Italy hasn't had a government for three months now, because no political group can form a majority. The political chaos and global ramifications have left Italy in a precarious situation. Natalie Carney reports from Rome.  

Italian politics have never been simple. The current political crisis embroiling the country has caused significant concern for the EU as well as global markets. On Sunday, Italian President Sergio Mattarella vetoed Paolo Savona to serve as the country's next finance minister. The president then turned to pro-austerity economist Carlo Cottarelli to form the next technocratic government. It's a government unlikely to be approved by the anti-establishment Five Star Movement and the far right League party, which won the most votes in Italy's March election.

GIOVANNI ORSINA SCHOOL OF GOVERNMENT, LUISS-GUIDO CARLI UNIVERSITY "If this new government, Cottarelli's government goes to chambers and there is an overall 'no' vote, then, you see, this means that Italy doesn't have a government and this means Italy would be a very feeble negotiator on G7, Europe and, of course, the issue of capital markets."

Cottarelli and President Mattarella met briefly on Wednesday to try and find a way out of the current situation, but according to the head of foreign affairs committee for the Five Star Movement, the only way out is for the president to re-consider its proposed finance minister.

MANLIO DI STEFANO FOREIGN AFFAIRS HEAD, FIVE STAR MOVEMENT "We think that the only way solution now is accept this government we brought to him on Sunday, with Savona or going back to the polls "We will not support any different government from the one that was voted by the people."

The two parties, the Five Star Movement and the League, share little in common, but do agree on limiting the European Union's hand in Italian affairs.

NATALIE CARNEY ROME "But electoral promises can be quite different when compared to political reality. There has been a lot of anti-EU rhetoric from the League and anti-austerity economic promises from the Five Star Movement. There is also a lot of doubt about what these two parties can really accomplish."

The Five Star Movement has promised to reduce taxes and roll out universal basic income for the unemployed, a move that could jeopardize Italy's obligation to the European Monetary Union to reduce its debt ratio by 60%.

GIOVANNI ORSINA SCHOOL OF GOVERNMENT, LUISS-GUIDO CARLI UNIVERSITY "Withdrawing from the Euro, withdrawing from is extremely difficult is extremely complicated, and Italy would pay a very high price for it. It is very clear that this hypothesis has been discussed. How realistic is, if they want to do that, can they do that? Most likely they cannot."

Analysts predict the two parties will drop their insistence on Savona as finance minister in order to resurrect their bid to govern together. Or the two parties will abstain from voting on Cottarelli's interim government to return some confidence to the markets until new elections are called likely in the fall.

If a coalition populist government is formed between the Five Star Movement and the League, even if a temporary one, it will be the first in western Europe and have lasting effects across the union. Natalie Carney, CGTN, Rome.