The left-wing Five Star Movement (M5S) and the right-wing Lega will put forward names to be the next prime minister. Giulio Sapelli, an economics professor, is supported by M5S while Lega is backing law professor Giuseppe Conte, according to Italian newspaper Corriere.
If they could have formal permission to form a government from Italian President Sergio Mattarella, Italy will have its first out-and-out populist right wing government since Mussolini was executed by partisans in 1945.
Matteo Salvini, the leader of the League, and M5S counterpart Luigi Di Maio, worked over the weekend in Milan on a policy document in which they are expected to take a tougher approach towards illegal immigration and the EU.
In line with their campaign pledges, the parties, which between them won more than 50% of the vote in the 4 March elections, have also reportedly reached agreement on introducing a flat tax as low as 15%, a universal basic income and dismantling a change to pensions in 2011 that increased the retirement age. They have also pledged to attempt to renegotiate European treaties.
Italy’s stock market has dropped a little further into the red, as traders in Milan brace to learn who their next prime minister might be.
