World News

Italian populists on final straight for govt deal

Italian populists on final straight for govt deal

At a business forum on the shore of Lake Como in September previous year the leaders of Italy's soaring populist parties brushed off suggestions that they wanted to lead their country out of the euro.

Three EU commissioners have already stressed there is no appetite for any change in the rules.

The negotiations have been ongoing over the last 5-6 days between 5-Stars DiMaio and the League leader Matteo Salvini.

In a direct challenge to European Union fiscal rules, the draft accord also wants the bloc to create fiscal headroom for spending by adjusting the formula used to calculate Italy's debt burden, which the rules say must be reduced.

The paper warned that Italy was on the verge of forming "the most unconventional, inexperienced government to rule a western European democracy since the EU's founding Treaty of Rome in 1957". The two parties dismissed the version as "old" and said they were no longer questioning the country's euro membership. It favors lower taxes and reining in central government spending, much of which party leaders say is redistributed to - and wasted by - the poorer south. "Pretending the unilateral cancellation of €250bn of debt bought by the European Central Bank as part of the quantitative easing programme. would be absurd", Anthilia Capital Partners fund manager Giuseppe Sersale said. This would lower Italy's public debt, now at 130% of national output.

And while Di Maio wants to introduce a national minimum income, Salvini is pushing for a flat tax to reduce middle class's taxation.

The coalition could also fall out with Brussels over its plans for a clampdown on immigration and a call to cancel all economic sanctions on Russian Federation.

Italian populists on final straight for govt deal
Italian populists on final straight for govt deal

The document - entitled Contract for a Government of Change - paves the way for a general confrontation with Brussels, as it envisages "immediately ending sanctions against Russia", which have been in place since 2014 following Moscow's invasion of neighbouring Ukraine. Both populist parties are seen as friendly to President Vladimir Putin.

"This is our message to the new government". Di Maio told reporters in parliament "the recipe to lower public debt is by investments and expansionary policies".

How risky for the EU? Di Maio promised dialogue with the European Union, but warned that "we won't be subordinates to some Eurocrats".

Five Star and The League once sought to leave the European Union and return to Italy's old currency, the lira.

Both Salvini and Di Maio have said they want their voters to have a say on the joint government program they've drafted. If they fail to do so, fresh elections look inevitable. "We can not go to Brussels with positions that are far apart", he said.

Italy's rival populist leaders sought more time Monday to hash out a deal to govern together, with one side citing significant differences over how to stop the flood of migrants coming in and the other insisting his supporters have their say online before finalizing any coalition deal.

Another vice-president, Valdis Dombrovskis, said the Commission still expected Italy to bring down its debt.

More news: Bangladesh SC grants bail to ex-PM Khaleda Zia in corruption case