European Union accused of 'interfering' in Italian politics

European Union accused of 'interfering' in Italian politics

This year's "State of the Union" conference opened in Florence on Friday (11 May), coinciding with the news that Italy is likely to get a coalition government of two Eurosceptic forces, both keen on leaving the eurozone.

Italy, one of six founding members of what became the European Union, has been stuck in a political quagmire since its inconclusive March 4 election, which was dominated by a struggling economy, the refugee crisis and illegal immigration.

Populist Five Star Movement leader Luigi Di Maio and head of the nationalist League Matteo Salvini were discussing the deal at the Italian parliament after a summit in Rome on Wednesday evening that Salvini's spokesman Luca Morisi said was aimed at nailing down a "few issues". "It would be insane to give up at the moment of truth", Mr. Salvini told followers in a Facebook post. Di Maio promised dialogue with the European Union, but warned that "we won't be subordinates to some Eurocrats".

Now that such a government is about to take control of Italy, the possibility of the Italian exit from the euro can not be ruled out.

Moments earlier, a 5-Star source had said the program had been substantially agreed and that it contained no reference to a possible exit from the euro or "anything that could cause any concern regarding Italy's euro membership".

NEW YORK, May 16 (Reuters) - Italy's borrowing costs jumped on Wednesday and the country's stocks slid after reports that the two parties seeking to form Italy's next government might seek debt forgiveness, while the USA dollar rallied further to a five-month high.

Italy offers some of the highest yields of European government bonds in the investment-grade sphere, at almost 2 percent in 10-year maturities.

Berlusconi has refused to govern with the 5-Stars, who he regards as "more risky than communists". Though both draw support from young voters and those who oppose traditional political powers, their policies on fiscal matters and on the environment are often at odds.

European Union accused of 'interfering' in Italian politics

The two anti-system parties have completed the joint policy programme for a coalition government and have passed the document to leaders for their approval.

After Berlusconi refused to have anything to do with the 5-Star Movement, who he regards as "more risky than communists", Salvini and Di Maio set out to negotiate an agreement to join forces in government.

"Both parties campaigned by attacking the political elite", Ms. Pasini said.

Mr. Chiapponi said that would probably result in instability.

Despite a certain convergence of views, the two parties have not managed to agree on a single candidate for the prime minister's post.

Mr. Berlusconi had been prohibited from holding public office because of a major tax fraud conviction, but a tribunal lifted the ban over the weekend.

Mr Di Maio previously said his first trip overseas after the creation of the government will be to Brussels, as he believes "in dialogue and participation". "He can still make his voice heard".

A government led by Italy's populist 5Star Movement and far-right League would seek to renegotiate European treaties and call for a "radical reform" of the EU's stability and growth pact, according to a leaked copy of the parties' draft coalition agreement.

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The NSE 50-share Nifty also lost 58 points, or 0.54 per cent, to 10,682, after shuttling between 10,777 and 10,664. Coal India , PowerGrid and were the major gainers while Tata Steel, Adani Ports and Yes Bank were losing the most.

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