May 11, 2018 / 11:02 AM / 11 days ago

Italy's new government to be 'reasonable and rational' with budget: source

ROME (Reuters) - A new Italian government that is expected to be seated next week will be “rational and reasonable” in managing public accounts, and any potential budget deficit increases will be discussed with Brussels first, a 5-Star Movement source said.

The far-right League party and the anti-establishment 5-Star Movement are holding talks in a bid to form a coalition government and plan to present a common name for prime minister on Sunday, the source said.

The 5-Star wants to provide a universal income for the poor, while the League wants to slash taxes. Both parties have said they want to head off a value-added tax increase worth 12.5 billion euros ($14.9 billion) due to kick in next year unless alternative deficit cutting measures are found.

“The government will be rational and reasonable (with the public accounts),” the source said. “We want to show courtesy,” he said, adding that the administration would discuss any planned deficit increases with Brussels first.

($1 = 0.8370 euros)

Reporting by Giuseppe Fonte; Writing by Steve Scherer

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