Italy govt talks between 5-Star and League going well -joint statement

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Italy's two populist parties are readying to seize power after attempts to form a coalition government collapsed, raising the prospect of snap elections as early as July.

Italy has been stuck in political limbo since inconclusive elections in March, with 5-Star offering to form a government with the far-right League but only on condition that it breaks clear from its veteran partner, Berlusconi.

Efforts so far had been thwarted by Five Star Leader Luigi Di Maio's demand that League head Matteo Salvini drop his alliance with Berlusconi's Forza Italia.

FILE PHOTO: League party leader Matteo Salvini (C) speaks next President of Fratelli d'Italia party (Brothers of Italy) Giorgia Meloni (L) and Forza Italia leader Silvio Berlusconi following a talk with Italian President Sergio Mattarella at the Quirinale palace in Rome, Italy, April 12, 2018.

"I think we could see a polarisation of the electorate between Salvini and Di Maio, because the other candidates are weaker this time around".

Both parties asked President Sergio Mattarella, whose job is to name a new prime minister following an election, to give them until Sunday to iron out their agreement and come up with a cabinet line-up.

An alliance between Five Star and the League has always been considered the most destabilising outcome of the election because both parties have attacked European Union fiscal rules, banking regulations, trade deals and sanctions against Russian Federation.

Both the League and Five Star are staunchly opposed to a caretaker government and without their support the initiative would not pass a confidence vote in parliament. The anti-establishment group had refused to negotiate with the centre right as a whole, saying it was only willing to form an executive with the League.

On Monday, Mr Mattarella called on warring political leaders to support a "neutral government", declaring that there was no longer any hope for a workable political alliance and that Italy can't wait any longer for leadership.

The M5S delegation said after the talks that there had been "very many convergences" with the League, "beyond expectations", including on the flat tax and immigration as well as "total harmony" on scrapping the 2011 Fornero pension law.

The alternative could be fresh elections as early as July. Elections in the fall could also pose problems for the approval of the next budget.

Security and migrant landings will be key parts of the government programme Salvini said later Thursday.

The League and 5-Star, after 9 weeks of stalemate, said on Thursday they had made "significant steps" towards forming a government.

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