Italy establishes populist government led by Giuseppe Conte

03 June, 2018, 18:02 | Author: Kim Reid
  • GETTYProfessor Paolo Savona was Lega's choice for the post of Minister of the Economy

After meeting President Mattarella, Mr Conte confirmed reports that the new candidate for the key economy minister post would be economics professor Giovanni Tria.

Conte was summoned to the Quirinale, Italy's presidential palace, Thursday evening, and his appointment announced shortly afterward.

"We will work intensely to realize the political goals of our agreement, and we will work with determination to improve the lives of all Italians", Conte said after reading the list of confirmed ministers.

In his remarks to supporters, Salvini pledged to make sending migrants back to their home countries a priority.

Following the searing-in ceremony, the new government headed to the prime minister's office for the hand-over ceremony.

Italy's caretaker prime minister Carlo Cottarelli met with the president on Wednesday morning amid huge political uncertainty.

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It was a reference to European Union officials, who have made clear in recent days their concerns - in occasionally undiplomatic terms - about Italy's euroskeptic direction.

The League has also faced widespread criticism for xenophobic, anti-immigrant policies reminiscent of those forwarded by far-right parties across Europe, such as Germany's AfD and the National Front in France.

Five Star leader Luigi Di Maio is minister for economic development and both he and Salvini will be deputy prime ministers.

Lorenzo Codogno, a former Treasury official and economic analyst, said he predicts "trench warfare" between the government and Mattarella "on matters related to Europe and the fiscal stance".

The new foreign minister is very close to the European Union, so surely they will not take drastic steps following the formation of the new government.

Enzo Moavero Milanesi, director of the School of Law at LUISS University in Rome, was sworn in as Foreign Affairs Minister.

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Italy's 2-year government bond yield, which has been the focus of a recent selloff, was down as much as 95 basis points at 1.40 percent.

Its ambitious economic proposals - which include a monthly basic income for Italy's poorest and a two tier "flat" tax - have anxious Brussels and financial markets given Italy's massive 2.3 trillion euro ($2.7 trillion) debt.

As coalition attempts remained in deadlock, calls were made to appoint a technocratic interim government until fresh elections could be held early next year.

If a coalition can not be formed, the country will again hold elections, with the president having to dissolve parliament and host a vote as early as July 29, if most of the major parties have their way. Savona, an 81-year-old economist, had said previously that Italy should have a contingency plan to abandon the euro.

Instead they promised a spending and tax-cutting binge that has rattled investors and could contain the seeds of a new European crisis.

But Salvini, who is surging in opinion polls, appeared to throw cold water on the notion that his party and 5-Star could try again to take power, saying Italy should return to an election as soon as possible. The anti-establishment Five Star Movement, together with far-right League won approximately 50% of the popular vote, but failed to secure the majority needed to win.

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The Cabinet also includes defense attorney Giulia Bongiorno as the new minister for public administration. The Five Star movement rejected accusations that Conte embellished his qualifications. "That means more work, less corruption", he said.

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