Italy PM to get backing for deficit hike after surviving coalition ambush

Italian Prime Minister Giuseppe Conte is set to get broad parliamentary backing for 32 billion euros of extra spending for the COVID-hit economy, lawmakers said, after he narrowly survived this week's attempt by a junior coalition partner to unseat him. The stimulus package approved by the cabinet last week, due to be voted on in both houses of parliament late on Wednesday, will win support from across the political spectrum, government and opposition party sources said.

Italian Prime Minister Giuseppe Conte is set to get broad parliamentary backing for 32 billion euros of extra spending for the COVID-hit economy, lawmakers said, after he narrowly survived this week's attempt by a junior coalition partner to unseat him.

The stimulus package approved by the cabinet last week, due to be voted on in both houses of parliament late on Wednesday, will win support from across the political spectrum, government and opposition party sources said. The money will be used to help the hard-pressed national health service, fund grants to businesses forced to close due to coronavirus lockdowns, finance company furlough schemes and provide cover for a postponement of tax payment deadlines.

It will push the budget deficit to 8.8% of gross domestic product this year, Economy Minister Roberto Gualtieri said on Wednesday, up from the current official goal of 7% and only marginally below the 10.5-10.8% seen for 2020. The latest package means Italy will have approved almost 200 billion euros ($242 billion) in a series of stimulus measures since the COVID pandemic hit the country last February.

In the Senate on Tuesday Conte won his second vote of confidence in two days, allowing him to continue in office after former premier Matteo Renzi withdrew his small Italia Viva party from the coalition, attempting to deprive it of a majority. Conte won over several opposition and unaligned senators but fell short of an absolute majority, making it hard for him to adopt any contentious legislation in future and leaving him vulnerable to parliamentary ambushes.

Dismissing calls from right-wing League leader Matteo Salvini for him to resign, Conte said after the vote he would now aim "to make the majority even more solid," by luring other opposition lawmakers into the government's ranks. He is expected to consult on Wednesday with President Sergio Mattarella, the supreme arbiter of Italian politics, to update him on his plans.

($1 = 0.8267 euros) (Writing by Gavin Jones; Editing by Toby Chopra)

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