Italy crisis: populists set to form government

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In an abrupt U-turn, he has now abandoned this idea and assented to Giuseppe Conte leading Italy and forming a coalition government consisting of anti-establishment parties Five Star (M5S) and the League.

The president‚à "ôs office announced Thursday that Conte had accepted the role, and that he would be sworn in Friday afternoon with ministers".

Accepting the mandate to form a government from President Sergio Mattarella on Thursday, Conte, a law professor with no political experience, said the new government would work to lift Italian living standards.

After meeting President Mattarella, Mr Conte confirmed that the new candidate for the key economy minister post would be economics professor Giovanni Tria.

Carlo Cottarelli, a former International Monetary Fund official, was tipped as premier of a non-political government of technocrats after an attempt by two populist parties to form a government foundered.

The celebrations coincided with Italy's Republic Day, which marks the founding of the Italian republic. The 5-Stars, by contrast, got 32 percent. The government is expected to win.

The ceremony took place in Rome. Many analysts have suggested that the two deputies will hold real power, leaving the inexperienced Conte to do their bidding.

Lega Nord leader Matteo Salvini was named interior minister while the head of the Five Star Movement, Luigi Di Maio, became labor and economic development minister.

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Salvini has long wanted his new post, from where he will aim to stop "the business" of migration, cracking down on people smuggling networks and speed up expulsions of illegal immigrants. The government's borrowing rate for two-year money doubled to two per cent. The disaffection has grown in recent years as hundreds of thousands of migrants have landed on Italy's shores from north Africa, fuelling support for the League which accuses the European Union of abandoning Italy to deal with the influx on its own.

Of 18 ministers in the cabinet, only five are women.

The changing of the guard sets the stage for obligatory confidence votes in Parliament next week.

A source close to 5-Star, the single largest party in the new parliament, said it would try again to form a coalition with the right-wing League. Nigel Farage, a British force behind the successful Brexit movement, advised Italy's populists to "stay strong or the bully boys will be after you".

European Commission President Jean-Claude Juncker tweeted that the EU's executive would be "at Italy's side on its reform path and remain attentive to Italy's expectations of and proposals for the future of the EU".

"Italians have to take care of the poor regions of Italy. That means more work, less corruption, seriousness", he said. "We will help them, as we always did. But don't play this game, insisting and loading with the responsibility, the European Union".

Salvini called the comments "shameful and racist", adding: "The new government will make sure that the rights and the dignity of 60 million Italians will be respected". "The sooner we vote the better".

Media reports say Mr Cottarelli, an ex-IMF economist, has failed to secure support from major political parties and may not even bother to be sworn in.