New Italy government wins confidence vote

New Italy government wins confidence vote

New Italy government wins confidence vote

Unlikely as it seemed at first, the League and the Five Star Movement government, which collectively won the majority in nationwide elections on March 4, moved from signaling their unwillingness to cooperate at all to signing an agreement with a plan of action to tackle various internal and worldwide issues.

The lower Chamber of Deputies, where the two parties hold an even greater majority than in the Senate, is due to hold a similar vote on Wednesday.

In his 72-minute speech, PM Giuseppe Conte said priorities would be to address social hardship through the introduction of a universal income.

Conte, a lawyer with little political and no governmental experience, was nominated by the far-right League leader, Matteo Salvini, and the head of the anti-establishment Five Star Movement (M5S), Luigi di Maio - both of whom are now his deputy prime ministers.

During his speech Conte made no mention of Italy's commitment to remaining in the euro zone, a question that has troubled financial markets, but he addressed the subject head-on in his final remarks at the end of the parliamentary debate.

"If populism means the ruling class listens to the needs of the people". Di Maio and Salvini vetoed each other as prime minister and picked him as a compromise figure.

Both former premier Silvio Berlusconi's Forza Italia party - a campaign ally of the League - and the outgoing centre-left Democratic Party have said they will not vote in favour of the new government. But 5-Star Senator Michele Giarusso defended the choice of "the government a lot of us were waiting for".

In a sign of the risk that the party leaders will upstage Conte, Salvini spoke with Hungarian Prime Minister Viktor Orban on Monday after the government was formed - a phonecall that, many Italian newspapers noted, would normally have been carried out by a new prime minister, not one of his cabinet members. The spread between the yield on Italian and German 10-year bonds widened by 30 basis points, while the FTSE MIB Italian benchmark stock index closed down 1.2 percent.

However, Conte made no reference to one of the costliest of the coalition's pledges: abolishing a 2011 pension reform that raised the retirement age.

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The novice premier sought to reassure Italy's European Union partners. Economists estimate the coalition's policy agenda would add tens of billions of euros to annual spending.

"Some may have hoped for some watering down after the market moves we saw last week", said Jan von Gerich, chief strategist at Nordea Bank AB.

Italy, he said, will reduce its hulking public debt, but "we want to do it by increasing our wealth, not through the austerity measures that in recent years have allowed it to grow".

The debt was "fully sustainable today", and a key to reducing it was economic growth.

He also referred to the coalition's promise to introduce an overhaul of income tax with just two, much lower rates, but he gave no details nor a timetable for implementing policies.

Mr. Conte mostly avoided foreign affairs, other than to talk up the sanctity of Italy's relationship with the United States and North Atlantic Treaty Organisation, before adding: "Mind you!"

Giuseppe Conte also called for an "obligatory" redistribution of asylum seekers around the EU. "We want procedures that determine refugee status to be certain and speedy, in order to effectively guarantee their (refugee) rights", he said.

The 53-year-old PM voiced his support for the new Interior Minister Matteo Salvini's pro-Russia stance, and he promised that Italy will take steps to lift the sanctions against Russian Federation.

Once the parliamentary votes are over, Conte will leave for his first worldwide summit, a G7 meeting in Canada that starts on Friday.

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