Italy's 5-Star readies coalition proposals to other parties

By Gavin Jones

ROME (Reuters) - The leader of Italy's anti-establishment 5-Star Movement said on Friday his party was preparing economic policy proposals for other parties as a way of finding common ground to form a government after Sunday's inconclusive election.

5-Star comfortably emerged as the leading party at the election but does not have enough seats to govern on its own.

Its leader Luigi Di Maio says the president should give 5-Star the right to try to form a government, but the right-wing coalition parties, whose combined total was higher, say the job should fall to them.

In an interview in the daily Corriere della Sera, Di Maio said his party would soon present proposals to be incorporated in the outgoing government's multi-year economic plan, which must be presented by April 10.

"We want to move quickly ... if the other parties want to propose other measures that will help people then we are ready to discuss them," Di Maio said.

Later in the day, Danilo Toninelli, who will be 5-Star's Senate floor leader once parliament opens on March 23, outlined the issues he said could be the basis for an agreement.

"If we propose issues like universal income, lower taxes and an anti-corruption law, which are also present in the programmes of other political forces, they owe us an answer," Toninelli told reporters.

Matteo Salvini, leader of the far-right League and the conservative coalition's candidate for prime minister, said he would issue his own economic plans for Italy and showed no sign of toning down his tough eurosceptic stance.

NOT WHAT BRUSSELS WANTS

"Soon we will make a budget proposal ... and it will be the opposite of what Brussels asked for," he told reporters after meeting with the League's lawmakers in Milan.

Salvini, whose party made big gains to emerge as the largest in the right-wing bloc, said he was ready to discuss with all party leaders how to form a government with a limited mandate of reforms to the economy and the electoral law.

The prospects for coalition building have dominated the Italian political debate since the election, with most commentators focusing on the possibility of a tie-up between 5-Star and the centre-left Democratic Party (PD).

"That is what the newspapers write, but I have always said I will discuss with all the parties, with no exception," said Di Maio, 31, who was elected as 5-Star's leader in September.

For years after its foundation in 2009, 5-Star said it would not form coalitions with mainstream parties.

But as the prospects of a hung parliament increased ahead of the election, Di Maio nuanced that stance, saying he would be willing to discuss a common policy platform with the other parties but not negotiate over government posts.

All the main parties campaigned on pledges to cut taxes, hike spending and raise the budget deficit from levels agreed with the EU, while simultaneously promising to cut debt.

"NO PERSONAL AMBITIONS"

The centre-right is hoping to get the backing of the defeated PD in its own bid to form a government, one of its senior parliamentarians said in another interview in Corriere della Sera on Friday.

"We are trying to understand if the PD will be willing to give us some sort of support," said Renato Brunetta, lower house leader of Silvio Berlusconi's Forza Italia (Go Italy!) party.

Brunetta reiterated that the prime minister should come from the centre-right but said it may not necessarily be Salvini.

"The candidate (now) is Salvini, but it could also be someone else that he puts forward, if that is what we agree together," he said.

Salvini has so far given no explicit indication that he may stand aside for another, more moderate centre-right figure. But he did say on Friday that he had "no personal ambitions".

President Sergio Mattarella will not begin formal consultations with parties over government formation until after March 23, when parliament will elect the speakers of the two houses.

Mattarella hopes to broker a deal that will avoid the need for a fresh election, which would risk being no more conclusive than the last one, sources close to the president have said.

Di Maio told Corriere the other parties would "pay a high price for their irresponsibility" if they refused to negotiate with 5-Star, making new elections necessary. 5-Star won 32 percent of the vote on Sunday, almost twice as much as the second largest party.

He said that, if there were a return to the polls, "we would have nothing to lose".

(Additional reporting by Sara Rossi in MILAN, and Steve Scherer and Massimiliano Di Giorgio in ROME, Editing by Catherine Evans and Kevin Liffey)