March 5 (Bloomberg) -- Italy’s Five Star Movement will only provide voting support for a new government that it leads, said the populist group’s founder, Beppe Grillo.
Five Star “won’t back a technocratic government” in a vote of confidence, Grillo said today in a post on his website, commenting on possible support for an administration of non-elected figures. “The only solution we propose is a government of the 5 Star,” Vito Crimi, the head of the party’s senators, said in the same post.
After emerging as Italy’s biggest party in last month’s elections, Five Star holds a blocking minority in the upper house of parliament. Democratic Party chief Pier Luigi Bersani, who leads the coalition with the most votes, has a majority in the lower house and has called on Five Star to support him in the Senate.
Grillo’s party may consider staging a confidence-vote walk-out to allow a new government that shares its program to ease the gridlock, two senators-elect said yesterday, declining to be identified because no deal has been made. Crimi told reporters late yesterday that Five Star is not ruling out abstentions.
Italian 10-year bond yields fell 10 basis points to 4.78 percent at 3:13 p.m. in Rome, up 33 basis points from the close on Feb. 22, the last trading day before the election started. Moritz Kraemer, head of sovereign ratings at Standard & Poor’s, said the vote had no implication on Italy’s debt rating and that he will be watching to see what government emerges.
“The dust needs to settle,” Kraemer told reporters today at a conference in London. “The situation is unclear. We are assuming fiscal policy will remain intact. The real challenge for Italy is on the growth side.”
Italy’s economy contracted for six consecutive quarters through the three months ended Dec. 31 as tax increases and tighter bank credit curbed investment and took money out of the hands of consumers. Italians, seeking a reprieve from fiscal austerity, repudiated the budget rigor imposed by Prime Minister Mario Monti with their votes for Grillo and three-time former premier Silvio Berlusconi.
Talks among Italy’s four biggest political groups are ongoing before the new parliament’s first day on March 15. Monti, who finished fourth in the election, said in a statement yesterday that he asked Grillo, Bersani and Berlusconi to separate meetings to discuss European Union policy as the premier prepares for an EU summit next week.
Bersani may get a mandate from President Giorgio Napolitano to explore forming a government, Corriere Della Sera newspaper reported today, without citing anyone. If Bersani fails to secure enough parliamentary support, Napolitano may appoint a caretaker government, Corriere said.
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