President nixed Cabinet pick over markets

28 May, 2018, 14:50 | Author: Angel Logan
  • Italian President Sergio Mattarella addresses the media after meeting Italy's premier-designate Giuseppe Conte in Rome on Sunday

Italian lawyer Giuseppe Conte addresses journalists after a meeting with Italy's President Sergio Mattarella on May 23, 2018 at the Quirinale presidential palace in Rome.

Sparking a new political crisis, Sergio Mattarella refused to approve the 5 Star Movement and the League's pick to head the economy ministry, Paolo Savona, an 81-year-old economist who has criticized the euro.

European stocks gave up early gains and bond yields recovered from lows as early elections loomed in Italy after the anti-establishment 5-Star and League parties abandoned plans to form a government.

Five Star leaders are discussing a possible attempt to seek Mattarella's impeachment, invoking a constitutional clause which says the president is not responsible for actions carried out as part of his office, except for high treason or for violating the constitution, a Five Star official said.

Italy's outgoing economy minister, Pier Carlo Padoan, said in a TV interview Sunday that the real problem isn't Savona, whom he described as having a good background for the post.

The PM said elections will be held no later than August unless he wins the confidence of parliament.

The credit rating agency said on Friday it may downgrade Italy's sovereign debt, citing risks of weakened public finances and a row back on past reforms.

The euro rallied against the dollar at the end of a day of drama that saw the prospect of a populist government determined to take on Europe recede for now.

10 2008 shows the 81 hold economist Paolo Savona looking on during a meeting in Rome. Paolo Savona chosen by the Italian populists to be the new finance minister is an eurosceptic economist very critical of Germany who made
Italy's efforts to form government break down as eurosceptic Savona rejected

The country could be headed for another election in the coming months. Mattarella is staunchly pro-Europe.

The agreement to form a populist coalition came after weeks of fruitless negotiations following the results of the March 4 elections, which did not give any party an outright majority.

Italian President Sergio Mattarella received prime minister-designate Giuseppe Conte in a meeting that aimed to resolve a days-long standoff over the composition of Italy's next cabinet or lead to the appointment of a caretaker government.

Cottarelli first joined the IMF in 1988, following six years in the Bank of Italy's Monetary and Financial Sector Division.

"I have given up my mandate to form the government of change", said lawyer and political novice Giuseppe Conte, 53, plunging the country into a political crisis almost three months after March's inconclusive general election.

Mattarella vetoed the nomination, but the M5S and League refused to back down, both calling to impeach the president. Savona has questioned whether Italy should ditch the euro as its currency.

The Five Star/League coalition has a majority in both houses of parliament.

Mr Savona also said his position on debt was the same as that forged by the potential coalition allies in their programme - which says it will be reduced not through austerity or tax cuts, but through targeted investments and policies that boost economic growth.

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