Italy’s attempt to form government fails as President sides with the Euro – Reuters

As reported by Reuters, Italy’s attempt to form a government following recent elections has floundered after the Italian President, Sergio Mattarella, rejected a eurosceptic candidate for the position of Economy Minister, triggering a constitutional challenge as the coalition government decries the move.

The recent government election saw a coalition form between the far-right League and anti-establishment 5-Star Movement parties, and the leader of 5-Star is now calling for the President’s impeachment following his rejection of anti-Euro Paolo Savona for Economy Minister by the newly-formed coalition.

Financial markets tumbled last week on fears the mooted coalition would unleash a spending splurge and increase Italy’s already huge debt mountain, which is equivalent to more than 1.3 times the nation’s domestic output.  Looking to allay investor concerns, Mattarella vetoed on Sunday the choice of 81-year-old economist Paolo Savona, a vocal critic of the single currency, to the pivotal economy post.  Prime Minister-designate Giuseppe Conte promptly abandoned his efforts to form a government.  In a somber, televised speech, Mattarella said he had accepted all the suggested ministers bar Savona.  “I asked for that ministry an authoritative political figure from the coalition parties who was not seen as the supporter of a line that could provoke Italy’s exit from the euro,” he said.

 – Reuters

Concerns are now rising that the defunct government will push for a fresh round of elections, and the possibility of an un-elected technocratic government could see support swell for the anti-establishment coalition that barely missed a popular vote when counted together.