Italy's 5-Star, League head for coalition at 11th hour

Italy's 5-Star, League head for coalition at 11th hour

Italy's 5-Star, League head for coalition at 11th hour

The yield on the benchmark 10-year bond was up 9 basis points to 1.86 per cent. The gap has increased by 16 points in the past three sessions.

Salvini responded by thanking Berlusconi, saying "we must now work on the program, timings, the team and the things we have to do". If it pushes for a re-vote, opinion polls suggest it will cede significant ground to its increasingly buoyant ally.

Lega leader Matteo Salvini and Five Star Movement leader Luigi Di Maio have officially announced Thursday's talks between the two eurosceptic parties have been successful, sparking fears of renewed challenges to the European Union after Brexit. "We'll start with the issues and then we'll move on to names" of ministers, he said.

The centre-left Democratic Party (PD), which recently held power but came a distant third in the election, expressed little interest in forming a government with Five Star, preferring to carve out a role as the opposition. He added: "We would not impose vetoes or pre-conditions".

Without their support, Mr Mattarella is unlikely to get his proposal through parliament, said Luigi Ferrata, public affairs account director at Community Group, which is a political consultancy based in Rome.

"With Berlusconi out, an anti-establishment government is one step closer to reality and while both these parties may have their differences, they are united in at least one thing: more fiscal stimulus", said Antoine Bouvet, a rates strategist at Mizuho in London.

Both parties say they are opposed to economic sanctions on Russian Federation and have pledged to try to get them overturned.

Salvini repeated Wednesday that a "prerequisite" of the talks with the 5-Stars was the center-right coalition remaining united.

Italy's ex-premier has a scandal-filled career, including a tax fraud conviction.

A question mark still hangs over who would clinch the top spot in a M5S-League coalition - Both Di Maio and Salvini have said they are willing to step back and let someone else take the premiership but, according to the press, neither has completely given up on their ambitions to lead the country.

If the two populist parties fail, the president is expected to go ahead with his plan, even though they have vowed to use their blocking majority to defeat his candidate in a confidence vote.

A fresh wave of political uncertainty in Italy sent its stocks and bonds sliding after a doomed attempt to break the country's political deadlock in effect fired the starting pistol on a second election of the year.

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