Italy's exit from euro not priority for League party - senator

GETTYMatteo Salvini rejects EU's calls for a technocratic government in Italy

Berlusconi's sideways move unblocked a stall that had lasted for over two months, prompting Mattarella on Monday to give the deadlocked parties two options: either the naming of a "politically neutral" executive to steer the country through December 31, or a return to the voting booth this year.

Five Star and the League first discussed an alliance after inconclusive elections on March 4, but Mr Di Maio refused to hand a role to Silvio Berlusconi, the League's electoral ally, who is...

The talks were agreed by Sergio Mattarella, Italy's president, after the two leaders asked for more time to reach a deal and avert a caretaker administration and a fresh election.

To hammer out a common government program, top League and 5-Star members met on Thursday afternoon.

A beaming Di Maio said, "I cannot hide my joy that we can finally begin to take care of Italy's problems", in a Facebook video.

Rome: Italy's president has proposed a "neutral" government to lead the country until the end of the year after declaring there was no hope now for a workable political alliance and that Italy can't wait any longer for leadership.

The populist rivals are betting that they can break the political impasse by going back to the voters rather than cutting a deal with other parties.

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Berlusconi, 81, had been the stumbling block in earlier negotiations between the League and M5S, with the four-time ex-prime minister seen as a potent symbol of the corruption they have campaigned against.

The M5S delegation said after the talks that there had been "very many convergences" with the League, "beyond expectations", including on the flat tax and immigration as well as "total harmony" on scrapping the 2011 Fornero pension law.

The president added that elections over the summer would be impractical because so many Italians would be on vacation, and risky in autumn because it could jeopardise approval of the annual budget in parliament.

The 5-Stars and the League rejected his proposal, warning they would rather go to a new election as early as July than turn over the government to "neutral" technocrats when Italians clearly voted for change. "Let the parties decide of their own free will if they should give full powers to a government... or else new elections in the month of July or the autumn".

Matteo Salvini with his coalition partners at the presidential palace.

The scandal-ridden former prime minister said on Wednesday that he would not oppose an alliance between the League and Five Star, removing the main obstacle to the a Five Star-League tie-up.

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