5-Star, League want $296 bil. in Italian debt to be forgiven

Salvini Di Maio

5-Star, League want $296 bil. in Italian debt to be forgiven

But some of the details have not been denied and will alarm the European Union.

Matteo Salvini is the leader of the Northern League.

The far-right League and the 5-Star Movement have been discussing a common policy agenda for a week after a March 4 election ended in a hung parliament, but just today, the two anti-system parties have completed the joint policy programme for a coalition government and have passed the document to leaders for their approval.

"If we're good enough to find the solution, we'll get started (with a government) without problems, but we don't want to take the president and the Italians for a ride", Salvini said, citing the differences still remaining.

LONDON, May 16 (Reuters) - The euro slumped to a five-month low on Wednesday after reports that a likely future Italian government would seek debt forgiveness from European creditors and as the dollar resumed its powerful, month-long rally.

"We don't want to split the center-right alliance", Salvini said. In recent days, Mr Salvini has been trying to push Mr Di Maio towards a more confrontational attitude with regard to Brussels on everything from the single currency to budget rules and migration policy. It has hesitated about signing up to a full-frontal confrontation with Europe over public accounts. The League has pledged to introduce a flat tax rate of 15 per cent, which would lower tax revenues by some 80 billion euros ($95 billion) per year, according to some estimates, while 5-Star has pledged new welfare payments for the poor costed at 17 billion euros.

They had argued that their proposal to hold a referendum on whether to leave the eurozone was a thing of the past, even as the party's founder, the comedian Beppe Grillo, floated the idea again this month.

"This is the time to have the courage to go all the way", he said, promising measures including tougher penalties for tax evaders and cuts to the so-called "golden pensions" enjoyed by wealthy former politicians and business executives.

"It would be insane to give up at the moment of truth", League leader Matteo Salvini said in a live video stream on Facebook, adding that he would not be intimidated by negative reaction from financial markets or attacks from the media.

How is this going down in Brussels?

"Italy is of the highest importance for the European Union".

"It's very clear that in current times of economic growth Italy needs to put its debt on a downwards trajectory", he said.

The League has promised a tougher line on migrants arriving from Africa and denounced Avramopoulos's comments. League leader Matteo Salvini and 5-Star Movement leader Luigi Di Maio are insisting they are close to a deal created to help ordinary Italians. Di Maio promised dialogue with the European Union, but warned that "we won't be subordinates to some Eurocrats".

Immigration Commissioner said he hoped that Italy would not "change the line on migration policy". However, three 5-Star sources said the main stumbling point remained who should head the administration.

As of Wednesday morning, officials involved in the talks insisted that Five Star and the League were finally close to a deal, though it was still unclear whether the two sides had settled on a choice for prime minister.

Latest News