What Happened: The right-wing League party, one of the members of Italy’s coalition government, issued a press release on Aug. 8 threatening to withdraw from the government. League leader Matteo Salvini is currently meeting with Prime Minister Giuseppe Conte to discuss the future of the Italian government.
Why it Matters: Frictions between the League and the anti-establishment Five Star Movement party have escalated in recent hours, leading to rumors that the League may leave the government or at least demand a Cabinet reshuffle to increase its influence on policy. One of the ministers rumored to be dismissed is Giovanni Tria, who is seen as a moderate technocrat. The League’s withdrawal from the government would not necessarily lead to an early general election, as Italian President Sergio Mattarella is likely to ask the parties in Parliament to appoint a new government before deciding to hold an early election.
Background: The League and the Five Star Movement have governed Italy together since mid-2018. Tensions between them have driven financial market anxiety about Italy’s future, as the country’s debt exceeds 130 percent of its gross domestic product. Markets have also shown concern about some League members' suggestions to introduce a parallel currency and eventually leave the eurozone.
- Europe 2019 Third-Quarter Forecast (June 16, 2019)
- As Expected, EU Elections Result in a Fragmented Parliament (May 28, 2019)
- The Elections for the EU Parliament Promise Further Fragmentation (Feb. 22, 2019)