Italy names interim Prime Minister Carlo Cottarelli as government collapses

Italy names interim Prime Minister Carlo Cottarelli as government collapses

Italy names interim Prime Minister Carlo Cottarelli as government collapses

After weeks of political drama that had at one stage seemed certain to lead to new elections, President Sergio Mattarella named political novice Giuseppe Conte as prime minister for the second time in less than a fortnight and approved his revised cabinet.

After being sworn in, the ministers will face confidence votes in both chambers of parliament, where the M5S and the League have a majority.

Italy's populist parties on Thursday agreed to form a coalition government, almost three months after an inconclusive March 4 general election.

"All the conditions have been fulfilled for a political, 5-Star and League government", 5-Star chief Luigi Di Maio and League leader Matteo Salvini said in a joint statement after several hours of talks in central Rome.

Mattarella then proposed Carlo Cottarelli, a non-political former International Monetary Fund official, to form a technocrat government to lead the country to new elections.

Italy's president has sworn in western Europe's first populist government - a mix of anti-establishment and right-wing ministers who have promised an "Italy first" agenda which has has alarmed Europe's political establishment.

In Rome's gilded Quirinale Palace, President Sergio Mattarella swore in 18 new ministers including anti-establishment figures, right-wingers and some technocrats.

Mattarella had vetoed the 5-Star-League's first proposed candidate for economy minister because of his euroskeptic views. In a Facebook post featuring a photo of the Five Star ministers, he said: "There are a lot of us, and we're ready to launch a government of change to improve the quality of life for all Italians".

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Still, efforts to end three months of political turmoil in Italy were the main focus in early trade, pushing peripheral euro zone bond yields down for a third day in a row.

Mr Conte was destined to become prime minister last week before Whitlam-like dismissal crisis threatened to derail his prime ministership before it had begun.

The two leaders, Luigi Di Maio of the 5-Stars and Matteo Salvini of the League, announced after meeting at the parliament that they had reached an agreement to form a political government — an outcome that avoids an interim, technical government and a swift return to the polls.

"The immigration question remains a hot-button issue, even if the number of new arrivals has fallen", said Salvini, an ally of French far-right leader Marine Le Pen.

In the new Cabinet, Savona heads the Ministry of Foreign and European Affairs, while the economy ministry goes to Giovanni Tria, a mainstream economist at the University of Rome.

Tensions have also risen between the two parties and the President, peaking as Di Maio called for Mattarella's impeachment earlier this week following his rejection of Conte's choice of finance minister.

Mattarella then asked pro-austerity economist Carlo Cottarelli to form a caretaker government.

However, investors' focus switched to Spain where the prime minister is set to be toppled.

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