Mandatory Credit: Photo by ETTORE FERRARI/EPA-EFE/Shutterstock (10367043cn) Italian Prime Minister Giuseppe Conte looks on after he addressed the Senate in Rome, Italy, 20 August 2019. Conte said that the government has come to an end and that he would resign. Italian Premier Giuseppe Conte addresses the Senate, Rome, Italy - 20 Aug 2019
Italian prime minister Giuseppe Conte accused Matteo Salvini, the leader of the far-right League of 'political opportunism' in his Senate speech © ETTORE FERRARI/EPA-EFE/Shutterstock

After 14 months trying to hold together a dysfunctional coalition between the far-right League and the anti-establishment Five Star movement, Giuseppe Conte has thrown in the towel. “This government ends here,” he told the Senate in Rome, resigning as prime minister of Italy.

Italy now faces months of political uncertainty just when it needs to put together a 2020 budget that complies with EU rules and avoids a potentially crippling rise in VAT (this is due to start in January unless offsetting expenditure savings cannot be found).

The country was plunged into this crisis 12 days ago when Matteo Salvini, the League party leader and deputy prime minister, sensed a chance to capitalise on his skyrocketing popularity and demanded fresh elections. Despite his recent hints, including on Tuesday, that the two coalition partners might be able to patch things up after all, the alliance appears finished. Trust has evaporated. Five Star now describes Mr Salvini as “untrustworthy”.

In a statesmanlike speech to senators, Mr Conte laid into Mr Salvini, accusing him of “political opportunism” and of showing “a serious lack of constitutional culture” by bringing the government to its knees when parliament was on its summer recess. He criticised the far-right leader’s habit of clutching a rosary in speeches and debates. He also brought up allegations that the League had sought illicit party financing from Russia. Sitting on one side of the prime minister, Mr Salvini shook his head and rolled his eyes. On the other side, Luigi Di Maio, the Five Star leader, could barely conceal a smirk.

When he pulled the plug on the coalition earlier this month, while campaigning on Italy’s beaches, Mr Salvini was confident of precipitating early elections and winning them. It has proved to be more complicated. The timetable was not his to control. The idea of a coalition between Five Star and the centre-left Democrats, two parties which hate each other, has gained more traction than expected, raising the possibility that the League could be locked out of power for years.

Mr Salvini had the chance to bring the government down in the wake of the League’s emphatic victory in the European Parliament elections at the end of May, but he dithered. Instead, he made his move when parliament was not sitting, giving his rivals a chance to regroup. He is still riding high but no longer looks a tactical genius. His Senate speech in reply to Mr Conte sounded curiously unprepared.

What happens next depends on Sergio Mattarella, Italy’s president. After consulting with party leaders, he could ask Mr Conte to form another government; he could seek a temporary administration to pass a budget if there is support for such an option in parliament; or he could call snap elections, probably at the end of October.

He may well decide a return to the polls is inevitable. It could take months to work out a viable coalition between Five Star and the Democratic party and the latter is badly split over the idea. Working up a budget would expose those tensions. And such a government would probably prove no more stable than the outgoing administration. Mr Salvini is already portraying the idea as a cynical ploy by the political establishment to keep him out of power.

The League leader pre-empted Tuesday’s Senate proceedings with a promise of a €50bn stimulus package in the 2020 budget, which must be submitted in outline to the European Commission by mid-October and enacted by parliament by the end of the year. If he is serious, this could lead to a disastrous confrontation with the EU given Italy’s mountainous debt pile. It shows what is at stake.

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