to bring some points at home,” Stefano said.

Given that, Mattarella’s reasoning seems tailored to serve his own political agenda, the M5S member said.

After the coalition’s bid to form a new government failed, Mattarella summoned Carlo Cottarelli, a former senior official at the International Monetary Fund (IMF), to his office. It is believed that Mattarella will ask Cottarellli to head the government.

“The incredible thing is that President Mattarella has not only stopped this government, but is trying to force the government that is the expression of his own will,” Stefano said.

In case Mattarella makes Cottarelli PM-designate, the latter “will not have any chance to create the government,” the MP said. “We will never support the kind of a different government than us,” he stressed.

Arguing that Mattarella has broken all the rules of an established European democracy, Stefano described his conduct as “something without any historic record until today.”

Mattarella’s objection to the economy minister candidacy earlier drew the ire of MS5 leader Luigi Di Maio, who called the president’s decision “incomprehensible” and called for his impeachment.

Matarella’s actions have brought some fundamental questions to the fore as he did not mask the fact that he vetoed Savona’s nomination on the basis that he did not approve of Savona’s political opinions, something that is supposed to be protected under Italy’s constitution.

In fact, Matarella seems intent on position his own candidates, having sent the Parliament’s picks down the drain, potentially leading to new elections, during which interim, his political agenda continues to realize implementation.

He precisely wants to preserve cooperation with the EU and continue the course of action that his administration has followed to date.

France24 reports:

Efforts to form a coalition government collapsed on Sunday after the Italian president rejected a eurosceptic pick for the key economy ministry, triggering a possible constitutional crisis and opening the prospect of fresh elections.

The leaders of the two parties trying to field a government, the far-right League and anti-establishment 5-Star Movement, accused President Sergio Mattarella of abusing his authority and working under the orders of European powers.

5-Star leader Luigi Di Maio, whose party won the most seats at an inconclusive March 4 vote, demanded that parliament impeach Mattarella, raising the spectre of political turmoil in the euro zone’s third biggest economy.

Financial markets tumbled last week on fears the mooted coalition would unleash a spending splurge and increase Italy’s already huge debt mountain, which is equivalent to more than 1.3 times the nation’s domestic output.

Looking to allay investor concerns, Mattarella vetoed on Sunday the choice of 81-year-old economist Paolo Savona, a vocal critic of the single currency, to the pivotal economy post.

Prime Minister-designate Giuseppe Conte promptly abandoned his efforts to form a government.

In a sombre, televised speech, Mattarella said he had accepted all the suggested ministers bar Savona.

“I asked for that ministry an authoritative political figure from the coalition parties who was not seen as the supporter of a line that could provoke Italy’s exit from the euro,” he said.

Shortly afterwards, he summoned former International Monetary Fund (IMF) senior official Carlo Cottarelli for a Monday morning meeting — an indication he may be considering asking him to head a government of unelected technocrats.

Voter anger

Cottarelli would be a calming choice for the financial markets, but any technocrat administration would likely only be a short-term solution because the majority of parliamentarians have said they would not support such a government.

If he failed to win parliamentary backing, Cottarelli would stay in office in a caretaker capacity ahead of elections that would most likely be held in September or October.

Polls have suggested that the League, which won 17 percent of the vote in March, would see its support surge in any early ballot, while support for 5-Star remained strong.

Mainstream centre-left and centre-right parties were seen losing further ground in the face of voter anger over the sluggish economy.

League leader Matteo Salvini responded furiously to Mattarella’s refusal to rubberstamp Savona.

“If there’s not the OK of Berlin, Paris or Brussels, in Italy a government cannot be formed. It’s a folly, and I ask the Italian people to stay close to us because I want to bring democracy back to this country,” Salvini told reporters.

News of Mattarella’s veto sent a shockwave through Italy.

The leader of the nationalist Brothers of Italy party, which had an electoral pact with the League, said the head of state should be impeached, accusing him of abusing his position.

“We will ask parliament to charge Mattarella with high-treason because he has acted under foreign pressure,” Brothers of Italy chief Giorgia Meloni said on La7 television channel.

The 5-Star’s Di Maio also demanded impeachment under article 90 of the constitution. Under that clause, parliament can demand a president leave office if a simple majority of lawmakers votes in favour. The constitutional court would then be called to decide whether to impeach or not.

