Populist govt sworn in after coalition deal

Snap Italy poll off after last-gasp move

ROME: An anti-austerity government was due to be sworn in yesterday after a last-ditch coalition deal was hammered out to end months of political deadlock, narrowly avoiding snap elections in the eurozone’s third largest economy.

Italian financial markets jumped on the announcement of the new government formed by the anti-establishment Five Star Movement and nationalist League, which was due to take the oath at the presidential palace in the afternoon.

After weeks of political drama that had at one stage seemed certain to lead to new elections, Italian President Sergio Mattarella named academic Giuseppe Conte as prime minister for the second time in less than a fortnight and approved the political novice’s revised cabinet.

Italian media reported that the lineup will face a vote of confidence on Monday or Tuesday in both houses of parliament, which it is almost certain to win thanks to Five

Star and the League’s combined majority in parliament.

“We will work to realise the political objectives included in the government contract. We will work hard to improve the quality of life for all Italians,” Mr Conte said after announcing his government team late on Thursday.

The coalition plans to revive Italy’s sluggish economy by rejecting austerity and increasing spending, and also wants to renegotiate EU treaties and review the bloc’s economic governance.

Its ambitious economic proposals, which include a monthly basic income for Italy’s poorest and a two tier “flat” tax, have worried Brussels and financial markets given Italy’s massive US$2.7 trillion debt.

European powerhouse Germany vowed yesterday an “open” stance towards the new government, while European Commission chief Jean-Claude Juncker told Italians they needed to “do more work, less corruption” and stop blaming the EU for their woes.

The coalition deal turns the page on months of political turmoil following an inconclusive election in March which had raised jitters among Italy’s European partners.

Mr Mattarella had triggered a fresh crisis at the weekend when he vetoed eurosceptic Paolo Savona as economy minister in a previously proposed Five Star-League government.

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

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

That brought League leader Matteo Salvini back to the table, and after frantic talks in Rome on Thursday the two parties emerged with a new 18-minister cabinet, featuring Mr Savona in charge of EU affairs, that was quickly accepted by Mr Mattarella.

Mr Conte, 53, who has been criticised as being a “Mr Nobody”, named hardline anti-migrant Mr Salvini as interior minister, while Mr Di Maio will become minister for economic development. Both will also be deputy prime ministers.

Mr Salvini has long wanted his new post, from where he will aim to stop “the business” of migration, cracking down on people-smuggling networks and speed up expulsions of illegal immigrants.

“I would like us to have a country with a little less tax and a little more security, a few more jobs and a few less illegal immigrants,” he said.