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Lega Party Calls on Italian President to Elect New Parliament

28 May 2018

Italy has been plunged back into political turmoil after the president vetoed a eurosceptic finance minister, prompting the two populist parties to call for his impeachment.

"They've replaced a government with a majority with one that won't obtain one", said Five Star leader Luigi Di Maio to supporters at a rally near Rome.

The leader of Italy's far-right League Matteo Salvini on Monday dismissed talk about a possible impeachment of the country's president and said he wanted to change the electoral law with the 5-Star Movement.

The 81-year-old billionaire former prime minister released a statement on Sunday in which he praised Mattarella's efforts to "safeguard this country's families and businesses".

With the prospect of elections possibly looming in a few weeks or months, Salvini might see a boost in what already has been steadily growing popularity, said political analyst Maurizio Molinari, who is La Stampa newspaper's editor-in-chief.

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European equities markets rose on Monday, led by the Milan FTSE MIB stock exchange, which jumped almost 2 per cent as investors backed Carlo Cottarelli, an economist formerly with the International Monetary Fund, to form a technocrat government.

Mr Savona, who served as industry minister during the 1990s, has been an outspoken critic of the European Union and an opponent of austerity programmes.

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A livid Di Maio later called for the president to be impeached.

If it includes Savona, Mattarella is expected to confirm his refusal, which could prompt him to appoint a caretaker government until new elections can be held.

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"Although it would be disrespectful to Italians if this government doesn't get started because it's unpleasant to someone in Berlin or Brussels".

Last week, the spread of points between Italy's bonds and benchmark German bonds grew alarmingly, and Milan's stock market suffered losses as investors were spooked about the intentions of the populists.

The Five Star Movement and the League were the parties that gathered the most momentum from inconclusive March 4 elections, together capturing more than half the vote.

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.

Despite the recent surge, Italian yields are well below the peaks they reached during the euro zone crisis of 2011-2012, thanks mainly to the shield provided by the European Central Bank's bond buying programme. "I will evaluate that request in the coming hours, and I will take an initiative", Mattarella said.

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Lega Party Calls on Italian President to Elect New Parliament