Italy's Berlusconi gives green light to 5-Star/League government

Italy's Berlusconi resists pressure, for now, to stand aside

The chances of a populist government ruling Italy received a sizable boost from Silvio Berlusconi as he dropped his opposition to a tie-up.

The same survey showed 5-Star and the Democratic Party (PD) broadly unchanged from their election results on around 32 percent and 19 percent respectively. They on Thursday asked Mattarella to give them until early next week.

The March vote saw a center-right alliance, which includes Forza Italia and the League, winning the most seats, while 5-Star emerged as the biggest single party.

Both the League and Five Star are staunchly opposed to a caretaker government and without their support the initiative would not pass a confidence vote in parliament.

Salvini, who has mostly campaigned on an anti-immigration platform, could potentially take the role of interior minister with Di Maio as foreign minister.

Benchmark 10-year Italian government bond yields jumped as much as 6 basis points to 1.94 percent and the spread between Italian debt and its German counterpart stretched to its widest in six weeks at 138 basis points. The gap has increased by 16 points in the past three sessions.

"We still have to work on the programme, on dates, on the team and the things that need doing", Salvini said.

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This raises the likelihood of an unprecedented immediate return to the polls, even as early as July. "So it's either a centre-right government or elections as soon as possible", said League leader Matteo Salvini after Mattarella spoke. "We'll start with the issues and then we'll move on to names" of ministers, he said. The 5 Star Movement has refused to form a government that implied sharing power with him. He added: "We would not impose vetoes or pre-conditions".

In a joint Thursday statement, the parties said they made "significant steps forward" in negotiations on who should be prime minister and who should be on the list of ministers.

No party obtained the numbers to form a majority and the country has been scrambling to form a government ever since.

And on Wednesday, the Five Star Movement leader finally agreed he would stop imposing any vetos on Mr Salvini over Mr Berlusconi's position in a potential future post-election coalition.

Italy's ex-premier has a scandal-filled career, including a tax fraud conviction.

With Mattarella preparing to nominate a non-partisan figure as prime minister in an effort to break the deadlock, Di Maio and Salvini met in Rome Wednesday for one more attempt to agree on an alliance. This would remove centrist parties from the governing majority.

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