Foreign media took a pessimistic view of political developments in Italy on Tuesday as the populist Five Star Movement (M5S) and right-wing League resumed talks on the possible formation of a new government after getting more time for negotiations from President Sergio Mattarella on Monday.
The Financial Times focused on the "odd couple" that risks splitting up over Europe, examining the differences between M5S leader Luigi Di Maio and League chief Matteo Salvini.
The breaking point could be their respective attitudes towards Brussels, the paper said.
However, "with European elections around the corner in 2019, neither Mr Salvini nor Mr Di Maio will want to be caught off guard by making too many concessions to their partner. But for now, the new populist duo of Italian politics was savouring the taste of power," concluded the Financial Times. French progressive newspaper Libération opened with "Five Star-League, the contract of mistrust" highlighting the almost insurmountable differences in the programmes and political priorities of the two parties. Further, once the 'contract' has been drawn up they "will have to agree on the name of the future premier and on the list of ministers," the paper added, pointing out the Mattarella will not agree to being a "mere notary". German conservative paper Die Welt was even more pessimistic.
"A populist government in Italy would be the sixth blow to the foundations" of the EU after it failed to give itself a constitution, the crisis in the Eurozone, failure to adequately handle the refugee crisis, Brexit and rebellion by the so-called Visegrad countries. "(This blow) could be fatal," the paper added.
London's Daily Telegraph bucked the trend, taking a more optimistic line. "Investors should back Italy's fresh thinking," ran a headline on Tuesday. "As a strange, populist coalition of the League and the Five Star Movement prepares to take power in Italy, we will hear a lot about how the markets are about to punish the country for its recklessness and how investors will avoid it like the plague. (...) But hold on. The conventional wisdom may well turn out to be 100pc wrong," the paper wrote. "Because while some of the coalition's ideas are bonkers, some are also pretty good; and because populist governments are so far delivering very good returns for investors," it continued. One good proposal, said the paper, is the single flat tax of 15%. "If it went ahead, that would be one of the boldest experiments in tax reform that any major economy has ever tried," the Telegraph concluded.
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