Italy's League opens door to 5-Star deal

Gavin Jones and Claudia Cristoferi
AAP

The leader of Italy's eurosceptic League has said a government deal with the anti-system 5-Star Movement was possible after an inconclusive election, raising the prospect of two radical groups running the country.

The March 4 vote ended in gridlock, with 5-Star and the League emerging as the top two parties in parliament, but no bloc or group securing a majority to govern alone.

Italy's head of state is due to start consultations next month to try to end the stalemate in the euro zone's third largest economy, with the various parties positioning themselves for potentially fraught and lengthy negotiations.

"Barring the PD, everything is possible," League leader Matteo Salvini told reporters, referring to the centre-left Democratic Party (PD), which was defeated after a difficult five years in office.

The new parliament sits for the first time on March 23.

5-Star, born as a protest movement in 2009, long resisted any suggestion of forming alliances, but its leader Luigi Di Maio said on Wednesday that it now wants to talk to other parties to fix a common programme.

Salvini has adopted a much more hostile line towards the European Union than his coalition partner, four-time prime minister Silvio Berlusconi, a point that was underlined on Wednesday when he said the euro currency was not irreversible, prompting investors to dump Italian government bonds.

Ahead of the vote, all parties promised to cut taxes and raise spending, apparently at odds with pledges to also cut a public debt that is second only to Greece's in the euro zone as a proportion of GDP.

Salvini has promised not to abandon his partners, after Forza Italia's relegation to second place in the coalition prompted speculation the League could split off and join 5-Star.