Published: Fri, June 01, 2018
Business | By Eloise Houston

Italy's populist parties say 'conditions met' for government

Italy's populist parties say 'conditions met' for government

Italy's two populist parties have revived their plans to form a coalition government and again put forward Giuseppe Conte as prime minister.

Fresh elections seemed like the most likely outcome, however, after it became clear Cottarelli's government would not pass a vote of confidence in parliament. But Cottarelli was not able to present a cabinet, and received no support from any of the major parties.

The coalition is not yet a done deal, and the on-again-off-again negotiations over the past three months since Italians went to the polls have given watchers cause for caution.

A formation of the new government will at least temporarily allay those concerns, because it will - for now - remove the threat that snap elections will be called later this summer, a prospect which anxious investors because it could have bolstered anti-EU parties.

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

Stock markets in Italy and globally had plunged and Italy's borrowing rates soared earlier in the week when it appeared Italy was heading to new elections after President Sergio Mattarella vetoed the prospective partners' first pick for economy minister, collapsing the proposed coalition.

Di Maio is expected to lead a powerful new post that will combine labour and industry portfolios, in a move that could mark big changes to labour and environmental policies, given the M5S's stated opposition to big industry.

Economy professor Giovanni Tria gets the economy ministry job instead of Savona, and Enzo Moavero Milanesi, a former European Union affairs minister in the technocratic government of Mario Monti, will be foreign minister. In recent opinion pieces, he denounced Germany's surplus as an indicator of the failure of the euro.

After the initial attempt to form a government failed, Mattarella picked Carlo Cottarelli as interim prime minister.

The row comes two days after the German commissioner for the European Union budget, Guenther Oettinger, was forced to apologize after comments suggesting Italian voters would be punished by markets for voting for eurosceptic populists caused an uproar in the country.

"Europe's difficulties are down to the elites who run it: they say they take care of the people but they only take care of themselves".

Two of Italy's political parties have agreed to form another coalition government to avert a snap election.

But on Thursday it was Juncker who was annoying the Italians, with reported remarks that Italians should do "more work".

However he defends himself against charges of being Europhobic, saying that he is simply criticising institutions that are failing the European people. A spokesperson for Juncker said his words had been taken out of context.

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