Leaked recording exposes Italian government's bitter budget row

Divisions over how to fund a slate of ambitious campaign promises are stoking tensions within Italy’s ruling populist coalition as it prepares to reveal its first budget next week.

Political drama unfolded throughout the weekend as the far-right anti-immigration League party and anti-establishment 5 Star Movement battled over budget priorities in advance of next Friday’s deadline for publishing deficit and debt targets.

Interior Minister and League leader Matteo Salvini met Friday with former three-time prime minister Silvio Berlusconi, who publicly predicted the populist coalition’s days were numbered.

But Mr. Salvini swiftly contradicted his centre-right rival on Saturday, pledging the government would last while appearing at far-right event in Rome, where former Donald Trump adviser Steve Bannon offered future help in the form of US-style war rooms and polling data.

On Sunday, a leaked audio clip went viral of the 5 Star Movement and prime ministerial spokesman threatening a "mega-vendetta" purge of Treasury officials if they didn’t find 10 billion euro to fund key budget priorities.

 “If, in the end, they tell us “ah, we couldn’t find the money’ then we’ll spend all of 2019 getting rid of all these pieces of s*** in the ministry of finance,” said PM and 5 Star Spokesman Rocco Casalino, referring to top finance ministry civil servants. 

“A mega-vendetta is ready,” he said, warning the knives would come out.

First posted on La Repubblica’s website, the audio clip quickly went viral, sparking resignation calls.

But prime minister Giuseppe Conte and 5 Star leaders defended Mr Casalino, expressing regret for the tone but not the content of his remarks. 

The 2019 budget must be a courageous, expansive one, Mr. Salvini said Sunday in an interview published in the Corriere della Sera: “If Italy wants to grow, it has to invest.”

Economy Minister Giovanni Tria, an economics professor who doesn’t belong to either ruling party, has given reassurances that Italy’s budget will be closely aligned with EU targets.

At 132 per cent of gross domestic product (GDP), Italy’s public debt is second highest in the EU, just after Greece.

But behind the scenes, 5 Star Movement leaders complain that finance ministry officials are “rowing against us” by identifying resources for Mr Salvini’s immigration decree, pension reforms and tax cuts, but not for the basic universal income of 780 euros a month that is 5 Star Movement’s central promise. 

The government must also pass a decree to improve infrastructure safety and rebuild the Genoa bridge. 

“We are not going to sacrifice the citizens on the altar of debt,” warned 5 Star Movement Labor Minister and Deputy PM Luigi Di Maio.