Italy’s New PM, Conte Begins Work

Presidente della Repubblica italiana Sergio Mattarella

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Rome - Italy's populist Five Star Movement and far-right League parties swept to power in a spectacular reversal of political fortunes that brings an end to three months of deadlock and opens the way to a period of friction with Europe.

But by Thursday night, 5-Star leader Luigi Di Maio and League leader Matteo Salvini found the compromise that earned them President Sergio Mattarella's blessing to form a government.

The new government is expected to be sworn late on Friday and after the ceremony, it 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.

Giuseppe Conte had been proposed for the role of Prime Minister, leading a coalition of the populist Five Star Movement (M5S) and regionalist party League.

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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.

Italy has finally formed a government, following weeks of political chaos as two parties failed to agree terms with President Sergio Mattarella.

Conte, a law professor plucked from relative obscurity to head an unlikely governing alliance of the anti-establishment 5-Star Movement and League, said the celebrations Saturday transcended all the tensions of recent days.

Italian prime minister-designate Giuseppe Conte got a taste of the expectations many Italians have for his revived team as he reported for work, when he was confronted by a group of laid-off workers protesting outside parliament. But Cottarelli was not able to present a cabinet, and received no support from any of the major parties.

Mattarella said the appointment of Savona would have disastrous consequences for Italy's economy and ability to attract foreign investment.

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On Friday, Savona was sworn in as the new European affairs minister.

"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.

But Mattarella objected to Conte's choice for the finance ministry, euroskeptic economist Paolo Savona, saying it would alarm investors and have unsafe consequences for Italy's outstanding government debt.

However on Wednesday Five Star leader Luigi Di Maio, who had called for Mattarella's impeachment following his rejection of Savona, offered an olive branch by proposing the controversial 81-year-old financier for another government post.

Tria has been critical of the European Union, but unlike Savona hasn't advocated abandoning the euro. "That means more work, less corruption, seriousness", Juncker said.

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However, investors revolted, sending Italian stocks plummeting and increasing the cost of borrowing to cover Italy's stubbornly high sovereign debt.

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