* Salvini creates far-right alliance before EU vote
* Expects EU rules to change in wake of May election
* Far-right parties to stage Milan rally on Saturday
By Sara Rossi and Crispian Balmer
MILAN, May 17 (Reuters) - This month’s European Parliament election will shake up the continent, leading to a relaxation of budget rules and influencing the choice of the next central bank chief, Italian Deputy Prime Minister Matteo Salvini said on Friday.
League party leader Salvini is staging a rally on Saturday of nationalist and far-right movements from 12 countries, looking to forge an alliance of eurosceptic groups that can shape policy-making across the 28-nation European Union.
“I think lots of things will change in Europe,” Salvini told Reuters ahead of the rally, predicting that he and his allies would win a significant number of seats in the new European Parliament in the May 23-26 election.
A number of top EU jobs will be up for grabs after the vote, including the president of the European Central Bank. Italy’s Mario Draghi is due to leave the post later this year.
France’s Benoit Coeure and his compatriot Francois Villeroy de Galhau are among the frontrunners, while Germany’s Jens Weidmann is also seen as a potential candidate.
Salvini said nothing should be taken for granted. “We don’t necessarily always have to chose between Paris and Berlin,” he said.
The European Parliament is consulted on who should take charge of the ECB, but the final decision rests with EU leaders. Salvini hopes a strong showing by nationalists will give them greater leverage when key posts get filled.
Earlier, speaking to a group of foreign reporters, Salvini said the next European Commission had to rewrite strict rules that set limits on budget deficits and debt, saying they were “strangling” economic growth and causing unemployment.
“The eurosceptics, from my point of view, are those who govern Europe now,” he said, adding that he wanted to return to “pre-Maastricht rules” when there were no limits on borrowing.
Italy’s government clashed with Brussels last year over its budget plans before finding a compromise. Salvini has suggested the coalition will ignore restraints in the 2020 budget, arguing the priority was to boost growth.
His comments this week pushed the spread between Italian and German bond yields to three-month highs.
But Salvini was unrepentant, saying the only way to lift investor confidence in Italy was to revive the long-underperforming economy.
“Reducing taxes is the only way to lower the spread as well as debt and deficit, so they should allow us to cut taxes,” he said.
He said he also wanted the European Commission to present a new seven-year budget, branding current proposals “unacceptable”, including plans to cut agriculture spending, and demanded an overhaul of EU banking rules.
Italy has railed against EU rules covering failing banks, saying they unfairly penalised savers.
The Italian government is facing a new banking headache after a private-sector deal aimed at safeguarding struggling regional bank Carige collapsed earlier this month.
Both the League and its coalition partner the 5-Star Movement denounced the previous government for using taxpayer money to save other troubled banks. However, Salvini did not rule out state intervention for Carige.
“I hope there’ll be a market solution. The priority is to safeguard savers, so we will definitely not remain idle,” he said. (Writing by Crispian Balmer; Editing by Janet Lawrence)