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Italy is considering a new solution to ease the turmoil in the financial markets



ROME – Italian Prime Minister-designate said on Wednesday that "new opportunities" had arisen to form a government based on the outcome of the vote on 4 March, and that he considered the time to mature in the face of the market's negative reaction to the prospect of new elections.

Efforts over a so-called "political" government failed on the weekend after President Sergio Mattarella had rejected his veto against a minister of economy proposed by the five-star movement, the two major election men in March, who became a populist Alliance had joined together.

After more than two months of failed negotiations, Mattarella then turned to former IMF representative Carlo Cottarelli to form a neutral government of technocrats to lead Italy to premature elections. The prospect of a new vote, sparked by anti-establishment and populist indignation, plunged stock markets along with investor confidence in Europe's third-largest economy. But on Wednesday, Cottarelli said in a statement that "new opportunities for the birth of a political government" had surfaced during his deliberations.

"This fact, which also took into account market tensions, forced him to wait for further developments," the statement said.

Officers from Mattarella's office said the president agreed with the decision.

Markets relaxed with the news, with the Milan Stock Exchange maintaining its upside momentum by 0.8 percent.

It was not clear what a political government might look like.

Economic analyst Lorenzo Codogno said the emergence of a possible political government would likely change the 5-star league coalition agreement and depose the euro-skeptical Paolo Savona from the post of Minister of Economic Affairs

Mattarella had a case against Savona, a former industrial minister The question had asked whether Italy should keep the euro, vetoed, which led to the collapse of the offer of the 5-star league.

"The initiative for a new anti-establishment government … would have to include a credible pro-European commitment and a commitment to the Italian constitution, ie the fiscal framework, to have a chance to fly," Codogno said ,

5-star anti-establishment leader Luigi Di Maio made another attempt on Tuesday night to form an alliance with the right wing to uphold his threat of impeachment proceedings against Mattarella and insist that the two blocks still have a parliamentary majority to support.

"We are ready to reconsider our position in the sense that if we make a mistake – something I doubt – we will say that, but now we should respect the will of the people," the chairman said The League, Matteo Salvini he would not get in the way A solution, but made it clear that early elections are the only way forward.

"I say this with all due respect: President Mattarella tells us that we can get out of the problem," he said. "The sooner we vote, the better."

Salvini has been complaining for a long time that Mattarella never commissioned the center-right bloc, which received the highest percentage of votes of 37 percent, to form a government. The 5-stars, however, received 32 percent.

The center-right alliance grouped the league with former Prime Minister Silvio Berlusconi's Forza Italia and the smaller right-wing Italian brothers.

Brotherhood leader Giorgia Meloni renewed her demand that Mattarella give the center-right a mandate to form a government that can win a parliamentary majority.

League sources told reporters the party "would not block quick fixes to deal with the emergency", but that Italians should vote again "as soon as possible".

Cottarelli had initially said elections could come "after August", but the market reaction on Tuesday prompted some legislators to propose an end to July, which would be unthinkable given the low turnout

Cottarelli's statement was published after he resigned Wednesday had briefly contacted Mattarella after asking for more time to present a proposed list of Cabinet ministers. His unexpected delay in forming a cabinet had raised fears about his government's prospects, as the majority of lawmakers made it clear that they would not vote positively for the mandatory vote of confidence in parliament.

Codogno analyst signals Democratic Party signals The rejection of a Cottarelli government had also dampened its chances, as it would be very short-lived and unable to introduce a mini-budget to neutralize VAT hikes. In addition, Ministers would have to commit themselves not to run for office in the upcoming elections and would have to give up their current jobs, if only for a few months.

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Barry contributed from Milan.

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