Italy closes in on coalition as Berlusconi steps aside

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Italy moved closer to forming a government on Wednesday – hours before the president was expected to nominate his pick to lead a "neutral" administration – when four-time premier Silvio Berlusconi agreed to step back from efforts to build a coalition.

The populist Five Star Movement and the far-right League will now hold conversations over a candidate for prime minister, terms of an alliance and program for government.

Who are the possible partners?

Five Star Movement: Five Star, led by Luigi Di Maio but founded by comedian Beppe Grillo, is anti-establishment. It has promised direct democracy online, a 780-euro monthly wage to the unemployed, the repeal of hundreds of laws and closer ties with Russia.

League: The League, led by Matteo Salvini, is on the far-right of the political spectrum. It is firmly anti-immigration, is opposed to Italy's membership of the eurozone, has promised a 15 percent flat tax and wants to reopen brothels.

"The Five Star Movement and the League have informed the president that they are in talks to try to come to a possible government accord and that they need 24 hours to develop this initiative," said a statement from the presidential palace.

If the parties cannot reach an agreement, President Sergio Mattarella is likely to press ahead with his plan to nominate a prime minister to lead a "neutral" government.

Berlusconi gives green light

Berlusconi signaled late on Wednesday his Forza Italia party would not "impose vetoes or pre-conditions” on a possible coalition deal between the two parties. He added that he would not support a parliamentary vote of confidence in a Five Star-League government, but would back it on a policy-by-policy basis.

Five Star leader Luigi Di Maio had said that he could not countenance a deal with the League unless it abandoned Berlusconi, whose Forza Italia party it had aligned with.

The League's Matteo Salvini and Forza Italia's Silvio Berlusconi in Rome on April 19, 2018. /VCG Photo

According to Italian media, League leader Matteo Salvini's main political allies had been exerting strong pressure on Berlusconi to give his approval to a Five Star-League government, while the Italian tycoon's own Forza Italia party remains deeply divided on the issue.

Two-month deadlock broken?

Italy has been locked in a political impasse since the March 4 election failed to produce a clear winner.

A right-wing coalition led by the nationalist League won the most seats at the polls while Five Star became the biggest single party, but neither obtained enough seats for a majority.

Five Star Movement leader Luigi Di Maio in Rome, May 7, 2018. /VCG Photo

"We are going to sit down at the table and begin to talk about the issues for the country. Then we will talk about names," Di Maio told the Italian press on Wednesday.

Salvini said in a statement that "we still have to work on the program, on dates, on the team and the things need doing... either we reach a conclusion, or we return to the voters."

Neutral government back-up?

After three failed rounds of consultations thus far, Italy had looked to be heading either for a caretaker government, chosen by the president, or fresh elections as early as July.

It had been widely expected that Mattarella would nominate his pick for prime minister to lead a "neutral" government on Wednesday.

However, 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.

For the past two months the two parties have been scrambling to reach an accord for a coalition government but have repeatedly hit a wall over the League's coalition partner Berlusconi – who is himself barred from office.

(With input from agencies)

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