Italy's 5-Star chief inflexible in dealing for new coalition Italy's populist 5-Star chief isn't budging in his demands in dealings for a new government aimed at keeping right-wing Matteo Salvini from power

ROME -- Just how dicey prospects are for two rival parties to team up in a new Italian government to shut Matteo Salvini and his hard-nationalist forces out of power became painfully clear Friday when the leader of the 5-Star Movement refused to budge in his populist party's policy demands.

Financial markets immediately reacted nervously when Luigi Di Maio declared: "Either our policy points or better to go to a vote" to settle Italy's weekslong political crisis. The benchmark spread between Italian 10-year treasury bonds and German ones rose, to 176. Amid the jitters, Milan's stock market also ended the day, down by 0.35%.

The last few days had seen the markets reassured, after the 5-Stars agreed to try to form another government headed by Giuseppe Conte, but this time with their long bitter foes, the center-left Democratic Party.

Conte's 14-month coalition collapsed this month after Salvini pulled his right-wing League's support for the government, in which his and Di Maio's forces were partners. Salvini hoped his pullout would have triggered early elections to bring him to power, but the 5-Star-Democratic effort to form a new government blocked him.

But the 5-Stars' relations with the Democrats were looking as thorny as their ultimately-doomed dealings with the League.

"Either we get agreement on the points in our program or we don't go forward" in forming a new government, Di Maio said after meeting with Conte.

A top Democratic Party official, Andrea Orlando, tweeted that Di Maio's ultimatum was "incomprehensible. Did he change his mind?"

Di Maio didn't explain, but news reports have said he is insisting on being deputy premier but the Democrats won't let him.

Conte didn't immediately react to Di Maio's challenge.

But the Democrats' leader, Nicola Zingaretti, snapped back.

"Clear pacts, long friendship. We're seriously working to give Italy a new government, with a pro-Europe" tilt, among other policies, Zingaretti tweeted. "But enough with these unacceptable ultimatums, or we won't go anywhere."

Emerging as one of the potentially unbridgeable gaps between the 5-Stars and the Democrats was migrant policy. The crackdown implemented by Conte's government included fines of 1 million euros (more than $1.1 million) for captains of charity ships which rescue migrants in the Mediterranean and bring them to Italian ports in defiance of Salvini-championed bans on docking.

"We contend it doesn't make any sense to talk about modifying the security decrees" against migrants, Di Maio said.

"According to Di Maio, the rationale of the security decrees don't need to be revised," a Democratic leader, Matteo Orfini wrote on Facebook. "According to me, they should be abrogated. I'd like to hope that's also the position of the PD (Democratic Party)."

The previous Democrat-led government had already started making it harder for the humanitarian rescue ships to operate. Salvini, who along with many of his supporters blame migrants for crime, came down even harder.

A lawyer with no political experience before becoming premier in June 2014, Conte's sympathies lie with the 5-Stars.

If Conte succeeds in stitching together of coalition rival parties which are each squabbling internally, he then needs to marshal enough support in Parliament to win mandatory confidence votes in each chamber.

Meanwhile, Italians got more grim news about their economy. The national statistics bureau ISTAT said 2019's second quarter saw zero economic growth.