Italian Bonds Slide As Conte Said To Consider New Elections

Italian bonds dropped on Friday, continuing their Thursday selloff after Corriere della Sera reported that Italian Prime Minister Giuseppe Conte could seek new elections, as he is increasingly tempted by early voting due to the current state of polls.

According to Bloomberg, Conte, who lost a key ally in parliament last week, is having a tougher-than-expected time rebuilding his majority, and his camp is trying to win over lawmakers by using the threat of snap elections, even though this is widely considered an unlikely option, according to officials who asked not to be named discussing confidential talks.

The 56-year-old Conte, who has no party of his own and was plucked from obscurity to become premier in 2018, does see elections as a possibility, buoyed by opinion polls that suggest he could win 15% or more of the vote, Bloomberg reported citing according to an official familiar with his thinking. But Conte’s allies within the coalition are saying privately they’ll refuse to follow him down that path, and if he persists he could end up returning to his past career as a professor of law, the official said.

Coalition members also fear that a vote would usher in the center-right opposition led by Matteo Salvini, and in any new vote many would lose their seats since the parliament has been downsized following reforms, lawmakers said, asking not to be named discussing confidential deliberations.

Conte, who won confidence votes in both houses of parliament earlier this week but fell short of an outright majority in the Senate, is targeting senators from Silvio Berlusconi’s Forza Italia, centrists, unaffiliated lawmakers and even members of Matteo Renzi’s Italy Alive party, which ditched the coalition last week.

Officials in the two main coalition forces, the Five Star Movement and the center-left Democratic Party, are seeking to persuade lawmakers that refusing to back Conte now would lead to early elections. But senators being targeted by the Conte camp have yet to publicly announce their support, amid reports of haggling over favors including government jobs.

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