Five Star vs League: Italy's Populists Thrash Out a Policy Plan

(Bloomberg) -- Italy’s two main populist parties are trying to forge a governing alliance after former premier Silvio Berlusconi dropped his opposition. The euroskeptic League’s Matteo Salvini and Luigi Di Maio of Five Star meet Thursday with a possible joint policy program and government posts on the agenda.

Here’s a look at some of the issues where they agree, and some they still need to smooth out:

Taxes

  • The League’s major promise is a flat tax of 15 percent to help businesses. Five Star is opposed to measures favoring the wealthier parts of the country and wants a gradual reform of tax brackets
  • Both say they want to help the middle class and taxes should be more “fair”
  • Both oppose further increases in sales tax which would kick-in if the government is unable to lower its deficit in line with previously agreed EU commitments
  • And both want multinationals and internet giants to pay more -- a stance that will bring them into line with France’s Emmanuel Macron

Citizen’s Income

  • This is a key issue for Five Star. The League is opposed because of the cost. And they say it’s just handouts to people who should be helping themselves
  • If the League gives up on an all-out flat tax, Five Star may cede ground on a citizen’s income in favor of other programs that help poorer families

Immigration

  • Both parties want to limit immigration and expel those who arrived illegally, though the League has long taken a more virulent stand than Five Star.

Pension Reform

  • Both parties want to lower the retirement age to 65, and even further for people who’ve worked many years
  • Economists say that would strain Italy’s public finances and lead to conflict with the EU

Justice System

  • Both parties agree that the country’s slow-moving judicial system needs to be reformed with harsher penalties for white collar crime and the mafia. They also want faster sentencing

Russia

  • Both parties have taken a softer line than most EU partners toward Vladimir Putin
  • The League wants dialogue with Moscow and an end to sanctions; Five Star used to be closer to Moscow but has become more supportive toward NATO and Europe

The EU

  • In the past, both parties have blamed the EU for many of the country’s problems and floated the possibility of leaving
  • Today, both say they are willing to work with Brussels and they’ve dropped demands for a referendum on leaving. Five Star has softened its opposition to the euro too

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