Uncertainty high as Italy premier-designate tweaks Cabinet

Conte read the list of ministers and told reporters in a brief statement: "We will work with determination to improve the quality of life of all Italians".

Despite the softer tone from 5-Star and hopeful remarks from Cottarelli, a top adviser to Salvini said the League was not prepared to abandon Savona, the sole obstacle to the League and 5-Star winning the president's blessing for a coalition.

Di Maio says that Giuseppe Conte could be recalled to form a cabinet, without Savone in the Ministry of the economy, a proposal welcomed by President Mattarella.

The political uncertainty rattled European stock markets on Tuesday, and led to a spike in the yield on 10-year Italian government bonds, although the price dropped back on Wednesday.

Last week, they agreed on a political unknown, lawyer Giuseppe Conte, as their pick to head their coalition government, although he has no political experience whatsoever.

Shortly afterwards Giovanni Grasso, a spokesman for the president said Cottarelli "has informed the head of state of the situation and... both will meet again tomorrow morning".

After more than two months of failed negotiations, Mr Mattarella then turned to former International Monetary Fund official Mr Cottarelli to form a neutral government made up of technocrats to lead Italy until early elections.

Their first try failed when Mattarella rejected their choice of economy minister as dangerously euroskeptic.

In the latest twist, Di Maio said Wednesday he's willing to suggest a different finance minister.

5-Star leader Luigi Di Maio called on parliament to impeach the mild-mannered Mattarella.

Salvini wrote: "Maybe, finally, we are there".

As soon as Conte took his first step on the political stage, it was revealed that he had inflated his CV with false claims of appointments as a researcher at various universities in the US and Europe. In response, government officials expressed solidarity for Mr. Mattarella. Carlo Cottarelli was expected to formally step aside.

"We are not in the market", Salvini said when asked about the possibility of reopening negotiations, calling for elections as soon as possible. There are going to be protests and drama in Italy, with Italians having concerns about their savings as financial institutions put the country's stock market and bonds under pressure, and the government's borrowing costs increase. The upshot is that Cottarelli's technocratic government team is ready, but that he and Mattarella are giving more time for the populist parties to seek an agreement, the official said.

The deadlock follows an aborted attempt by the 5-Star Movement and right-wing League to form a government.

The contract called for heavy spending to introduce a basic income for needy Italians and a two-tier flat tax, as well as pension reforms, but was light on financing details.

The President sparked another political crisis in Rome when he refused to accept Conte's nomination for economy minister, 81-year-old Eurosceptic Paulo Savano. A 5-star source said the movement was considering campaigning together with the League if the nation goes back to the polls. That would be a symbolic defeat for Mattarella, who had hoped to calm financial markets with the appointment of a neutral government.

There were fears a new election could turn into a referendum on Italy's European Union membership after Mr Mattarella vetoed the populist parties' choice of an arch-Eurosceptic as finance minister.

  • Leroy Wright