In setback for 5-Star, Italy's PM backs completion of rail link with France

By Francesco Guarascio

ROME (Reuters) - Italian Prime Minister Giuseppe Conte said on Tuesday that blocking works on a rail link with France would cost Italy more than completing the infrastructure, taking a stance on an issue that has divided the government coalition for months.

His remarks were seen as a setback for the 5-Star, the largest party in the ruling coalition, which has long opposed the project arguing that Italy should focus on upgrading the existing transport network.

The 5-Star's leader, Luigi di Maio, said in a statement afterward that he planned to oppose the project.

Conte's comments were positive news for the far-right League, which is the junior member of the coalition and has always supported the project. The League's leader, Matteo Salvini, said that the Treno Alta Velocita (TAV) will go ahead and called for works to restart on other projects that are currently stalling.

Conte, who is not a member of either ruling party but is closer to the 5-Star, had in recent months raised doubts about the validity of the venture.

On Tuesday Conte acknowledged his change of heart, saying it was due to new financial offers from Brussels and Paris that had made the completion of the infrastructure less costly for Italy.

"In view of these new fundings, blocking the TAV would cost much more than completing it," Conte said in a statement that was issued before a Friday deadline set by the EU to reschedule the project, after delays mostly caused by infighting within Italy's ruling coalition.

In a video message posted on Facebook, Conte said the European Union would provide more funds than initially foreseen to complete the TAV, which is meant to connect the French city of Lyon with Turin in northern Italy, and includes a 58-km (36-mile) tunnel through the Alps.

He also added that costs for Italy could further drop, after talks with France which is co-funding the infrastructure.

Given that both the European Commission and France have said they want to go ahead with the project, Italy's decision to block it would be unilateral, Conte underlined, adding that only the Italian parliament could take such a responsibility.

Di Maio said parliament and not the government would decide. His party is the largest in parliament although it does not have an absolute majority.

The European Union has offered to increase its funding to cover 55% of the total costs of the project from 40%, Conte said, noting that this would reduce the financial burden for Italian taxpayers.

(Reporting by Francesco Guarascio; Editing by David Evans and Frances Kerry)