Tension in Italy’s governing coalition over taxation and public spending

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Publication Date June 2019
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On 5 June 2019 Italy's Prime Minister Guiseppe Conte said he was ready to resign if rifts within the governing coalition, consisting of the League and the 5-Star-Movement (M5S) were not solved. He also asked the two parties to make a clear decision on the way forward. The coalition leaders, Matteo Salvini (the League) and Luigi Di Maio (M5S),  professed loyalty to the government the following day.

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The League and M5S formed a coalition government in June 2018 that turned sour, over disagreements on a range of issues, especially on the question how to address the escalating public spending crisis. League pushed for a flat tax, while the M5S focused on an introduction of a 9€ minimum hourly salary.

The split intensified after the League managed to double its vote in the European parliamentary election in May (34%) compared to its results in the general election in 2018 (17%). After the balance of power between both parties turned around, critics speculated that the League might attempt an early election. Salvini, Deputy Premier and Interior Minister, had been also criticised for acting as if he was already head of government.

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Commentary and Analysis
VOXeurop, 26/04/2019: Will the Lega and 5 Star alliance survive the European elections? https://voxeurop.eu/en/2019/european-elections-5122891
Euro|Topics, 05/06/2019: Italy's divided coalition: Conte threatens to resign https://www.eurotopics.net/en/221126/italy-s-divided-coalition-conte-threatens-to-resign
LSE: EUROPP Blog, 27/06/2019: Outlook for Italy: Fiscal policy and instability in the government remain key sources of risk https://blogs.lse.ac.uk/europpblog/2019/06/27/outlook-for-italy-fiscal-policy-and-instability-in-the-government-remain-key-sources-of-risk/

CNBC News, 09/05/2019: ‘There is a rift’: Italy’s leaders aren’t even hiding their disagreements anymore https://www.cnbc.com/2019/05/09/there-is-a-rift-italys-leaders-arent-even-hiding-their-disagreements-anymore.html
Politico, 13/05/2016: Italy’s incurable economy https://www.politico.eu/article/italy-incurable-economy/
EurActiv, 24/05/2019: #EU2019 – Italy: Testing the balance of power within ruling coalition https://www.euractiv.com/section/politics/news/eu2019-italy-testing-the-balance-of-power-within-ruling-coalition/
Bloomberg, 30/05/2019: Salvini Ready to End Coalition Unless Five Star Plays Ball https://www.bloomberg.com/news/articles/2019-05-30/salvini-ready-to-end-italy-coalition-unless-five-star-plays-ball
France24, 31/05/2019: Rocky road ahead as Italy's populists mark one year https://www.france24.com/en/20190531-rocky-road-ahead-italys-populists-mark-one-year
RFI, 01/06/2019: 'Stubborn' Salvini challenges Brussels over Italy budget http://en.rfi.fr/contenu/20190601-stubborn-salvini-challenges-brussels-over-italy-budget
The Local (Italy), 01/06/2019: Salvini vows not to yield to Brussels in Italy budget dispute https://www.thelocal.it/20190601/salvini-vows-not-to-yield-to-brussels-in-italy-budget-dispute
Reuters, 02/06/2019: Italy says it won't seek fight with EU, amid talk of government crisis https://uk.reuters.com/article/idUKKCN1T30GW
EurActiv, 03/06/2019: Five Star Movement and Lega clash over cruise ship crash https://www.euractiv.com/section/politics/news/five-star-movement-and-lega-clash-over-cruise-ship-crash/
Politico, 03/06/2019: Italian PM Conte threatens to resign over government infighting https://www.politico.eu/article/italian-prime-minister-giuseppe-conte-threatens-to-resign-over-government-infighting/
Deutsche Welle, 03/06/2019: Italy: Conte threatens to quit unless government solves spat https://p.dw.com/p/3Jlru
The Local Italy, 04/06/2019: Italian PM threatens to quit unless coalition stops bickering https://www.thelocal.it/20190604/italian-pm-threatens-to-resign-unless-coalition-stops-squabbling
Euronews, 04/06/2019: Italy PM threatens to quit, tells warring coalition to end feud https://www.euronews.com/2019/06/03/italy-pm-threatens-to-quit-tells-warring-coalition-to-end-feud
The Irish Times, 04/06/2019: Italian coalition leaders keep sniping after MP's ultimatum https://www.irishtimes.com/news/world/europe/italian-coalition-leaders-keep-sniping-after-pm-s-ultimatum-1.3914339
Reuters, 04/06/2019: Italy's Di Maio says confident of League deal over building code https://uk.reuters.com/article/uk-italy-politics-di-maio-code/italys-di-maio-says-confident-of-league-deal-over-building-code-idUKKCN1T516L
CNBC, 04/06/2019: Italy faces ‘momentous moment’ amid political fights, threats and instability https://www.cnbc.com/2019/06/04/italy-in-crisis-amid-political-fights-threats-and-instability.html
Deutsche Welle, 05/06/2019: EU hits Italy with start of disciplinary action over budget violations https://p.dw.com/p/3JrZ2
Reuters, 05/06/2019: Italy deputy PMs discussed option to exceed 3% budget deficit - paper https://uk.reuters.com/article/uk-italy-politics-budget/italy-deputy-pms-discussed-option-to-exceed-3-budget-deficit-paper-idUKKCN1T60HG

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