Italy's President Appoints a Technocrat, and Moves from Quiet to Contentious

Italy's President Appoints a Technocrat, and Moves from Quiet to Contentious

There is now a real argument between the president and the populists about Italy's position in the European Union, he adds.

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

Italy has been in political crisis since the weekend when the country's 75-year-old president, Sergio Mattarella, refused to accept the nomination of Paolo Savona, a Eurosceptic, for the role of finance minister.

Within 24 hours, however, Cottarelli was suggesting Italy would be better off with a prime minister who was a politician and favored by the two major parties. Several rounds of post-election talks with part leaders collapsed amid a mesh of seemingly irreconcilable demands.

Five Star had been trying to form a government with the right-wing League.

The euro and Italian stocks both rose in early morning trading Monday, due to the latest twist in Italy's tumultuous political saga. Investors are anxious that euroskeptic parties could form a future government that would abandon the euro, or commit to public spending that would see Italy become the next Greece. The populists had wanted to install Paolo Savona, a controversial Eurosceptic finance minister, who had in the past described the single currency as a "German cage" and an instrument of German domination in Europe.

In another development, far-right Brothers of Italy leader Giorgia Meloni signaled she would support a populist government, reversing her previous position and giving the potential administration more breathing room to pass confidence votes in parliament.

Cottarelli said Italy would face new elections "after August" if parliament did not endorse his team, a near certainty given that Five Star and the League together hold a majority.

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The leaders of Five Star and the League, Luigi Di Maio and Matteo Salvini, denounced the veto, decrying what they called meddling by Germany, ratings agencies and financial lobbies.

The Five Star Movement and the League, the parties who were thwarted in their bid to give Italy its first populist government, have vowed to give Mr Cottarelli the thumbs down in required confidence votes in Parliament.

Salvini said his party would rather not impede the birth of a caretaker cabinet led by Cottarelli to manage current affairs - including the 2019 budget - before snap elections in autumn. "I don't know how we get away from that now, given the scale of the financial implications", Kit Juckes, chief foreign exchange strategist at Societe Generale, told the Wall Street Journal.

The new prime minister is known as "Mr. Scissors" for his cuts to public spending in Italy.

"Let's find someone of the same character and freedom as the excellent Savona, and professor Savona remains in the cabinet, in another role as minister", Di Maio said in a Facebook Live video.

Even before the fracas over Savona's appointment, the marriage of convenience between Di Maio and Salvini had looked tenuous since the 4 March election.

Salvini canceled his scheduled appointments in northern Italy to fly to Rome and was expected to have a private meeting with Di Maio, a political source said.

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