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What to expect as Italy’s political crisis unfolds

Italy’s Premier Giuseppe Conte will appear in the Senate on Tuesday to deliver a much anticipated address about the political crisis that has erupted in the middle of the summer break.

The political showdown was triggered two weeks ago by hard-line Interior Minister Matteo Salvini — known across Europe for his tough stance against migrants — when he pulled the plug on the shaky populist coalition forged only 14 months earlier between his right-wing League and the anti-establishment 5-Star Movement.

Salvini wants to capitalize on a surge in support — polls show the League at 38 percent — and push Italy to early elections. But his political gamble may not produce the desired result. There are a number of possible scenarios in which a new government could be formed without Italians heading back to the polls.

WHAT WILL HAPPEN TUESDAY?

Conte in his speech to the Senate is expected to blast Salvini for bringing about the crisis, and after that he may announce his resignation. Even if he doesn’t do that immediately, barring a last-minute patch-up between Salvini and 5-Star leader Luigi Di Maio, the governing coalition Conte was asked to lead no longer exists, so he will eventually have to face a confidence vote and resign.

That puts the ball in the court of President Sergio Mattarella, who will be expected to quickly start consultations with party leaders to explore possible alternative coalitions.

To complicate matters, this is happening just ahead of talks on a difficult budget law that could trigger a new confrontation between Italy and the European Union over deficit targets. The 2020 budget has to line up financial resources worth 23 billion euros to avert a massive VAT hike that risks plunging Italy into a new recession. It needs approval from parliament by year-end, after being submitted to the European Commission in mid-October.

As rival party leaders keep negotiating to isolate Salvini and thwart his bid for power, Mattarella is faced with various scenarios.

THE ODD COUPLE

Earlier this month, the League failed to win support in the Senate for a confidence motion against Conte as the 5-Stars joined forces with the opposition Democratic Party and smaller left-wing groups to freeze it. That move appeared to have caught Salvini off-guard and showed that an alliance between the 5-Stars and the Democratic Party — traditionally bitter rivals — isn’t impossible.

In theory, the two parties could form a new government with the support of the smaller parties that helped them block the no-confidence motion. However, both would face stiff opposition from within their own ranks.

Some leading Democrats, including former Premier Matteo Renzi, say a partnership with the 5-Stars is the only way to save Italy from a Salvini-led government. But others, including current leader Nicola Zingaretti, fear it could seriously damage the party in the next parliamentary elections. Critics also worry that Renzi’s proposal hides a plan to regain power and then found his own political group.

THE URSULA OPTION

Some political analysts have suggested a stronger government could be forged through a grand coalition between the left, the 5-Stars and Forza Italia — the shrinking center-right party led by 82-year-old Silvio Berlusconi.

That scenario is known in Italian political circles as the “Ursula” option, because it would bring together the Italian parties that joined forces to back German politician Ursula von der Leyen to become the next president of the European Commission. Salvini’s party voted against her.

Backers of the “Ursula” scenario include former Commission President Romano Prodi, who has said it would have more long-term potential than a 5-Star and Democratic tie-up.

A CARETAKER GOVERNMENT

If coalition talks fail, Mattarella could still ask the main parties to form a caretaker government. Such a plan would likely include the same forces as a grand coalition, but with a shorter time-span.

A caretaker government — possibly headed by a politically neutral figure or by Conte himself — would be in charge of delivering the new budget. That remains a challenging option for any party, as approving tough economic measures ahead of possible elections may eventually favor the League.

Analysts believe that a caretaker government or a grand coalition would be “market friendly” scenarios, as they would sooth investor worries over a League-dominated budget that would likely spark a new row with Brussels.

NEW ELECTIONS

If no viable alternative to the current government emerges, the president will have no choice but to call new elections, possibly as soon as late October.

That’s the scenario that Salvini wants, because it could make him prime minister. Judging by recent polls, his League could win more than 50 percent of the vote in a right-wing alliance with Forza Italia and the far-right Brothers of Italy.

Salvini has accused his opponents of doing everything possible to avoid new elections in a “desperate” attempt to cling on to their seats in Parliament.


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