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Paragone left the anti-establishment 5-Star Movement soon after it formed a government with the pro-European Democratic Party (PD) last year, moderating its critical attitude towards Brussels institutions.
Even Matteo Salvini's right-wing League, until recently the main rallying point for eurosceptics, has softened its line against Brussels and the euro in a bid to gain respectability.
The timing of Paragone's move looks questionable, coming as the EU reached a deal on Tuesday to launch an economic Recovery Fund worth €750 billion, which the bloc's supporters say shows its renewed cohesion and vision.
Prime Minister Giuseppe Conte said earlier on Tuesday that 28 percent of the fund would be for Italy in a mix of grants and loans that could "change the face of the country".
"The others want to change Europe, we want to quit," Paragone said after the EU deal was struck.
The European issue has dominated Italian politics in recent years, with eurosceptics blaming the EU for the country's chronic economic stagnation and its difficulties in handling migrant arrivals from Africa.
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A Eurobarometer survey in 1998 showed 69 percent of Italians supported EU membership, while in 2002, after the introduction of euro notes and coins, Italy was the second-most pro-euro nation after Luxembourg, with 79 percent expressing a positive opinion.
A survey by pollster SWG at the end of May showed just 39 percent of Italians said they trusted the EU.
(Writer & Editor: Gavin Jones and Alison Williams)
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