Italy's Conte gets help from new Senate group in bid to keep power

Italian PM Conte attends the ceremony marking the rotation of the Carabinieri General Commander, in Rome
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By Crispian Balmer and Angelo Amante

ROME (Reuters) - Italian Prime Minister Giuseppe Conte worked the phones on Friday, trying to secure enough votes in parliament to allow him to stay in power after a junior ally quit the cabinet this week.

There was growing confidence within the coalition that the government could stay afloat as a new, pro-government group formed in the Senate and the head of the country's influential bishops' association appealed for stability.

Conte is due to address the lower house on Monday and the upper house Senate on Tuesday about the political chaos which was triggered by former premier Matteo Renzi in a row over the coalition's handling of the coronavirus and economic crises.

Confidence votes will be held in both chambers. But while Conte should be able to muster a majority in the lower house, the situation in the Senate is much tighter, with the government on paper needing to find 11 lawmakers willing to join its ranks.

Conte and his team were looking for backing among the list of 21 non-aligned senators and hoping that some of Renzi's own 18-strong Senate team might defect and remain within the ruling coalition, which has been in office just 17 months.

"We have signs of willingness and interest from many parliamentarians," Andrea Orlando, the deputy head of the co-ruling Democratic Party (PD), told Sky Italia TV.

A group of four unaffiliated senators representing Italians abroad said they would back Conte to the end of the legislature and appealed for others to join them "to build a future of regeneration and resilience in the interests of the country."

"The prime minister is our point of reference," Ricardo Antonio Merlo, the Italo-Argentinian senator who leads the group, told Reuters.

The head of Italy's national association of bishops, Gualtiero Bassetti, said Italy needed "constructors", the term the parliamentarians committed to propping up the government use to describe themselves.

However, even if Conte scrapes together enough votes in the 321-seat Senate, his government's future will initially look fragile and prone to instability.

Renzi, who has come under attack on social media for pulling the Italia Viva party from the cabinet, said he did not believe Conte would survive.

While the prime minister was searching for stray senators, the opposition centre-right block was also seeking to win over waiverers to try to force his resignation, potentially opening the way for early elections, two years ahead of schedule.

Opinion polls say the opposition, led by League leader Matteo Salvini, would probably triumph in a national vote.

The political uncertainty has pushed up borrowing costs, with yields on Italy's sovereign bonds (BTPs) set to post their biggest weekly rise in 12 weeks.

Analysts said markets would become much more volatile if snap elections looked likely, amid investor concern over the economic policies of any government headed by the eurosceptic, populist League.

"We see new elections as the worst possible outcome for BTPs, but this is highly unlikely, in our view," Societe Generale analysts Jorge Garayo, Ninon Bachet and Adam Kurpiel told clients.

(Additional reporting by Valentina Consiglio and Gavin Jones; Editing by Timothy Heritage and)