Published: Fri, June 01, 2018
Worldwide | By Lisa Hogan

Italian president gives populist parties more time to propose cabinet

Italian president gives populist parties more time to propose cabinet

After the first coalition attempt failed, President Mattarella named former International Monetary Fund official Carlo Cottarelli to form a stop-gap government of experts to lead the country to elections no sooner than September.

League leader Matteo Salvini, who is surging in opinion polls, appeared to throw cold water on the notion that his party and 5-Star could try again to form a coalition.

But the newly constituted government, of the anti-establishment Five Star Movement and the anti-immigrant League, still left open the question of whether the reaction of financial markets to Italy's political chaos this week had chastened them, or whether it simply had led them to disguise their hostility as the price of admission into power.

In a televised address, Mr Mattarella said he had rejected the candidate, 81-year-old eurosceptic economist Paolo Savona, because he had threatened to pull Italy out of the euro zone.

Mr Savona, who was backed by 5-Star and the League, has also branded the EU's single currency a "German cage".

Italy has been in the throws of political turmoil for nearly three months after a March general election failed to deliver a clear victor.

President Sergio Mattarella called Conte at 21:00 Thursday to hand him a second government-formation mandate, after his first effort foundered over an anti-euro economy ministry pick.

"They've replaced a government with a majority with one that won't obtain one", Di Maio told supporters at a rally near Rome. The new government still needs to win a confidence vote in parliament, but at this stage that was a formality.

Any politicians agreeing to serve in the temporary government's Cabinet would have to abandon their current jobs and commit not to run in the upcoming election for positions that might only last a couple of months, Codogno noted.

Di Maio said on Wednesday he wants either a government made up of political figures, or elections, according to remarks cited by Ansa, refusing to back Cottarelli's proposed interim administration of technocrats.

Mattarella's veto and subsequent nomination of Cottarelli as caretaker prime minister sparked angry calls for the president's impeachment, since most lawmakers backed Savona.

On Monday, Salvini said in a radio interview he would seek parliamentary support from 5-Star to change the electoral law.

There were fears a new election could turn into a referendum on Italy's European Union membership after Mr Mattarella vetoed the populist parties' choice of an arch-Eurosceptic as finance minister.

"Perhaps we are finally there, after so many obstacles, attacks, threats and lies", Salvini rejoiced on Facebook.

Salvini cancelled his scheduled appointments in northern Italy to fly to Rome and was expected to have a private meeting with Di Maio, a political source said.

Italian stocks were trading higher as signs emerged of a compromise to avoid snap elections that could be dominated by the issue of euro membership, calming investors.

In the March election, M5S came with slightly over 32 percent of the vote.

Yields on 10 year Italian government bonds have fallen 7.4 basis points to 2.98 today, having peaked at 3.45 yesterday.

However, he added; "I'll go out on a limb and suggest there are a bunch of experienced political operatives in Europe and some neophytes in Italy who might just have got the shock of their lives on how quickly this situation developed and we'll see some backpedalling".

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