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May 13, 2018, 8:39 p.m. EDT

Italy’s populist 5 Star, League parties reach deal on government program

Premier, ministers to be named within days

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By Giovanni Legorano

Anti-establishment 5-Star Movement leader Luigi Di Maio speaks in April. The formation Sunday of a governing alliance between the two parties comes after more than two months of bickering among political leaders.

ROME—Italy’s antiestablishment 5 Star Movement and hard-right League party have reached an agreement on a government program, likely clearing the way for the formation of a governing coalition between Italy’s two largest antiestablishment parties.

The formation of a new government—which is expected in the coming days—between the two groups marks one of the biggest wins yet for the political insurgencies shaking Europe’s establishments.

Read: Italian bonds take a beating on expected ‘tail risk’ from populist government

The two parties struck a deal Sunday evening on a pact that would underpin a government coalition between the two. Leaders of the two groups, however, are still negotiating the members of a government cabinet, including the prime minister. An announcement of those names should come early this week, according to weekend statements by leaders of both groups.

5 Star and League leaders are slated to meet Monday with Italian President Sergio Mattarella, whose responsibility it is to guide the formation of a new government.

The coalition must then win votes in both houses of parliament. The League and 5 Star together enjoy a comfortable majority in each house.

The coalition agreement includes measures such as a universal basic income for the unemployed, a rock-bottom flat tax and the revocation of a sweeping pension reform introduced in 2011.


An expanded version of this report appears at WSJ.com .

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