Country Risk

Lega-M5S coalition to reverse labour reforms, unlikely to resolve productivity gap or serve full term in office

22 May 2018


Over the past weekend the anti-establishment Five Star Movement (Movimento Cinque Stelle: M5S) and the far-right League (Lega) consulted with their supporters online and in city centres nationwide and received overwhelming support for their new coalition and political programme.

The two parties subsequently nominated Giuseppe Conte, a university professor and political neophyte, as prime minister; Conte’s premiership now only awaits President Mattarella’s approval and a vote of confidence in parliament. On 22 May, Italian 10-year bond yields rose to 2.42%, a 14-month high in response to the coalition’s spending plans, which combine tax cuts with increased welfare spending, threatening to breach EU fiscal rules (see Italy: 18 May 2018: League-M5S alliance poised to end Italian political gridlock but undermine closer fiscal union for Eurozone).

Want to read more? For analysis on this article and access to all our insight content, please enquire about our subscription options at

(149 of 367 words)