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Alessandro Di Battista of the 5-Star Movement gestures as he speaks during a rally in Palermo, Italy June 4, 2017. REUTERS/Guglielmo Mangiapane

(reuters_tickers)

By Crispian Balmer

PALERMO, Italy (Reuters) - Giovanni Costanza is unemployed, has five children, cannot get any state care for his profoundly deaf son and is struggling to make ends meet.

Like many Italians mired in poverty, he is throwing his weight behind the anti-establishment 5-Star Movement, which is gearing up for local and national elections and promising large welfare payouts to help the swelling numbers of struggling households.

Critics say the measure smacks of populism and risks bankrupting heavily indebted Italy. Five-Star - which leads national opinion polls alongside the ruling Democratic Party - says Italy is the only European Union country besides Greece that does not help the long-term unemployed and vows to change this.

The party pledge certainly resonates on the island of Sicily, where the jobless rate stands at 22 percent, youth unemployment is almost 60 percent. Fifty-five percent of people live on, or below, the poverty line - double the national average.

"Unless you have powerful friends here, you don't get anything," said Costanza, 39, who lives in Palermo's working-class neighbourhood of Cruillas and gets by with odd jobs repairing broken-down household appliances.

"Of course I am going to vote for the 5-Star. I don't know if they will change anything in the end, but at least they are promising to do things differently," he said.

While sun-drenched Sicily might historically be more deprived than the rest of the country it has also proved an accurate bellwether of Italian politics over the past 60 years.

For four decades it supported the dominant Christian Democrats before switching allegiances to Silvio Berlusconi's centre-right bloc, which famously won all 61 seats on offer here in a 2001 national election, and then drifted towards the centre-left. It now looks set to embrace the maverick 5-Star.

Latest opinion polls show the party, which was founded in 2009 by comedian Beppe Grillo, is backed by 37 percent of voters in Sicily, its highest score in any of Italy's 20 regions.

That puts it in a strong position to do well in municipal and regional elections set for June and November. It could also help drive the party towards national power by handing it the lion's share of Sicily's seats in the 630-seat national assembly at the next general election, due by May 2018.

The risk of a 5-Star triumph in Sicily generating momentum nationwide is often cited as reason for the keenness of the ruling Democratic Party to hold a snap national election this autumn, before the Sicilian regional ballot in November.

"We are a laboratory for Italian politics. The trends set here are replicated across the country within six months," said Giancarlo Cancelleri, 42, who is frontrunner to be selected as the 5-Star's candidate for regional governor.

"The others are afraid of us, that is why they are rushing to a general election," added Cancelleri.

MISTRUST

Unlike other non-traditional - so-called populist - parties that have flourished across Europe since the 2008 financial crisis, 5-Star straddles ideological divides, focussing its anger on rampant corruption rather than on mass immigration. The strategy has proved effective, and the eight-year-old party is backed by around 30 percent of voters nationally, according to opinion polls.

Tapping into festering mistrust of politicians, 5-Star lawmakers in the regional government only accept half their salary and have renounced their right to a monthly pension of 1,000 euros ($1,125) after just a single legislature.

Victory in November would be a milestone for the movement, giving it control of its first region, and one which enjoys significant autonomy. Sicily has its own parliament and writes its own laws, meaning the 5-Star would have the ability to introduce a pilot of its so-called citizen's wage.

The scheme proposes topping up a single person's income to a maximum 780 euros a month, while a family of four would be guaranteed at least 1,482 euros. Opponents says this would cost Sicily 2.4 billion euros a year.

"It would be catastrophic if they introduced this measure because we don't have the money," said Giovanni La Via, a centre-right Euro lawmaker from Sicily's second city, Catania.

"Any spare funds we have must go on improving infrastructure and creating the conditions to grow the economy. What we need here are jobs and motorways, not handouts," he told Reuters.

Cancelleri estimated the universal salary would cost no more than 700 million euros on the island and said it would be accompanied by policies to promote the private sector. "We will introduce it in an experimental phase and then review progress," he said.

MELTDOWN

Sicily's economic output fell more than 13 percentage points between 2008 and 2015. Although the economy has since started to grow again, it will take many years before it recovers the lost ground, leaving whoever is in charge with few resources.

The current governor, the centre-left's Rosario Crocetta, says his main achievement has been to save Sicily from default after it flirted with meltdown in 2012, and cutting waste.

As evidence of this, he points to a reduction in the number of forestry workers to 20,000 from 26,000. By comparison, Britain's Forestry Commission, which operates in an area nine times the size of Sicily, employs just 2,500.

Like many local administration positions in Sicily, the forestry jobs are often viewed as de-facto welfare, not genuine employment. The 5-Star says it will slim the public service, while cutting the red tape that stifles the private sector.

Although it has the most support of any party in Sicily, the movement has been hit by internal feuding - a problem that has often tripped it up across Italy thanks to a flat leadership structure that has led to fierce local power tussles.

The Sicilian divisions flared over allegations that 14 5-Star members, including three lawmakers, falsified signatures to enable candidates to run in the 2012 municipal elections in Palermo, the island's capital.

With a trial looming, mutual recriminations have flown over the scandal, hurting the party's bid to win the next mayoral election in the city this month.

The 5-Star candidate for mayor, Ugo Forello, dismisses the controversy and says he is confident he can overcome voter distrust to land the party its first triumph on the island.

"It is normal with such a diffuse base to have strong differences of opinion and the occasional dispute," he says as he walks round the Cruillas district, drumming up support.

Standing in the shade of a tree and watching Forello from a distance, the jobless Costanza says he isn't bothered by the party divisions. His main concern is taking care of his family, especially his deaf, three-year-old son, who has been waiting for a year for treatment. Hospitals say their clinics are full.

"I want this citizen' wage. It wouldn't resolve all my problems, but it would give me a base to survive from."

($1 = 0.8892 euros)

(Reporting by Crispian Balmer; Editing by Pravin Char)

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