President Sergio Mattarella agreed to Conte's appointment last week – but the next day he turned down the election of Finance Minister, forcing Conte, 53, to give up his attempt to form a government.
Thursday's announcement came a few hours after The right-wing league and the Five-Star Movement – the two largest parties after the March general election – said they form a coalition government that could put an end to months of political insecurity of the country signals.
Conte was summoned to the Quirinale, the presidential palace of Italy, on Thursday evening and appointed shortly thereafter. The President also approved a list of cabinet ministers brought to the palace by Conte.
The announcement came soon after Carlo Cottarelli, a former official of the International Monetary Fund, who had been asked by President Sergio Mattarella to form an interim government earlier this week, resigned his seat for Conte.
"A political government is by far the best solution for the country," Cottarelli said after handing over his resignation to the president. "It avoids the uncertainty of new elections."
But a populist, Eurosceptic government in Europe's fourth-largest economy will likely attract attention from other European leaders, notably French President Emmanuel Macron and German Chancellor Angela Merkel. Both seek to promote political and economic integration in the EU.
The League is also facing widespread criticism of xenophobic and anti-immigrant policies stemming from right-wing extremist parties across Europe, including the AfD and the National Front of France. A few hours before his party announced that it would form a coalition government, League chief Matteo Salvini posted a video on Facebook featuring a man of African descent who said a dove with the words "Go home !! " [1
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The League and Five Star have proposed a government led by Conte last week. But Mattarella opposed Contes decision for the Ministry of Finance – a Eurosceptic candidate whose appointment Mattarella said would alarm investors and have dangerous consequences for Italy's outstanding public debt.
The parties should this time propose another candidate for the Ministry of Finance. The new government of the country could be sworn in on Friday morning. The new government is expected to face a vote of confidence in Parliament early next week.
A new European crisis?
Italy has not had a longest such government in the country's post-war history since the election in March.
Since the election, five-star leaders Luigi Di Maio and Salvini, the league leader, have held talks with Mattarella, but have struggled to form a government.
During the negotiations, the populists have dropped some of their most ardent campaign promises, such as calling for a referendum on whether Italy should abandon the euro or leave the European Union
Instead, they promised an expenditure and tax cut, the investors in turmoil and could contain seeds of a new European crisis.
Tensions have also risen between the two parties and the president, which peaked when Di Maio demanded Mattarella's impeachment earlier this week following his refusal of Contes election of Finance Minister Paolo Savona
Conte: A Political Unknown
Born in the southern region of Apulia Conte lives in Florence, where he teaches civil law at the University of Florence.
When he joined the five-star movement in the recent elections, he said he supported the center-left ideals. He was mentioned as a potential minister of public administration in case the five-star movement gained a clear majority.
Contes first nomination as prime minister was briefly questioned after media reports accused him of beautifying parts of his resume. Efforts to reach Conte for the comment were unsuccessful.
He studied in the UK and the United States, according to his resume, where he perfected his English to teach international law. The five-star movement dismissed allegations that Conte beautified his qualifications.
"There is no reference (in his resume) to master or other university titles, but the simple and accurate description of his work as a scholar and university professor," the movement said in a post on its official blog.