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Currency, United States Finance

Italy set for an anti-establishment government after roiling global markets

A populist coalition government will be sworn into power in Italy Friday, ending months of political uncertainty in the euro zone’s third-largest economy.

President Sergio Mattarella approved a patched up bid from Italy’s anti-establishment Five Star Movement (M5S) and right-wing Lega (League) party on Thursday evening, just days after a bitter feud roiled global financial markets.

“All the conditions have been fulfilled for a political, Five Star and Lega government,” Luigi Di Maio of M5S and Matteo Salvini of Lega, both the leaders of their respective parties, said in a joint statement following several hours of talks in central Rome.

Only days ago, Mattarella refused to accept an initial bid from Italy’s populist parties over concerns about an economy minister who had helped write a guide for withdrawing Italy from the euro zone. That move plunged the country back into crisis mode, amid fears a fresh election could be framed as a de facto referendum on Italy’s role in Europe.

However, on Thursday, M5S and Lega moved to revise their combined slate of ministers, reshuffling a controversial pick for economy minister to a somewhat less critical post.

The shake-up seemed to be enough to win approval from Italy’s head of state, who preferred an elected administration to the stop-gap alternative he had in reserve.

The coalition deal sees little-known law professor Giuseppe Conte become Italy’s prime minister-designate. Conte, who belongs to neither party and has not been elected, told reporters in a brief statement: “We will work with determination to improve the quality of life of all Italians.”

Conte is due to take over from Paolo Gentiloni, who has led a coalition cabinet for around two years. Italy’s new government is expected to be sworn in later on Friday.

Shortly after the ceremony, M5S and Lega will face confidence votes from both chambers of parliament — where they share a majority.

Italy has been without a government since an election in early March resulted in a hung parliament. M5S and Lega formed an unlikely pact in the weeks that followed, promising a sweeping crackdown on illegal immigration.

Italian stocks — which have been at the epicenter of the latest market turmoil — rose almost 3 percent Friday morning.

Source: cnbc
Italy set for an anti-establishment government after roiling global markets

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