Italian coalition leaders keep sniping even after PM ultimatum

By Crispian Balmer

ROME (Reuters) - Italy's coalition leaders professed loyalty to the government on Tuesday after Prime Minister Giuseppe Conte threatened to quit if they did not stop feuding, but the two ruling parties kept up their mutual recriminations.

Conte told reporters on Monday he would resign unless the right-wing League and anti-establishment 5-Star Movement did not put aside their many differences and resume work on enacting an agreed policy program.

Both League leader Matteo Salvini and his 5-Star counterpart Luigi Di Maio said on Tuesday they wanted to continue working together. However, underscoring the deep-seat rancor, a 5-Star minister accused the League of plotting to collapse the year-old government, while Salvini set an ultimatum of his own.

“If I realize after a couple of weeks that we are still saying the same things, with the same delays and the same postponements, then we would have a problem,” Salvini, who serves as deputy prime minister, told RTL radio.

Relations between the two coalition parties deteriorated dramatically in the build-up to last month's EU parliamentary election, which saw the League become Italy's most popular party while the 5-Star lost half its support in barely a year.

Since the vote, Salvini has been behaving as the defacto prime minister, promising major tax cuts and demanding changes to European Union budget rules that impose limits on the amount of debt and deficits governments can run up.

In particularly pointed comments, Conte said on Monday Italy would have to respect EU fiscal rules until it managed to change them, effectively telling Salvini that Rome could not afford the sort of spending splurge he has promised voters.

FISCAL BATTLE

The European Commission is likely to begin disciplinary procedures against Italy on Wednesday over the country's failure to reduce public debt and it was not immediately clear if Salvini was ready to fall into line.

Speaking to supporters on Monday evening, Salvini said the EU vote had shown that Italians wanted to break with EU rules.

Besides the looming fiscal battle, the government faces an array of other internal policy disputes, including a League drive to give greater autonomy to northern regions and a push to rewrite rigid building norms to kick-start the waning economy.

League politicians have said the current code, which is hugely complex in an effort to shut out mafia businesses, should be suspended for two years.

Transport Minister Danilo Toninelli, who is a member of 5-Star, denounced the proposal as “stupid”.

“It makes one think ... that this is a pretext to create chaos and bring down the government,” he told Radio 24.

If Conte cannot restore order, President Sergio Mattarella would probably order new elections four years early, which would almost certainly be held in September - the first time a national ballot has been staged in the autumn.