Italian government talks show no sign of breaking deadlock

ROME (Reuters) - Italian President Sergio Mattarella faced an uphill task trying to put together a new government on Thursday, with centre-right parties split on their priorities and the centre-left vowing to head into opposition.

National elections last month ended in deadlock as a centre-right bloc, including the League and Silvio Berlusconi’s Forza Italia (Go Italy!), emerged as the largest group, while the anti-system 5-Star Movement was the biggest, single party.

The centre-left Democratic Party (PD), which has governed for the past five years, trailed home in third place, punished by voters for the sluggish economy, growing poverty and a huge jump in migrant arrivals from lawless Libya.

Mattarella is holding two days of consultations to try to break the stalemate, but his advisers have warned that it could take many weeks to find a solution. Party leaders leaving his offices on Thursday made plain the complex mesh of apparently irreconcilable demands that have complicated his task.

League leader Matteo Salvini said he wanted to form a stable government with his centre-right allies, but acknowledged for that to happen they would need to hook up with the 5-Star.

“It doesn’t take a scientist to understand that other solutions would be temporary and improvised,” he said.

However, Berlusconi, Salvini’s main political ally, made clear that he wanted nothing to do with 5-Star, which has itself ruled out any deal with the billionaire businessman, branding him a political failure tainted by years of graft scandals.

“We are not open to government solutions in which envy and social hate, poverty politics and judicial witch hunts are the cornerstone,” Berlusconi said, using the same terms as when he denounced 5-Star during the election campaign.

“Such a government would put our country in grave difficulty in Europe and would ignite a recessive spiral,” he added.

FLEXIBILITY

The battered PD could act as a kingmaker, having the numbers in parliament to bring to life either a centre-right or a 5-Star government. But its leadership ruled out any such role.

“The negative election result does not allow us to formulate government solutions that include us,” the PD’s acting secretary Maurizio Martina said after his meeting with the president.

Financial markets have so far taken the stalemate in their stride, but investors fear a possible tie-up between the League and 5-Star, which are both hostile to EU budget restrictions and demand that Italy be much more assertive in Brussels.

The 5-Star wants to forge a German-style coalition pact with either the League or the PD, and its leader, Luigi Di Maio, is due to see Mattarella later on Thursday.

The League’s Salvini called for greater flexibility and said he would hold talks with other party chiefs next week, adding that without compromises, Italy would have to hold a new election.

“If everyone remains immobile on their issues, on their personal whims ... the government will not be born,” Salvini said, promising to be open-minded in future discussions.

“We’ll do everything to create a government that lasts five years obviously starting with who won the elections,” he said, referring to his centre-right camp, which he has so far refused to ditch in the quest to clinch a government deal.