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Italian PM Conte faces challenge from former PM Renzi over economy

Italian PM Conte faces challenge from former PM Renzi over economy
Italian Prime Minister Giuseppe Conte, shown speaking at during a press conference in Rome on October 25, is facing a challenge this week from former Prime Minister Matteo Renzi. Photo by Roberto Mondaldo/EPA-EFE/ANSA

Jan. 5 (UPI) -- Italy's government under Prime Minister Giuseppe Conte is facing a challenge from former prime minister and coalition ally Matteo Renzi this week as the economy is showing cracks under the weight of the coronavirus pandemic.

Renzi has expressed displeasure over Conte's effort to restart the Italian economy and distribution of the coronavirus vaccine. He has even threatened to pull his tiny Italia Viva party out of Conte's governing coalition if his concerns aren't addressed.

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Conte has been working party leaders to get his economic plan passed, on a possible reshuffling in his government while preparing to take on Renzi in Parliament. He is expected to seek support from his ministers on the economic plan Thursday.

Italy is expected to receive $255.2 billion of the $920 billion the European Union is making available to 27 countries to help their economies during the pandemic.

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"The Gordian knot is how to spend EU funds and whether to ascribe them to new or pre-existing projects," Alberto Alemanno, professor of EU law at HEC Paris Business School, told CNBC Tuesday. "While the former would further increase Italian record high public debt, the latter would reduce the positive impact of the EU financial support."

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Renzi was a member of the center-right Democratic Party when it formed a majority government Five Star Movement, which ushered Conti into power. He would later leave to form Italia Viva.

"While Italia Viva is only a junior partner in the ruling coalition, the numbers are so tight in Parliament, especially in the Senate, that by withdrawing its support it can trigger a vote of confidence in the prime minister," Wolfango Piccoli, co-president of the consulting firm Teneo, said in a note on Monday.

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