EU's Liberals rebuff Italy's 5-Star bid to join parliamentary group

By Gavin Jones and Julia Fioretti ROME/BRUSSELS (Reuters) - The Liberals in the European Parliament have turned down a request from the anti-establishment 5-Star Movement to join their group, putting Italy's second-largest party in an awkward position as it had already left its former partners. 5-Star's members had voted earlier on Monday to break their alliance with the anti-EU UK Independence Party in favour of the Alliance of Liberals and Democrats for Europe (ALDE), but ALDE declined, citing deep-seated incompatibilities. "There is insufficient common ground to proceed with the request of the Five Star Movement to join the ALDE Group," leader Guy Verhofstadt, a former Belgian prime minister, said in a statement. "There remain fundamental differences on key European issues." Political opponents in Italy seized on the failed overture to Verhofstadt, a keen federalist whose pro-EU views 5-Star has previously ridiculed, as a sign of the movement's incompetence. "If until yesterday 5-Star screamed against the euro and Europe, how could they join up with a group that has always taken the diametrically opposite position?" said Michele Bordo, a lawmaker from the ruling Democratic Party (PD). "The only problem here is the consistency of the 5-Star Movement." Some 78 percent of 5-Star's members who participated in an online vote on Monday backed the proposal by the party's founder Beppe Grillo to abandon UKIP and hook up with ALDE. The move prompted an angry reaction from UKIP founder Nigel Farage, who said Grillo had "joined the establishment". Grillo's blog, 5-Star's main mouthpiece, said "the establishment" had blocked its entry into the third largest group in the Brussels parliament. Verhofstadt had paved the way for its entry into ALDE but could not convince a majority of its 68 members. 5-Star said it would try to put together a new group called the Direct Democracy Movement in time for the next parliament in 2019, but gave no indication of where its members would go now. Italy's main opposition party rejects traditional left-right ideological labels and so has no natural home among the main political families in Brussels. Its policies include holding a referendum on membership of the euro zone, universal income support for the poor, tax cuts for small businesses, and clean energy. It attacks the Brussels establishment but does not want Italy to leave the EU. Grillo said on Sunday he had also approached the Greens about a possible alliance, but had been rebuffed. If ALDE had accepted 5-Star, the Italian group would have been seen as entering mainstream politics and moving away from the anti-establishment fringes, perhaps reassuring other EU capitals that have grown uneasy about its rising popularity. (Additional reporting by Francesco Guarascio in Brussels and Isla Binnie in Rome; Editing by Louise Ireland)