May 10, 2018 / 10:02 AM / 10 months ago

Factbox: Likely policy priorities for a League/5-Star government in Italy

ROME (Reuters) - Italy’s far-right League and anti-establishment 5-Star Movement are holding talks to see if they can form a coalition and end nine weeks of stalemate following inconclusive elections in March.

The two parties had very different election manifestos. Here are some of the areas where they see overlap and also issues likely to be addressed in any deal.


Both parties say they want to scrap the 2011 “Fornero Reform” which raised the retirement age and required further rises over time, with the next hike - to 67 years from 66 years and 5 months - due on Jan. 1, 2019. Economists say repealing the law would cost 20 billion euros ($24 billion) a year. League leader Matteo Salvini has said it will be his first priority.


The League has said it wants to introduce a flat tax pegged at 15 percent. It seems very unlikely that 5-Star would accept this, but a coalition pact would almost certainly offer some sort of tax cut pledges while at the same time pushing for a new fiscal regime targeting major internet multinationals.


The 5-Star’s flagship policy promised monthly income of at least 780 euros ($925.31) a month for poor families. The League has baulked at this, saying it would encourage people not to look for work. Economists say it could cost 30 billion euros a year. But 5-Star will want a big lift to welfare for the poor to satisfy its army of voters in the less wealthy south.


Both parties have said they are ready to override EU budget deficit restrictions to help boost growth. The first major battle could be over the 2019 budget where they will likely need about 12.5 billion euros to avoid an automatic hike in sales taxes which has been promised to Brussels to keep the deficit on a downward path.


The League has vowed to block the arrival of boat migrants from Africa and to deport up to 100,000 illegal immigrants per year. 5-Star has been less strident on this issue but any government deal would likely include promises to strengthen the fight on immigration and perhaps hire more police.


Both parties say they are opposed to economic sanctions on Russia and have pledged to try to get them overturned. They are also likely to push to avoid any trade war with Washington over U.S. President Donald Trump’s threat to hike metal tariffs.

($1 = 0.8430 euros)

Reporting by Crispian Balmer; Editing by Andrew Heavens

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