ROME – Italian President Sergio Mattarella was awaiting a final version, on Thursday, of the radical M5S-League contract, hammered out by the two parties as the stock market and spread were rocked for a second day, alarmed by the maverick foreign policies being mooted by the populist parties, political sources said.

 Anti-establishment Five Star leader, Luigi Di Maio, announced that the conclusion of the “government of change” contract should be reached on Thursday evening, following his face-to-face meeting with anti-migrant League chief, Matteo Salvini.

 As the M5S-League executive nears completion, Di Maio admitted that the parties were “still reasoning” on the stagnant issue of the country’s next Prime Minister.

 Political analysts indicate that the position appears to be leaning towards a Five Star party member, whilst Salvini becomes increasingly prepared to accept a role as Interior Minister.

 Yet, the protracted discussions continue to intensify the strains on the Milan stock exchange, which slipped two percent on Thursday, as investors become increasingly spooked by M5S-League foreign policy.

 The rise in the Italian spread was largely triggered by the M5S-League leaked draft on Wednesday, which incorporated a request for the European Central Bank to write off 250 billion euros worth of Italian debt.

 Speculation also piled up on a renovated Italian openness to Russia further disturbing the Italian stock market.

 Through the lifting of sanctions, allegedly sought by the two nonconformist parties, diverting from the EU and NATO strategy, Russia would be perceived as an economic and commercial partner instead of a global threat.

 However, US Ambassador to Italy, Lewis Eisenberg, appealed for government discussions to tread cautiously when contemplating alterations to what is a delicate international issue.

 Instead Eisenberg called for sanctions on Russia to be renewed, stressing that “they do not damage the Italian economy.”

 As the government contract approaches a conclusion this evening, critics have lambasted the “irresponsible” policies proposed by the potential M5S-League coalition, reiterating that they would entangle a breach of EU budget rules.

 European Commission Vice President, Valdis Dombrovskis, was the latest to weigh in on the debate, calling for Di Maio and Salvini to carefully manage the trajectory of Italian accounts.

 “I don't comment in the policies of parties or the processes of forming governments, but … it is important to abide by budget discipline and, especially for Italy, to continue reduce the deficit and debt because these are risk factors,” Dombrovskis told the European Parliament.

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