×

Italy's Renzi defies foes, opens way for party leadership battle

Italian Prime Minister Matteo Renzi delivers a speech during a press conference at Palazzo Chigi in Rome on November 28, 2016.
Andreas Solaro | AFP | Getty Images
Italian Prime Minister Matteo Renzi delivers a speech during a press conference at Palazzo Chigi in Rome on November 28, 2016.

Former Italian prime minister Matteo Renzi resigned as head of the ruling Democratic Party (PD) on Sunday, opening the way for a leadership fight in which he will take on rivals threatening to split the center-left.

Battling for his political life, Renzi made clear he would seek re-election and warned that the PD's internal feuding was proving a gift to its main opponent in parliament, the anti-establishment 5-Star Movement.

A decade after its foundation, the PD is on the cusp of a schism that risks bringing yet more political instability to the euro zone's third-largest economy, which has been mauled by years of recession, high unemployment and towering debt.

A small, influential group of PD dissidents say that the party has shifted too far from its leftist roots and wants the former premier to stand aside. Renzi's supporters say his vociferous opponents are driven by personal animosity and are looking to bolster their influence in a period of flux.

"The only word worse than 'schism' is the word 'blackmail' ... To ask me to leave is not democratic," Renzi told a party assembly in a smart Rome hotel, confirming he would stand again for the PD leadership he first won in 2013.

A trio of leading critics, including the heads of the Tuscany and Puglia regions, later issued a statement accusing Renzi of refusing compromise and seeking a split.

"It is now clear that Renzi has chosen the path of a schism and bears a heavy burden of responsibility," the three men wrote in a statement that surprised PD directors who had thought that their assembly had managed to heal some of the wounds.

'Horrified'

"I am shocked and horrified," said Lorenzo Guerini, the deputy head of the party.

Renzi quit as prime minister in December after losing a referendum on constitutional reform but is eager to return to power and is pushing for national elections to be held this year rather than early 2018 as scheduled.

This has angered the PD dissenters, who argue that more time is needed to work out the party's problems and to develop a manifesto that promotes welfare spending and tackles inequality -- areas that they say the PD-dominated government has ignored.

PD officials are due to decide on Tuesday when to hold the leadership ballot. Any move towards a swift vote would bolster Renzi's quest for early elections and make a schism more likely.

Recent opinion polls have put the PD neck and neck with the 5-Star Movement, founded by comedian Beppe Grillo, which wants a referendum on Italy's euro membership.

"Oh Beppe, what a fine present we are offering you by only talking about ourselves," Renzi said.

If the dissidents do form a new party, polls say they could win more than 5 percent of the vote. With the next election likely to be held under a proportional representation system, such a result could give them more power in the next parliament than if they remain in a Renzi-controlled PD.

Standing in the street outside the party meeting, a few PD supporters came to urge their leaders to stick together.

"It is vital that we remain united," said Rome architect Emma Cavallucci, holding the hand of her toddler daughter.

"Our leaders only seem to be talking to each other, not to the world outside. Don't they realize the damage they are doing us?"

Follow CNBC International on Twitter and Facebook.