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Paolo Pizzoli, Senior Economist at ING, notes that yesterday evening president Sergio Mattarella gave Giuseppe Conte, a professor of law and a civic lawyer the mandate to form a new government backed by the anti-establishment Five Star Movement and the right-wing League.

Key Quotes

“In a brief press statement, professor Conte made his debut saying he was conscious of having to confirm Italy’s European and international position. He clarified that his government would be a government of change, as the country is expecting answers and proposed to be the defence attorney of the Italian people. He added that he would submit a program based on the agreement reached between the 5SM and the League and concluded that over the next few days he would prepare the list of ministers for president Mattarella’s approval.”

“Unsurprisingly, Conte’s short speech wanted to strike a difficult balance between the need to reassure the role of Italy on the international stage and that of reiterating the message that Italy and Italians will come first.”

“The next step in the process of forming a new government will be a list of proposed ministers.”

“Over the last few days, the League has strongly backed Paolo Savona for the role of the finance minister, an experienced economist with an impressive CV that boasts being a minister of industry in the Ciampi government, working at the Bank of Italy and being a university professor.”

“For the time being, European institutions have kept away from the domestic political debate. In the country recommendations released yesterday, the EU Commission took a neutral stance on public finance developments, preferring not to add to the additional short-term pressure.”

“The timeline for government formation foresees Conte running a round of consultations with the parties to check whether a majority can be reached in parliament. If so, Conte will complete the list of proposed ministers and will submit it to president Mattarella while definitively accepting the mandate. The president will then have to issue three decrees, marking the official nomination of the prime minister, the nomination of ministers, and the acceptance of the resignation of the outgoing caretaker Gentiloni government.”

“After these, the new government will be sworn in and will officially take office. Within ten days of installation, the new government will have to undergo the confidence vote in both branches of the parliament.”

“In our view, the installation part will be quick, possibly by the weekend.”