Italy’s anti-establishment leaders meet to try to avert elections

Italy’s anti-establishment leaders meet to try to avert elections

Italy's president gave populist politicians another chance Wednesday to try to form a coalition government after his naming of an interim leader roiled global markets that feared a new election would amount to a referendum on the euro.

After the president turned to Cottarelli to form a neutral government that would lead Italy until an early election was held, stock markets plunged Tuesday in both Europe's third-largest economy and around the world.

"I asked for the (economy) ministry an authoritative person from the parliamentary majority who is consistent with the government programme. who isn't seen as a supporter of a line that could probably, or even inevitably, provoke Italy's exit from the euro", Mattarella said.

Sources from the presidential palace suggest a swearing-in ceremony for the new government could take place as early as Friday, with a vote of confidence in parliament following on Monday.

"Good luck to anyone" who next gets tapped by Mattarella to be premier-designate, Giuseppe Conte, a law professor at the University of Florence, told reporter.

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"They've replaced a government with a majority with one that won't obtain one", Di Maio told supporters at a rally near Rome.

"We may now be in for an extended period of heightened uncertainty ahead of fresh elections" in Italy, Ray Attrill, head of foreign exchange strategy at National Australia Bank in Sydney, said in a note.

Political paralysis and economic crises have led to a succession of technocratic governments running the country and kicking the can down the road.

Mattarella then turned to former International Monetary Fund official Carlo Cottarelli to form a neutral government of technocrats to lead Italy until early elections.

The president said Conte refused to support "any other solution" and then, faced with Mattarella's refusal to approve the choice of Savona, gave up his mandate to be prime minister.

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The president, who appoints the premier and ministers in Italy, had opposed the populists' choice of a eurosceptic economics minister.

The leaders of the right-wing League and the 5-Star Movement patched up their alliance after agreeing to substitute a eurosceptic they had initially proposed as economy minister, a nomination that had been rejected by the head of state.

"Maybe finally we have made it, after so many obstacles, attacks, threats and lies", Salvini said on Facebook shortly after the deal was announced. The 5-Stars, by contrast, polled 32%. Italy's 2-year government bond yield, which has been the focus of a recent selloff, was down as much as 95 basis points at 1.40 percent.

Di Maio was said to be wary about having another far-rightist as well as Salvini as his partner, since polls show the M5S has been bleeding voters it gained from the centre-left Democratic Party (PD) on March 4 because of the possible new government's rightward drift.

However, in an apparent reference to Di Maio's plan he added an analogy between ministers and footballers: "If someone is a goalkeeper he has to play as goalkeeper, if someone is a striker he has to play as a striker". They also want to lift sanctions against Russian Federation and for Italy to move closer to its president, Vladimir Putin, who once said he did not need to meddle in the Italian elections because it was all going his way.

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The President and Prime Minister-designate, however, have chose to maintain the current situation and not rush things out until there's a possibility of holding a fresh election to form a government by the end of the year.

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