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>> Italy's next government looks likely to be a radical marriage of a populist party and a far-right one, both of which want to ramp up state spending and challenge the EU. The Five Star Movement and the League Party say they're close to finalizing a deal, but they have yet to decide who should lead the coalition.
They were rivals in the March 4th election, which ended in a hung Parliament. But as Reuters' Gavin Jones says, they're not such unlikely bedfellows.>> They're two very angry parties. They have in common this anti-establishment, anti-elite kind of approach. The main problem is that their policies seem quite incompatible from an economic point of view inasmuch as they have very expensive proposals and very different proposals.
Five Star in particular wants to increase welfare benefits very much, and The League wants to cut taxes very much, and both of those things cost a lot of money.>> Five Star's flagship policy is a universal income for the poor, at an estimated costs of 17 billion euros a year.
While The League's hallmark flat tax rate of 15% would cut tax revenues by about 80 billion euros a year. That's likely to be a winner with Italian voters frustrated with years of austerity, but it would put them on a collision course with Brussels, which has strict rules on public debt.
>> They have the advantage that the European Commission is not very strong at the moment. It's a bit of a lame duck commission because its term ends in one year. So probably the Commission won't look for a fight with these parties once they're in power. But there will be problems, and it might be the right moment for Italy to finally try and face down the EU and have the kind of discussion that it's said for a long time that it wants to have, but has never actually had.
>> Many believe the two parties, which have toned down their rhetoric, will also scale down their plans. And if that upsets their voters, they can always blame each other.