Italy’s potential coalition wants €250bn debt written off

POPULIST parties on the brink of forming Italy’s new government discussed demanding a debt write-off of €250 billion – virtually guaranteeing a showdown with Brussels.

A leaked draft document drawn up by the anti-establishment Five Star Movement, suggested the two parties try to form a coalition government after 10 weeks of post-election deadlock. It would ask the European Central Bank to write off 10 per cent of Italy’s debt. The document debated scrapping the euro – but the parties later said the draft was “out of date” and had been changed.

But as the European Commission warned Italy over the direction it was heading, Mr Salvini denounced a Financial Times article claiming Italy was on the brink. “The barbarians are not merely massing at the gates of Rome. They are inside the city walls,” it said. Mr Salvini retorted: “Better a barbarian than a slave that sells Italy’s dignity, future, businesses and even its borders.”

He also attacked Dimitris Avramopolous, the EU’S migration commissioner, who warned Italy not to alter its refugee policy. Mr Salvini said money spent on migrant centres would instead pay to expel “thousands of criminals”. Luigi Di Maio, head of Five Star, warned that coalition policies would represent a “bomb” to the political establishment.

Wolfgango Piccoli, an analyst for Teneo Intelligence, said many proposals were “utterly unrealistic” but added: “Five Star and The League know that a public fight with Brussels will boost their popularity.”