Italy’s populists close to a deal that will clash with EU

ITALY’S populist parties asked for more time to form a government yesterday as they thrashed out a spending plan that would cost the country more than €100billion (£88bn) and set it on a collision course with the EU.

Luigi Di Maio, the head of the Five Star Movement, and Matteo Salvini, the leader of The League, met President Sergio Mattarella in Rome. After the talks, Mr Di Maio said they were asking for “a few more days” in order to finetune policies and reach a deal.

The League’s leader admitted that there was “notable distance” between the parties, particularly on immigration. Mr Salvini has pledged to expel hundreds of thousands of migrants who have had their asylum applications turned down after crossing the Mediterranean from Libya.

He said the two parties were “working day and night” to try to reach an accord. Both Mr Di Maio, 31, and Mr Salvini, 45, had claimed the right to become prime minister but with neither willing to compromise, they are expected to nominate a mutually acceptable neutral figure for the role. There was speculation that the top job could be offered to Giulio Sapelli, an economist and university professor, or Giuseppe Conte, a law professor at Florence University.

If a coalition government is formed, the stage will be set for a showdown with Brussels for exceeding the three per cent budget deficit ceiling after the parties put forward a package of tax cuts and social welfare spending increases that could cost €104billion.

“If implemented, it would be the biggest shake-up of the Italian economic system in modern times,” Wolfgang Munchau, head of the Eurointelligence think tank, told Reuters. The alliance would be a huge challenge to Brussels and will be the first time a founding member of the European project has elected a populist government.