Italy's Conte looks for outside backing after coalition partner quits government

Prime minister to face confidence votes in Parliament

The government of Italian Prime Minister Giuseppe Conte is under threat after a coalition partner pulled support. Reuters.

Italian Prime Minister Giuseppe Conte resisted calls to resign on Thursday after a junior coalition party pulled out of his government, stripping him of a parliamentary majority in the middle of the Covid-19 pandemic.

Mr Conte indicated he wanted to take his fight for survival to Parliament, with his main coalition partners backing plans to look for responsible legislators from opposition ranks to prop up the administration.

On Monday he will address the Chamber of Deputies on the crisis and what is sure to be a fiery debate will be followed by a vote of confidence, which should provide an indication of whether he can battle on.

If Mr Conte survives that vote, an even tougher one will come the following day in the Senate, where cobbling together a majority appears more difficult.

Matteo Renzi, leader of the Italy Alive party, arriving for a new conference. Bloomberg.

"Government majorities are put together in Parliament, openly, in the light of day and without shame. This is what we will do now," said Dario Franceschini, the Culture Minister and a leading figure in the co-ruling Democratic Party (PD).

Former premier Matteo Renzi plunged the country into political chaos on Wednesday when he withdrew his two ministers from the Cabinet, after a long list of grievances over how Mr Conte had handled the health emergency and the economy.

Mr Renzi left open the door to a return as long as a new policy agreement could be worked out, but his one-time partners said they wanted nothing more to do with him.

"We cannot return to the negotiating table with him," said Vito Crimi, head of the co-ruling Five-Star Movement.

The political ructions pushed the gap between Italian and German government bond yields to its widest in more than a month on Thursday, while borrowing costs rose slightly from recent record lows at an auction.

"Opening a government crisis was an unprecedented act of irresponsibility," economy minister Roberto Gualtieri told state broadcaster RAI, voicing widespread anger in the PD over Mr Renzi's manoeuvring.

Analysts said markets would become much more volatile if investors thought the crisis would lead to an early election, which polls indicate would probably be won by the opposition centre-right bloc led by Matteo Salvini's eurosceptic League.

Mr Salvini on Thursday called for a vote and shrugged off concerns about campaigning during the coronavirus epidemic, which has killed more than 80,000 people in Italy and plunged the country into its worst recession since the Second World War.

One of Mr Renzi's main complaints about Mr Conte is the way he handled plans to spend more than €200 billion ($243bn) in promised EU funds, accusing him of trying to bypass Parliament in the decision-making process.

He said Mr Conte must accept up to €36bn offered for the health system by a separate eurozone bailout fund.

No country has tapped this fund amid fears that the cash would come with unwelcome conditions.

For Mr Conte to stay in office, he would need to find about 25 members in the 630-seat lower house and up to 18 in the 315-seat Senate.

But such a majority would be fragile, making prolonged political stability hard to achieve.

If Mr Conte cannot find a way to stay in office, President Sergio Mattarella might try to put together a broad-based government of national unity to overcome the impasse, which worries many Italians.

"We are worried because politics never work in Italy," said Benito Gaetano, a resident of the southern city of Lamezia Terme.

"I don't know why ... it just takes some common sense, especially at a time like this."