© BloombergGiuseppe Conte, Italy's outgoing prime minister, left, hands a bell to Mario Draghi, Italy's incoming prime minister, during a handover ceremony at Chigi Palace in Rome, Italy, on Saturday, Feb. 13, 2021. Italys Mario Draghi unveiled his long-awaited government that includes Bank of Italys Daniele Franco as finance minister and taps a state-owned defense company executive for a green job.
While the split would most likely leave Draghi with a majority in both chambers of the Italian legislature, it would make it more difficult for him to push through his plans for fixing up the economy and to turn down requests from other coalition partners. Conte's Five Star Movement would continue supporting the government's decisions on an ad hoc basis, said the people, who asked not to be named discussing confidential deliberations.
Five Star came first in Italy's 2018 elections but has since fallen dramatically in the polls and has been riven by internal divisions over Draghi's staunch support for the government in Kyiv. While Draghi on Tuesday vowed to continue providing aid and defended the European Union's sanctions regime, 57-year-old Conte has called on the government to focus on reviving peace talks and halt weapons deliveries.
A spokesperson for Conte did not respond to a request for comment.
With an election due next year, Conte is looking to differentiate himself from his political rivals still inside Draghi's coalition and to exploit the opposition to military aid among voters. That position though has also divided the Five Star itself, with Foreign Minister Luigi Di Maio, a former leader, expected to leave the party as soon as Tuesday evening in order to maintain his support for Draghi and to keep his position in the government.
Di Maio is likely to retain Draghi's support even if he does set up a new party.
As many as a quarter of Five Star's lawmakers have indicated that they will join Di Maio's new group and remain inside the governing coalition, the people said. Conte won't take a final decision on whether to abandon Draghi until he sees how many lawmakers remain loyal to him, they added.
While Conte is the head of Five Star, he's not a government minister or a lawmaker and his initiative could yet stay his hand if other party officials decide that it is more important to support the stability of the government.
If Conte does strike out on his own, it would also raise the pressure on Matteo Salvini, the head of the right-wing League, who has also frequently criticized Draghi's line on everything from Ukraine to the economy. According to Italian media, Salvini has toyed with the idea of quitting the coalition in an effort to revive his dwindling support in opinion polls.
The spread between Italy's 10-year yields and their German equivalents narrowed to 192 basis points on Tuesday, the lowest in five weeks, after exceeding 240 basis points earlier this month after the European Central Bank announced it will start to raise interest rates next month.
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