Can Di Maio and Salvini still form a coalition government?

Can Di Maio and Salvini still form a coalition government?

Can Di Maio and Salvini still form a coalition government?

Italy searched for a last-minute exit from nearly three months of political turmoil on Wednesday, with its biggest party looking to make a renewed attempt to form a coalition government with the right-wing League, a source said.

The two big winners in that election - Five Star and the League - attempted to join forces but abandoned efforts after the president vetoed their choice of finance minister.

Sworn in Friday, the next step for the new government is confidence votes in Parliament, which will be called early next week.

Italy's populist parties have been given a green light to form a new coalition government, ending months of political and financial instability.

League leader Matteo Salvini said he would be willing to revisit the proposed 5-Star-League agreement that had formed the basis of their proposed alliance.

M5S leader Luigi Di Maio and League leader Matteo Salvini were sworn in as Economic Development and Labour Minister and Interior Minister respectively.

The two enraged parties abandoned their joint bid for power, and on Monday Mattarella asked ex-IMF economist Carlo Cottarelli to form a caretaker government created to take Italy to what looked like probable autumn elections.

The two populist party leaders are both deputy prime ministers as well as key ministers in the new government.

The anti-immigrant and anti-European Union League and the maverick 5-Star Movement rode a wave of popular discontent into office.

Salvini, who has been blowing hot and cold on reviving the populist government project, told a rally in Genoa in northern Italy: "If it's wanted, there's a government contract with a team which is ready".

But even with uncertainty remaining, Italy's government bond yields fell from multi-year highs on Wednesday and a smooth bond auction brought a degree of calm to a battered market.

The prospect of renewed elections has shaken financial markets with the value of the euro against the dollar hitting a 10-month low on Tuesday.

The bid failed after Mattarella last Sunday vetoed the proposed economy minister, Paolo Savona, who had expressed doubts about whether Italy should stay in the eurozone.

In his place at the economy ministry is Giovanni Tria, a mainstream economist at Rome University who is considered close to the Forza Italia party of ex-Premier Silvio Berlusconi.

About one hour before Conte was summoned on Thursday, former International Monetary Fund official Carlo Cottarelli had returned to the head of state his mandate to form a caretaker cabinet.

"The populist and right-wing government has a program that's risky for the country and the events of recent days confirm our longstanding concerns", said Maurizio Martina, a leader of the Democratic Party, which will now leave government for the opposition.

But there are also reports a snap election might be called, or that two populist parties could try again to form an administration.

Equity indexes around the world fell after the United States said it would impose tariffs on aluminum and steel imports from Canada, Mexico and the European Union and Washington's allies took steps to retaliate against USA goods. "That means more work, less corruption", he said.

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