MNI: Draghi Said To Offer Concessions To Keep 5-Stars In Gov't

Italian Prime Minister Mario Draghi is likely to offer the Five-Stars Movement concessions on welfare payments and tax credits for home improvements in a bid to keep the populists from leaving his coalition and potentially forcing early elections, sources with knowledge of the matter told MNI.

Draghi, who said he will step down if Five-Stars leaves the coalition, was likely to promise concessions on measures included in a EUR23 billion aid package for households and companies that must be approved by parliament before July 16 in a meeting with the party’s leader Guiseppe Conte on Wednesday, sources said.

Conte’s allies have briefed that he is trying to persuade his party to remain in a government which they say has ignored its policy proposals despite its being the largest force in the legislature until last month, when about a fifth of its members left to form a new centrist grouping. Exiting the coalition would allow Five-Stars to criticise Draghi and boost its profile before general elections which must be held by next spring, but sources said parliamentarians gave Conte their backing to secure concessions and a promise of more influence on policy in future from the prime minister at a meeting earlier on Wednesday. (See MNI: Five-Star Split Augurs Difficult H2 For Draghi-Officials)

Sources in the administration and in other coalition parties nonetheless said they expected Five-Stars to eventually find an excuse to walk away, and Draghi raised the stakes last week when he said that he would not lead a government without the populist force, raising the possibility of early elections.

The meeting between Draghi and Conte comes after a vote on the aid package in the Chamber of Deputies scheduled for Monday was delayed as Five-Stars objected to measures which would alter the “citizens’ income” paid to households below the poverty line and to the Superbonus scheme providing tax credits of up to 110% on the cost of home improvements.

DISQUIET WITHIN OTHER PARTIES

In the past, Draghi has used confidence votes to force through legislation, but Conte has warned the prime minister that if he employs that tactic this time Five-Stars could vote against him.

While former European Central Bank chief Draghi is prepared to cede ground on the citizens income and the Superbonus, doing so may complicate relations with other parties in his coalition, including the centre-left Democrats.

There is also disquiet within the right-wing League, now the biggest party in parliament following the Five-Stars split, and which has similarly often found its proposals for legislation overruled by means of confidence votes. A faction within the League, worried about its gradual decline in opinion polls, favours leaving the government, and its leader Matteo Salvini has threatened to do so if Draghi allows parliament to pass liberal measures on immigration and cannabis favoured by Five-Stars and the Democrats.

But sources told MNI the League is likely to stay where it is, for fear of triggering early elections, particularly if Five-Stars leaves the coalition. Some officials in the hard-right party also argue that it has achieved some of its goals, particularly with regards to tax reform.