EU domino effect: Italy crisis set to throw ENTIRE bloc into chaos – stark warning

Brexit: Italy ‘most likely to leave EU next’ says McCrae

The bloc faces an existential crisis if the turmoil is not resolved quickly, with consequences going “beyond” Italy’s borders, a political expert has warned. This week Italian Prime Minister Giuseppe Conte resigned after he lost his parliamentary majority over his government’s plans on how to spend the bloc’s coronavirus pillar legislation, the Recovery Fund.

Italy was awarded the biggest chunk of the funds, but EU legislation means member states must spend the money on substantial reforms and investment proposals, something the founding state is failing to prove so far.

Italy risks setting a bad example of the precious European solidarity if the new administration, expected to still be led by Mr Conte, fails to make a success of the Recovery Fund opportunities.

Speaking to the Financial Times, Valentina Meliciani, director of Luiss University School of European Political Economy, said: “We are in a critical moment.

“Whether a stable government can now be created will define how the EU money is going to be spent.

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“This is a big opportunity for Italy, but the price of failure is enormous and the consequences of that would go beyond our country.”

Italy’s ruling parties are reluctantly coming to terms with the prospect of having to forge a new deal with the centrist Italia Viva party which quit the government and forced Mr Conte’s resignations.

The government crisis could hardly come at a worse time, with Italy in its steepest recession since the end of World War Two and having registered 86,000 deaths from COVID-19.

Mr Conte, a lawyer with no direct political affiliation, still hopes to pull together a new administration to manage some 200 billion euros that Italy expects from the European Union.

Yet as the political crisis deepens, MPs from the main planks of the coalition, the Five-Star Movement and the Democratic Party (PD), are pushing Mr Conte towards negotiating again with Italia Viva’s leader and former premier Matteo Renzi, despite the bitter recriminations amid his walk-out last week.

“I have spoken to Italia Viva members and we can work together. Since Conte doesn’t have enough support we should talk to them,” a Five-Star MP told Reuters.

Mr Conte, now a caretaker prime minister, has got little response to his impassioned call for unaligned MPs to fill the hole left by Renzi and his party.

He needs around 10 in the upper house Senate where his coalition is most fragile, but his hopes that waverers would join the government’s ranks to avoid the risk of new elections are dwindling by the day.

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“Not many people are up for this, not everyone is ready to blatantly contradict his political history to guarantee his future,” said Andrea Cangini, a senator from the centre-right Forza Italia party which is often cited as a possible source of support for Conte.

President Sergio Mattarella is unlikely to give Mr Conte a fresh mandate if the premier cannot offer him a guarantee that he now has a stable majority, a senior PD Senate source told Reuters.

Patching things up with Mr Renzi looks like the only option, he said.

For its part, Italia Viva says it has no veto against a return of Mr Conte with a new policy platform, but it is playing its cards close to its chest.

“Conte is not the only option. We don’t want to discuss names, let’s first focus on the policies,” said Teresa Bellanova, an Italia Viva senator and former minister.

If Mr Conte does not get enough support, Mattarella may ask another candidate to try to form a government.

Dissolving parliament and calling elections two years ahead of schedule would be his last resort.

Right-wing opposition leaders Matteo Salvini and Giorgia Meloni are calling for Italians to return to the polls as soon as possible.

Silvio Berlusconi’s Forza Italia (FI) party would like to see Italy’s political crisis resolved with a broad government of national unity, Vice President Antonio Tajani told reporters on Tuesday.

But he also stressed Berlusconi’s party was not about to leave the centre-right alliance in order to bring this about.

The former European Parliament President said: “The crisis is open.

“We trust the wisdom of the head of state.

“If all the best get together to face the emergency with a serious, stable government of national unity, Forza Italia is in agreement.

“The other way to have a serious government is via the instrument of elections.

“There is no chance of Forza Italia leaving the centre-right”.

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