FIRST AIRED: May 18, 2018

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00:00:00
>> Italy is about to get a taste of an unusual political recipe. Two of its anti-establishment parties, the leftist Five Star Movement and the far-right League are to form a coalition. The move ends two months of political stalemate. Reuters Kevin Jones is in Rome.>> They have certain things in common, that they both have in common, hostility to the establishment, to what they call the elite.
00:00:26
They have a certain element of euroskepticism, especially the League. And they're trying to merge these two proposals, really.>> The pair have agreed to what they call a contract. It calls for steep tax cuts and a big boost to welfare benefits. The proposals have rattled investors who feel that a heavily indebted county now plans a spending spree.
00:00:50
Italian stocks and bonds both sliding this week.>> If these measures are adopted, then it's going to be very difficult for Italy to meet its public deficit commitments and its commitments to lower the public debt. Which is the second highest in the eurozone, after Greece's.>> Italy is the eurozone's third largest economy.
00:01:10
But its debt sits at around 132% of GDP. Both parties are euroskeptic and want a review of the EU's governance and fiscal rules.