Fiscal highlights from the M5S/Lega...........>

ITALY: Fiscal highlights from the M5S/Lega government programme published last

night by Corriere, which appears to be bona fide, though fiscal impact vague:

- Request E250bln in debt to not count in debt-to-GDP ratio, by the logic that

securities held by the ECB should not count in the Growth and Stability Pact

calculation for EMU members.

- Approach to EU 3.0% of GDP fiscal deficit criteria is highlighted in red -

policy to to be reviewed by party leaders before finalising.

- Ending the Fornero pension reforms, creating `level 100` (pension if sum of

age and years of pension contribution = 100). New `citizen income`.

- Not-so-flat tax: two rates of 15% and 20%, no indication of income threshold,

no costing. Highlighted red, to be assessed by the party leaders.

- Calls for review European treaties. Nothing explicit on Euro exit but seeks

renegotiation of Italian contribution to EU budget.

- Bottom line is that from a markets perspective this platform is a step in the

right direction from the earlier leaked drafts and some of the campaign

rhetoric, but the direction of travel is unambiguously more eurosceptic.