Italy’s Conte promises populist agenda, urges strong Europe

Bloomberg

Italian Prime Minister Giuseppe Conte pledged in his maiden speech that his government will push through populist measures ranging from a “citizen’s income” for the poor to tax cuts and curbs on immigration, as he called for a stronger, fairer Europe “to prevent its decline.”
Speaking in the Senate before a confidence vote, the 53-year-old lawyer with no political experience promised “a new wind of change” based on a program of fiscal expansion, which challenges European Union budget rules and which was drawn up by the euroskeptic Five Star Movement and League.
“Eliminating the difference in the economic growth between Italy and the European Union is one of our objectives, which must be pursued within a framework of financial stability and market trust,” said Conte, flanked by Five Star leader Luigi Di Maio and League chief Matteo Salvini. Conte was confident about his government’s “negotiating power,” because Italy’s interests match Europe’s.
Conte’s speech, his first attempt to navigate between the two party leaders’ contrasting demands, will be followed by a vote of confidence in the Senate Tuesday evening, with the lower house expected to hold its ballot on Wednesday. Conte is expected to win both votes, despite holding only a narrow majority in the Senate.
Italian bonds extended their decline during Conte’s speech as he gave investors little indication that he would diverge from the Five Star-League
programme. Two-year securities led losses, with yields climbing by 16 basis points to 0.92 percent. Those on ten-year notes snapped four days of declines.
The whole spending and tax programme by the two parties will cost as much as 126 billion euros in its first full year, according to Carlo Cottarelli, a former International Monetary Fund executive who nearly became premier himself.
Defending populism as “the ruling class listening to the people,” Conte promised the citizen’s income for the poor and the jobless, a two-tiered flat tax, and a boost in health spending — while also promising to reduce the public debt “by making our wealth grow, not through austerity measures.”
Conte also vowed “revolutionary measures” to overhaul the tax system, to review bankruptcy laws, crack down on big companies “hiding their wealth in artificial havens” and cut the perks of politicians.
The novice premier sought to reassure Italy’s EU partners. “Europe is our home, the home of everyone. We must push for a stronger and fairer Europe.”
With Salvini of the anti-immigrant League nodding in agreement at his side, Conte accused EU partners of “selfishly unloading on Italy” the task of dealing with immigrants from across the Mediterranean “which should have been shared.” Conte said that recent comments by German Chancellor Angela Merkel show that leaders “are realising that Italy cannot be left on its own in the face of such challenges.”
Conte advocated an opening to Russia: “We will promote a review of the sanctions system, starting with those that threaten to penalise Russian civil society.”