Renzi or bust? Italian parties' options narrow in government crisis

FILE PHOTO: Italia Viva's leader and former Italian Prime Minister Matteo Renzi holds a news conference in Rome, Italy, January 13, 2021. Alberto Pizzoli/Pool via REUTERS

ROME (Reuters) - Italy's ruling parties are reluctantly coming to terms with the prospect of having to forge a new deal with the centrist Italia Viva party which quit the government and forced this week's resignation of Prime Minister Giuseppe Conte, political sources said on Wednesday.

The government crisis could hardly come at a worse time, with Italy in its steepest recession since the end of World War Two and having registered 86,000 deaths from COVID-19.

Conte, a lawyer with no direct political affiliation, still hopes to pull together a new administration to manage some 200 billion euros ($240 billion) that Italy expects from a European Union fund to help relaunch its COVID-battered economy.

Yet as the political crisis deepens, lawmakers from the main planks of the coalition, the 5-Star Movement and the Democratic Party, are pushing Conte towards negotiating again with Italia Viva's leader and former premier Matteo Renzi, despite the bitter recriminations amid his walk-out last week.

"I have spoken to Italia Viva members and we can work together. Since Conte doesn't have enough support we should talk to them," a 5-Star lawmaker who asked not to be named told Reuters.

Conte, now a caretaker prime minister after handing in his resignation to the head of state on Tuesday, has got little response to his impassioned call for unaligned lawmakers to fill the hole left by Renzi and his party.

He needs around 10 in the upper house Senate where his coalition is most fragile, but his hopes that waverers would join the government's ranks to avoid the risk of new elections are dwindling by the day.

"Not many people are up for this, not everyone is ready to blatantly contradict his political history to guarantee his future," said Andrea Cangini, a senator from the centre-right Forza Italia party which is often cited as a possible source of support for Conte.

President Sergio Mattarella is unlikely to give Conte a fresh mandate if the premier cannot offer him a guarantee that he now has a stable majority, a senior PD Senate source told Reuters. Patching things up with Renzi looks like the only option, he said.

For its part, Italia Viva says it has no veto against a return of Conte with a new policy platform, but it is playing its cards close to its chest.

"Conte is not the only option. We don't want to discuss names, let's first focus on the policies," said Teresa Bellanova, an Italia Viva senator and former minister.

If Conte does not get enough support, Mattarella may ask another candidate to try to form a government. Dissolving parliament and calling elections two years ahead of schedule would be his last resort.

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(Additional reporting by Giuseppe Fonte, editing by Gavin Jones and Angus MacSwan)

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