Italy's 5-Star, League on Verge of Government Deal; Markets Shudder

Cheryl Sanders
May 17, 2018

Plans by Italy's populist parties to leave the euro and cancel Italy's debt if they form a government have been condemned as unrealistic by analysts.

The joint document will demand the ECB forgives Italy of €250 billion Italian benchmark BTP bonds bought under the bank's so-called "quantitative easing" programme to help reduce Italy's public debt.

"Italy is of the highest importance for the European Union". Italy, along with Greece, has taken the brunt of the Mediterranean migrant crisis and has been credited with saving Europe's honour for its efforts to save lives at sea.

It could lead to a spate of Eurosceptic, populist parties making promises to clear European Union debt.

A new statement confirmed the new potential coalition had decided "not to call into question the single currency".

The League and 5-Star have failed to agree on forming a coalition between themselves after an inconclusive election on March 4, but they have enough votes together in parliament to block any other government from taking office.

EU Commission vice-president Jyrki Katainen had warned on Tuesday against the formation of a government that might disregard the terms of the EU's stability and growth pact.

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Both groups have a history of euroskepticism. However, the League still wants to leave the eurozone as soon as politically feasible. "Now it's time for legality, security and expulsions", Salvini said.

According to Italian media reports, their nominee for Prime Minister is likely be from a "third party" and will have to be able to make the eurosceptic nature of the new government workable with Brussels.

Other reports by iNewsToday