Italy M5S leader says govt deal would be 'bomb' for establishment

Brussels calls on Italy to stay committed to the 'European path'

"First must come the things that need doing, and only afterwards (we need worry about) absurd rules written many years ago when the world was totally different", he said.

Mr. Berlusconi, 81, the colorful and polarizing four-time prime minister who resigned from his last government in disgrace in 2011, has been an unexpected wild card in the process.

M5S leader Luigi Di Maio said on Tuesday that "perhaps we'll be able to wrap up the contract of government" on Wednesday.

Salvini, saying he was "optimistic but realistic" about a deal, took rhetorical aim via social media at European Union migration commissioner Dimitris Avramopoulos. European Union officials also are nervously following developments of a proposed Italian referendum on the future of the euro currency and policies aimed at turning away refugees from Africa and the Middle East.

The 39-page document, obtained by Huffington Post Italia, also calls for a renegotiation of Italy's European Union budget contributions, an end to sanctions against Russian Federation and plans to dismantle a 2011 pension reform that raised the retirement age.

Both Di Maio and the strongly eurosceptic Salvini said that the final version of the "Contract for the Government of Change" and composition of ministers would be put to the parties' members for approval.

The leader of Italy's anti-establishment 5-Star Movement took his campaign for a referendum on the euro to Brussels on Wednesday, holding out the prospect of cooperating with other anti-euro parties. Italy, along with Greece, has taken the brunt of the Mediterranean migrant crisis and has been credited with saving Europe's honour for its efforts to save lives at sea.

The text confirms that both parties want an "immediate withdrawal" of European Union sanctions against Russian Federation, to which both parties have grown close.

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But this week, it reared its head again as Five Star and the League closed in on a deal to form a populist government in Rome. "Italy is of the highest importance for the European Union".

The League and Five Star have numerous areas where they differ on policy, something which has made progress in coalition talks slow and arduous.

After Berlusconi refused to have anything to do with the 5-Star Movement, who he regards as "more unsafe than communists", Salvini and Di Maio set out to negotiate an agreement to join forces in government.

The news drove up Italian bond yields and the cost of insuring Italy's debt against default, before Claudio Borghi, the League's economics chief, told Reuters the request for debt forgiveness was never in an official draft of their program.

The League's support largely is centered in northern Italy, where it backs lower taxes and reining in central government spending, a popular platform in Italy's most productive region. "The spirit must be to return to the pre-Maastricht setting in which European states were moved by genuine intents of peace, brotherhood, co-operation and solidarity", Five Star and the League said. "We can not go to Brussels with positions that are far apart", he said.

"As yields go up, they start to be a little bit more competitive with risk assets and with stocks in particular".

"I see in a certain establishment such a fear of change", he said. "It's important to stay the course", Dombrovskis said.

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