Italian national pride on display as political crisis ends

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.

The Italian government formed by newly-appointed Prime Minister Giuseppe Conte was officially sworn at the presidential palace on Friday.

Italy's new prime minister Giuseppe Conte mostly kept quiet on his full first day in office Saturday, while his two powerful deputies took centre stage in setting the tone of the populist government's policy.

The handover of power follows an inconclusive March election and months of political turmoil which had spooked global financial markets and spread unease among Italy's European Union partners.

His request came as the biggest party to emerge out of the March election, the 5-Star Movement, made a last-ditch attempt to form a coalition government with Mr Salvini's party.

M5S leader Luigi Di Maio and Mr Salvini said in a brief joint statement: "All the conditions have been met for a M5S-League government".

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.

Conte's Cabinet was sworn in Friday after a last-minute deal averted the threat of a new election that had sent stock markets around the world tumbling.

"It's the celebration for all of us, of our republic", he said.

The prospect of renewed elections has shaken financial markets with the value of the euro against the dollar hitting a 10-month low on Tuesday.

With developments moving quickly, Cottarelli stepped aside and Mattarella summoned Conte, who had returned to Rome earlier in the day after turning over his morning class to a substitute.

"We are not yet at the point where investors refuse to lend money to Italy", said Roberto Coronado of PineBridge Investments.

The president had invoked his constitutional powers to reject the populists' initial choice for economy minister because he is an advocate of a backup plan to exit from euro-currency membership.

Premier-designate Carlo Cottarelli told reporters on Thursday that "it is no longer necessary to form a technical government".

But in a surprise twist, the populists resurrected the coalition talks and Conte eventually accepted a new mandate for the premiership.

"The populist and right-wing government has a program that's unsafe for the country and the events of recent days confirm our longstanding concerns", said Maurizio Martina, a leader of the Democratic Party, which will now leave government for the opposition.

Giuseppe Conte, a little-known law professor, was sworn in as prime minister Friday, almost 90 days after an inconclusive March 4 vote.

But there are also reports a snap election might be called, or that two populist parties could try again to form an administration.

Salvini said he would set straight to work on a campaign pledge to expel many of several hundred thousand asylum-seekers who were rescued at sea from human traffickers over the last few years but are ineligible for asylum.

  • Joey Payne