Published: Thu, May 17, 2018
People | By Leon Thompson

Brussels calls on Italy to stay committed to the 'European path'

Brussels calls on Italy to stay committed to the 'European path'

"It's just one of the factors that reminds us again that European growth is slowing down", he said.

Di Maio shrugged off such warnings as the protests of "Eurocrats that nobody elected", while on Wednesday Salvini, attacked European Union commissioner Dimitris Avramopolous' request that Italy's new government not change its policy on migration.

As Italy moves closer to the formation of a government between the anti-establishment 5-Star Movement (M5S) and Lega (League), a leak to Huffington Post of a 40-page policy contract between the two Eurosceptic parties that details their roadmap rattled global markets on Wednesday.

"This is our message to the new government". The top two finishers - the upstart anti-establishment 5-Star Movement and the nationalist League party - have been inching this week toward an alliance that would have a razor-thin majority in Italy's parliament. Now they say they will try and reform the European Union from within. "I think investors are recognizing we are at the beginning of the beginning of this, so it's not anything to make dramatic portfolio moves or any significant bets on", Nixon said. Di Maio promised dialogue with the European Union, but warned that "we won't be subordinates to some Eurocrats". The policy programme will probably be published on Thursday, 5-Star said. Five Star would put the pact to an online vote of its members and The League says it will take the deal to the streets. The League is also pushing an ambitious overhaul of the justice system.

Fed up with the country's long, seemingly irreversible economic decline, persistent high unemployment and a refugee and migrant crisis, Italy's voters turned on the political centre that has governed (or failed to govern) Italy since the 1980s.

Some analysts played down the importance of Italian politics for the euro on Wednesday. It would also be Italy's first all-populist government.

Italy's benchmark stock index - the FTSE MIB Index fell 2.2%, while the 10-year Italy government bond yield soared 12 basis points to 2.075%.

Luigi Di Maio
GETTYFive Star leader Luigi Di Maio claims a coalition deal is close

The euro slid 0.2 percent to $1.1787 EUR=, slightly above the $1.1763 2018 low it hit on Wednesday. "Nobody knows exactly how it will all play out". Investors are betting that USA interest rates will need to rise further to curb inflation while other central banks are postponing monetary tightening.

The 5-Star Movement has a much greater appeal in the south, where the youth unemployment rate runs higher than 50 percent in many areas.

"European (budget) constraints need to be reviewed, together with our partners, but they need to be reviewed", Di Maio said on Facebook.

They are still discussing how they want to tighten immigration which they describe in the leaked draft as "unsustainable for Italy".

Nicola Pasini, a political scientist with the State University of Milan, said the parties are not a natural fit.

But this week may go down as the moment when Mr Salvini and Mr Di Maio solidified their alliance on a platform - and tone - of conflict and defiance towards Brussels. But Giovanni Orsina, a historian at Rome's Luiss University and the author of a book about Mr. Berlusconi, said he could push for some policies behind the scenes.

It is still not clear if, or when, this coalition government might be formed and both parties want to check back with their supporters.

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