Austerity or growth?

Italian Party Leaders Face Tight Deadline to Form a Government

from The Wall Street Journal,

President gives leaders five days to reach a coalition agreement.

Italy’s president gave party leaders five days to form a new government and avoid early elections that could deepen the uncertainty in one of Europe’s largest economies. Leaders of the antiestablishment 5 Star Movement, part of the coalition that collapsed this week, met with counterparts from the center-left Democratic Party on Friday. While the two sides share some political goals, they have been antagonists for years and previously pledged never to align with each other. Italy was plunged into uncertainty earlier this month when Matteo Salvini, the head of the nationalist League that was in the coalition with 5 Star, pulled his support for the government and called for snap elections, seeking to cash in on strong polling numbers. That forced Prime Minister Giuseppe Conte to tender his resignation on Tuesday, almost four years before the end of Parliament’s five-year mandate. Mr. Salvini’s virulent attacks on the European Union, particularly his hard line on immigration and his call for fiscal stimulus despite Italy’s stretched finances, have put the bloc on notice that it will face a large hostile member if the League wins the next election.

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