The blackest forecasts within European Union did not have a written confirmation and so quickly arrived. The first draft of government agreement between league and 5-Star Movement (M5S), which on Wednesday insured to have agreement ready to form Italy's first antiestablishment executive, leaked on Monday night and confirmed fears. Part of document was denied. It was "old", authors said. As much as 24 hours that passed between his writing and publication in HuffPost. The new policy lives and dies even faster. Hours later, La Repubblica published an updated version that softened most anti-European aspects. The lyrics change, music is same.More information
- A draft of Italian agreement provides for a mechanism to get out of euro
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- Italy prepares for an ' antiestablishment ' cocktail
Matteo Salvini (Liga) and Luigi Di Maio (M5S) tried to lower tension with long videos on ir social networks. But markets were taken more seriously by a content of sovereignty character and with scarce scientific basis for its fulfillment. The Milan stock Exchange fell 2.3% and risk premium was fired to 150 points. The warning for navigators was clear. But Claudio Borghi, league's economic guru, said it was because "markets don't know economy." The nerves, for now, have not been infected to European exchanges and all, except Madrid, closed Wednesday in green.
The final agreement should be signed on Thursday, but party bases should vote on this weekend. Both celebrated advance on Wednesday. But Salvini, who appeared as a junior partner of Alliance (17.37% of votes against 32.6% of M5S), has managed to print Europhobe and Lepenista character of his party to agreement. It is seen in elements such as "fight to business of immigration", in reference to NGOs operating in Mediterranean and 500,000 irregular migrants who can be repatriated. But re is no consensus on who should occupy post of prime minister, who will rar be a figurehead to run a programme that promises to open a stage of tensions between Italy and EU.
The part of common policy was most disturbing of draft, of which mechanism to exit euro was n eliminated. Still, a Europe before great treaties is vindicated. "European governance will have to be rethinked, including monetary policy, in spirit of returning to pre-Maastricht state." In addition, document questions Stability Pact and points out that it should be rethought. The most striking of first draft, and which triggered alert in markets, was an unusual request to ECB to cancel 250 billion euros in state securities; That is to say, to freeze and to eliminate part of public debt in hands of ECB. Something that statutes of body that President Mario Draghi explicitly prohibit. It also had to be eliminated.Rapprochement with Russia
The agreement intends to reduce tax burden without specifying where resources will be taken. The keyword is flat rate, flat tax, reads document. The agreement envisages setting a fixed income tax rate of between 15% and 20% for families and 15% for companies. But now it is also introduced a system of deductions to make imposition more progressive and not to give anor kick to constitutional order.
In return, M5S manages to include its flagship proposal: basic income of citizenship. A support of 780 euros per month for unemployed. "Income presupposes an active commitment of beneficiary who will have to accept job offers that come from care centers (at most three proposals in one year), with ir cancellation if y refuse se proposals". To this measure y would allocate 17 billion a year, but some experts point out that it would cost twice as much.
One of surprises in internal key is creation of a body parallel to Council of Ministers to resolve issues in which both formations do not agree. The draft calls it "conciliation Committee" and is composed of Prime minister, political leader of M5S and Secretary general of league. The constitutionalists warn that it would be beyond limits of Basic Law.
Russia, as league wanted, occupies a prominent role. The draft confirms that Italy would remain in NATO with US as a privileged ally, but with an opening to Kremlin, for which it calls for an end to sanctions.