Italy's Populists Are at Loggerheads on a Whole Bunch of Issues

(Bloomberg) -- You might think the budget battle is the only issue causing tensions between the populist allies in the Italian government. But beyond the financial fight with the European Union, a series of issues are causing friction in the unlikely marriage between Luigi Di Maio of the anti-establishment Five Star Movement and Matteo Salvini of the anti-migration League.

Here's a full rundown of the pressure points.

Spending Priorities

With the EU demanding changes to the 2019 budget and bond yields close to a four-year high, the League is starting to question Five Star's insistence on a “citizen's income” for the poor. Salvini said pointedly on Saturday that it's a benefit for those seeking jobs while one of his senior advisers, Giancarlo Giorgetti, said Sunday that implementing the program will be “complicated.”

Asylum Seekers

Salvini wants new restrictions on the rights of asylum-seekers and has included provisions in a decree on security and immigration that is currently before parliament. Several Five Star senators are campaigning against the measures.

The government may call a vote of confidence on the decree, Prime Minister Giuseppe Conte told reporters on a visit to Algiers Monday. That will raise the stakes for the government in a bid to strong arm the dissenters. No date has yet been set for the vote. The center-right Forza Italia and far-right Brothers of Italy could bail out the government if the Five Star lawmakers refuse to toe the line.

Corruption Crusade

Five Star has made the fight to root out corruption one of its core issues and as part of that push it wants to scrap time limits on how long people can be prosecuted for after an initial trial. The League is resisting. Giulia Bongiorno, the party's minister for public administration, has said the measure would be “an atomic bomb in penal proceedings.”

High-Speed Rail

Di Maio is under pressure from Five Star's base to block plans for a high-speed rail tunnel through the Alps to France. Salvini's pro-business League wants to deliver infrastructure for its business sector supporters in northern Italy. Pulling out could cost Italy 2 billion euros ($2.3 billion), according to the project's administrators -- that's almost as much as it would cost to complete the project.

...And One Reason for Sticking Together

Dumping the coalition would be a risky move for Di Maio. Polls suggest Salvini would be the main winner from a snap election and Di Maio would need to change party rules just to keep his parliamentary career alive. Under Five Star's current regime, members can only serve two terms as elected representatives and the deputy prime minister, like many of his colleagues, is already on his second.

To contact the reporter on this story: John Follain in Rome at jfollain2@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Ben Sills, Richard Bravo

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