Italy on course for new government as parties agree deal

Italy's Five Star Movement and the opposition Democratic Party (PD) said on Wednesday they would try to form a coalition, setting aside years of hostility to avert a snap election and ease economic uncertainty.

Following days of often tense and difficult talks, the leaders of Five Star and the PD told Italy's president that the new government should once again be led by the outgoing prime minister Giuseppe Conte.

The two sides still need to agree on a shared policy platform and team of ministers, but Five Star chief Luigi Di Maio and his PD counterpart Nicola Zingaretti said they had pledged to find common ground for the good of the country.

"We love Italy and we consider it worthwhile to try this experience," Mr Zingaretti told reporters. Speaking shortly afterwards, Mr Di Maio said: "We made commitments to the Italians . . . and come what may we want to fulfil them."

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President Sergio Mattarella summoned Mr Conte for talks on Thursday and was widely expected to hand him a fresh mandate.

The previous coalition made up of Five Star and the far-right League collapsed this month when League leader Matteo Salvini withdrew from the alliance hoping to trigger an early election and cash in on his surging popularity.

But his move backfired when Mr Conte refused to resign immediately, giving Five Star and the PD time to try to overcome their fierce mutual animosity and agree to a government that had previously appeared impossible.

“The only thing that unites them is their hatred of the League,” Mr Salvini said bitterly after meeting President Sergio Mattarella in an effort to convince him to call elections.

“Millions of Italians are being held hostage by a hundred parliamentarians who are looking to cling onto their posts.”

Markets surge

The prospect of a new administration led by Mr Conte, an academic who is considered close to the Five Star, has buoyed markets, which are betting that Italy will get a fiscally prudent government that will avoid confrontation with Europe.

However, a coalition pact is not yet a done deal. The tentative accord could still unravel even as President Sergio Mattarella wraps up his consultations aimed at resolving the political chaos that was unexpectedly unleashed by Mr Salvini.

Five Star and the PD have yet to agree on other top government posts, besides the prime minister’s position, or reveal a common policy platform.

In an added complication, Five Star has said it will put its proposed deal with the PD to an online vote of its members. Many Five Star supporters have taken to social media to denounce any pact with the centre-left and a Yes vote cannot be taken for granted. – Reuters