Moderate leaders try to protect Italy - from their own government

Italy’s prime minister and economy minister have formed an unofficial alliance with the president to prevent the euro zone’s third-largest economy being dragged into financial crisis by its ruling parties, sources say.

Prime Minister Giuseppe Conte and Economy Minister Giovanni Tria, both technocrat appointees, have held private conversations with President Sergio Mattarella in recent days on ways of shielding Italy from a gathering political and financial storm, according to two Italian officials with knowledge of the matter.

Conte and Tria are acting with Mattarella, who has a role in ensuring political stability, to effectively curb the behavior of their own government — a populist coalition whose party leaders are railing against EU budget rules.

The coalition’s confrontation with the European Commission, which has flagged possible disciplinary action over Rome’s big-spending fiscal policies, has sent a shiver through Italian bonds and rekindled fears of a full-blown financial crisis.

“Mattarella is trying to keep the boat afloat,” said one senior government official.

Though the coalition’s dominant political force is League leader Matteo Salvini, the prime minister is in charge of negotiating with Brussels over budget policy, and both he and Tria could do serious damage to the government if they were to wield the ultimate political weapon.

Both Salvini and his coalition partner Luigi Di Maio, leader of the 5-Star party, know that the resignations of two men seen by markets as Italy’s main guarantee of fiscal prudence would be likely to send the value of its debt tumbling, and neither wants to risk this.