Italy PM wins backing for deficit hike after surviving coalition ambush


FILE PHOTO: Italian Prime Minister Giuseppe Conte speaks ahead of a confidence vote at the upper house of parliament after former Prime Minister Matteo Renzi pulled his party out of government, throwing the country into political crisis, in Rome, Italy, January 19, 2021. REUTERS/Yara Nardi/Pool

ROME (Reuters) - Italian Prime Minister Giuseppe Conte won near unanimous parliamentary backing for extra spending for the COVID-hit economy on Wednesday, just hours after he narrowly survived an attempt by a junior coalition partner to unseat him.

Laying aside their normal animosity, opposition and coalition parties joined forces to approve the 32-billion-euro ($38.7 billion) stimulus package in both houses of parliament.

The money will be used to help the hard-pressed national health service, fund grants to businesses forced to close due to coronavirus lockdowns, finance company furlough schemes and provide cover for a postponement of tax payment deadlines.

It will push the budget deficit to 8.8% of gross domestic product this year, Economy Minister Roberto Gualtieri said on Wednesday, up from the current official goal of 7% and only marginally below the 10.5-10.8% seen for 2020.

The latest package means Italy will have approved almost 200 billion euros in a series of stimulus measures since the COVID-19 epidemic hit the country last February.

Opposition centre-right parties said they agreed on the need to do more to help the economy survive the health crisis, which has left more than 83,000 dead in Italy, but warned that time was running out.

"We have 100 days to save this country from the pandemic and the risk of bankruptcy," Renato Brunetta, a veteran politician with Forza Italia party, told the lower house of parliament.

In the Senate on Tuesday Conte secured his second vote of confidence in two days, allowing him to continue in office after former premier Matteo Renzi withdrew his small Italia Viva party from the coalition, attempting to deprive it of a majority.

Conte won over several opposition and unaligned senators but fell short of an absolute majority, making it hard for him to adopt any contentious legislation in future and leaving him vulnerable to parliamentary ambushes.

Dismissing calls from right-wing League leader Matteo Salvini for him to resign, Conte said after the vote he would now aim "to make the majority even more solid", by luring other opposition lawmakers into government ranks.

He consulted on Wednesday with President Sergio Mattarella, the supreme arbiter of Italian politics, to update him on his plans. No statements were released after the encounter.

($1 = 0.8263 euros)

(Writing by Gavin Jones; Editing by Toby Chopra and Crispian Balmer)

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