MILAN (Reuters) – Italian Prime Minister Giuseppe Conte insisted on Tuesday that he would not give way in a standoff with ArcelorMittal over the future of troubled steel plant Ilva, as the threat of thousands of job losses piled pressure on the ruling coalition. ArcelorMittal, the world’s biggest steelmaker, said on Monday it was scrapping a deal to buy Ilva’s huge plant in the southern city of Taranto after Rome reneged on a pledge to grant immunity from prosecution over environmental damage at the site. However the government has insisted that the Amsterdam-listed steel group has no basis to withdraw from a contract it finalised last year and has accused the company of using the immunity issue as a pretext. “A contract was agreed and we won’t bend on this. We expect that commitments be respected,” Conte told reporters in Milan on Tuesday. “You come to Italy, you win a tender, and the contractual terms included and laid out in the tender have to be respected,” he said. With the latest data from statistics office ISTAT on Tuesday showing no signs of improvement for Italy’s stagnant economy, Ilva’s problems have added to worries about the country’s eroding industrial base. The ruling coalition between the center-left Democratic Party and the anti-establishment Five Star Movement has come under heavy pressure following ArcelorMittal’s decision to scrap the Ilva contract. Opposition parties have accused the government of driving away foreign investors and undermining an area with some of the highest levels of unemployment in the country. In addition to around 8,000 workers in Taranto, thousands more jobs depend indirectly on the plant, one of a shrinking number of large-scale industrial employers left in the south. On Tuesday, the head of the center-left Democratic Party Nicola Zingaretti said his party would propose measures to ensure that any buyer would not be liable for environmental damage caused under previous management. “Anyone who pollutes should pay but a group implementing an environmental plan should not have penal liability for previous actions for which it had no responsibility. We will propose parliamentary measures in this sense,” he said in a statement. However it was not clear whether that would be enough to save the plant, which has been blamed for hundreds of cancer-related deaths in recent years. The government’s promised legal shield would have given ArcelorMittal immunity from possible costly prosecution related to a planned clean-up at the plant. However, the 5-Star Movement has opposed handing the group legal carte blanche, saying it was unfair to Taranto locals whose health might have suffered because of the steelmaker. Parliament ditched the shield effective Nov. 3.