The anti-establishment 5-Star Movement (M5S) and the anti-migrant Euroskeptic League on Thursday held out for their economy minister pick, 82-year-old Euroskeptic economist Paola Savona, even as President Sergio Mattarella said he would not submit to diktats.
League leader Matteo Salvini said that the former industry minister "is the figure able to put Italy back at the centre of the debate in Europe". "It seems that in the past Savona has had doubts on the efficacy of the euro: I ask myself if the free vote of Italians has any meaning, if it should be respected and what the problem is, if someone puts his competence at your disposal to discuss in Europe for the good of Italians" said Salvini.
Sources at President Mattarella's office said that the big issue on the formation of a new government was not supposed vetoes against some ministers but, on the contrary, possible diktats to the premier and the head of State on the exercise of the functions given to them by the Constitution. The sources said the president's office was awaiting the outcome of the consultations Conte is holding.
Salvini replied "what diktats ? Rather ideas, proposals and suggestions..." He said "there is an economist who represents the will of the Italians to count more in Europe," adding, asked if there was a plan B, "we already have the best at our disposal, Savona is the guarantee that Italy can sit at the table as a protagonist. I don't see why we should say No to Savona".
Salvini added that Conte would have the "honour and the burden of proposing the names of those who will take on the task of realising Italians' expectations".
M5S leader Luigi Di Maio said "today we are very happy, there are still issues to face, Conte and President Mattarella will deal with the ministers, we are one of the two forces that make up the majority that is aiming to govern for five years".
The spread between Italy's 10-year BTP bond and the German Bund rose to 195 points after Salvini said he intended to do "the opposite of what the EU has threatened Italy with for the past few years". It later dipped to close on 191.
The yield went up to 2.4%, a level it last reached at the end of 2014, before dipping to 2.38% by the close.
The spread had earlier dipped to 177 on better expectations from the incoming government.
There was pressure on Spanish and Portuguese bonds too.
The spread has been rising on fears about the eurozone's first populist government coming to Italy.
The lower the spread is, the better it is for the Italian economy and debt-servicing costs.
The spread rose above 200 points last year on EU populist fears in France and other countries.
Premier designate Giuseppe Conte, meanwhile, is holding a round of consultations with Italy's political parties at the Lower House on Thursday after getting a mandate from Mattarella on Wednesday to form a government.
Conte, a law professor with no political experience picked to lead a coalition government by the 5-Star Movement and the League, accepted the mandate with 'reservation'.
The consultations should help Conte decide whether he will be able to form a new government, which Italy has been waiting for since the March 4 general election, and drop the 'reservation'.
Speaking after getting the mandate for an M5S-League executive, Conte said that he would be the "defence attorney" for the Italian people.
The number of Senators willing to support a government led by Conte has risen to 171 out of 318, ten more than needed for an absolute majority, after four crossed over from the mixed group.
The League-M5S-backed future government has much more leeway in the Lower House, where some 352 out of 630 are expected to support it.
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