Italian President Sergio Mattarella commissioned Giuseppe Conte on Thursday to lead a ruling coalition of the five-star movement and the Democratic Party. This could improve the bad relationship between Italy and the European Union.
The market is happy with the prospect that the three-week political crisis will soon end. The crisis was triggered by the withdrawal of Sarvini, the leader of the Alliance Party, from the ruling alliance with the Five-Star Movement.
Salvigny's intention is to hold new elections to take advantage of the success of the Union Party in European elections. But his plan backfired, with polls less popular than the five-star movement of the Alliance Party and the Democratic Party (PD) preparing to abandon their past suspicions and form a new government.
Italian 10-year bond yields hit a record low Thursday as the possibility of early elections faded.
Konter said his first task was to draft a budget for 2020. Konte told reporters that he would submit a cabinet list to the president in the next few days.
But the formation of a new government has not yet been fully finalized, and the two parties still need to agree on a shared policy platform and how to allocate cabinet posts.
More complicated is the promise made by the Five Star Movement that the agreement with the Democratic Party would be submitted to its members for online voting. Many supporters of the five-star movement are opposed to reaching an agreement with the centre-left Democrats. Whether to vote "yes" or not is an uncertain factor.
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