“After tonight, it’s truly difficult to believe in the institutions and the laws of the state,” Di Maio said.

Experience

On Friday, the closely watched gap between the Italian and German 10-year bond yields, seen as a measure of political risk in the euro zone, was at its widest in four years at 215 basis points.

After markets had closed on Friday, Moody’s said it may downgrade the country’s sovereign debt rating because of the risk that the would-be government would weaken public finances and roll back a 2011 pension reform.

Facing Mattarella’s veto, Savona tried on Sunday to allay concerns about his views in his first public statement on the matter.

“I want a different Europe, stronger, but more equal,” Savona said in a statement.

He also said his position on debt was the same as that forged by the potential coalition allies in their programme – which says it will be reduced not through austerity or tax cuts, but through targeted investments and policies that boost economic growth.

Savona has had high-level experience at the Bank of Italy, in government as industry minister in 1993-94, and with employers’ lobby Confindustria. But his critical stance on the euro has been the focus of concern.

In Sunday’s statement Savona did not mention his opinions on the euro, but more than 70 slides outlining a “plan B” for Italy’s exit from the euro, co-authored by Savona in 2015 with a dozen others, circulated on social media.

On Monday, Mattarelli is set to meet with Carlo Cottarelli over whether he will be willing to take the post, likely to be offered him by Matarelli.

Insodoing, Mattarelli will be installing someone to fill the slot without the backing of the Italian people or that of the Parliament, to serve as a technocrat during the interim space until elections can be held in autumn.

Cottarelli, as an occasional television analyst, has harshly criticized the policies represented by M5S and Lega’s coalition, indicative that his role will be to construct obstacles in the implementation of their agenda, should they eventually accommodate the Italian government.

Not the least is the fact that he represents precisely what the coalition stands united against.

AFP reports:

Carlo Cottarelli, a former International Monetary Fund director, will face an uphill battle should, as expected, he is tasked with forming a technocrat government for Italy in the midst of a deep political crisis and populist rage at the financial “elite”.

Cottarelli, 64, will meet with President Sergio Mattarella after talks between the head of state and populist parties on the cusp of forming a new government fell apart over the inclusion of eurosceptic Paolo Savona as economy minister.

Cottarelli’s likely appointment as prime minister has already attracted the wrath of the anti-establishment Five Star Movement and nationalist League, which have denounced a “premeditated” strike from Mattarella and European “lobbies” against their proposed coalition government.

The chances of the economist gaining approval for any technocrat government are slim, as Five Star and the League boil with anger at their own coalition stumbling on the home straight.

League leader Matteo Salvini said that Cottarella was a “Mister Nobody” who “represents financial institutions”, while the head of Five Star Luigi Di Maio laughed off his chances of ever gaining the endorsement of a parliament in which his and Salvini’s parties command a majority.

“They’ve replaced a government with a majority with one that won’t obtain one,” said Di Maio to supporters at a rally near Rome.

Cottarelli first joined the IMF in 1988, following six years in the Bank of Italy’s Monetary and Financial Sector Division.

He was director of the IMF’s fiscal affairs department from 2008 to 2013 and became known as “Mr Scissors” for making cuts to public spending in Italy while charged with the revision of public spending by Enrico Letta’s short-lived centre-left government.

Looking back on his time under Letta, Cottarelli lamented the resistance of bureaucrats in Rome to help him carry out his role, claiming that “often I wasn’t even given the documents I asked for”.

In 2014 Letta’s successor, Matteo Renzi, nominated him as the IMF’s executive director for Italy, Greece and Malta before leaving the institution in October 2017.

Since then Cottarelli has worked as director of the Public Accounts Observatory at the Catholic University of Milan, and as a TV pundit he has offered a string of warnings about the economic cost of the Five Star and League’s joint government programme, which includes huge tax cuts and a ramping up of welfare spending.

Mattarella is treating this situation as if the fate of Italy’s participation in the Euro is at stake. He sees the situation in Italy from the top down, rather than the way the Italian people view it: from a bottom up.

At the ground level, Italy’s economy is fundamentally malfunctioning, and Cottarelli sees the situation from the perspective of Italy’s creditors.

The people and the government, at this moment, do not perceive a common ground. Political gains are to be made, governmental stakes are to be uprooted, and relationships shaken up. The outcome of Monday’s meeting will further show how this situation will pan out.