Italian president names ex-IMF official as interim PM

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Europe

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Italy's president appointed former International Monetary Fund official Carlo Cottarelli as interim prime minister on Monday with a task to form a new government.

Cottarelli is also expected to bring order to political and constitutional turmoil in his country.

The euro zone's third-largest economy has been seeking a new government since inconclusive March elections, with anti-establishment forces abandoning their efforts to form a ruling coalition at the weekend after a standoff with the president over their choice of economy minister.

President Sergio Mattarella had vetoed the parties' choice of a Eurosceptic as economy minister, prompting the Five Star Movement and far-right League party to accuse the president of betraying voters and to drop their plan to take power.

Efforts to form Italian government collapse as key minister rejected

Italian economist, formerly with the International Monetary Fund, Carlo Cottarelli (R), leaves the Quirinale presidential palace after a meeting with Italian President Sergio Mattarella that gave him mandate to form a government in Rome, Italy on May 28, 2018. /VCG Photo

Cottarelli told reporters after his appointment as the interim prime minister that elections would be held in the autumn or early next year.

The prospect of fresh elections rattled financial markets, with investors worried the vote could become a de facto referendum on Italy's euro membership.

The euro hit a fresh six-month low and yields on Italian government bonds climbed.

The 5-Star Movement is considering campaigning together with the League if the nation goes back to the polls, a 5-star source said.

The centre-right Forza Italia party also said it would not vote in favor of a possible Cottarelli government.

Italian lawyer Giuseppe Conte (R), who was previously appointed to be the country's prime minister-designate, smiles during a meeting with Five Star Movement (M5S) leader Luigi Di Maio (L) and League leader Matteo Salvini (C), in Rome, Italy on May 25, 2018. /VCG Photo

In a televised address, Mattarella said he had rejected the coalition's candidate for the crucial economy portfolio, 81-year-old Paolo Savona because the economist had threatened to pull Italy out of the eurozone.

"The uncertainty over our position has alarmed investors and savers both in Italy and abroad," Mattarella said, adding:" Membership of the euro is a fundamental choice. If we want to discuss it, then we should do so in a serious fashion."

The League and 5-Star, which had spent days drawing up a coalition pact aimed at ending a stalemate following inconclusive elections in March, responded with fury to Mattarella, accusing him of abusing his office.

On December 10, 2007, the Eurosceptic economist Paolo Savona looks on during a meeting in Rome. /VCG Photo

5-Star leader Luigi Di Maio called on parliament to impeach Mattarella. League chief Matteo Salvini threatened mass protests unless snap elections were called.

"If there's not the OK of Berlin, Paris or Brussels, a government cannot be formed in Italy. It's madness, and I ask the Italian people to stay close to us because I want to bring democracy back to this country," Salvini told reporters.

However, Salvini later dismissed Di Maio's call. "We need to keep cool. Some things cannot be done in the throes of anger...I don't want to talk about impeachment," he told Radio Capital.

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Source(s): Reuters