ROME – Italy appeared to step back from the brink of a continent-rattling political crisis on Thursday night, with officials agreeing to a deal that averts the threat of fresh elections and puts two populist parties in charge of the eurozone’s third largest economy.
The agreement was the latest twist in a topsy-turvy week for Italian politics, one that on Tuesday had sent global markets tumbling amid jitters that the country was careening toward a new vote and a possible euro exit. Investors had feared an even greater populist surge if a fresh election were held.
But negotiations Wednesday and Thursday yielded an unexpected breakthrough, culminating in a presidential announcement late Thursday night that the country’s new
government will be sworn in on Friday.
With the revival of a deal that had earlier been scuttled by the pro-European president, Italy becomes the first core Western European country to be led by a purely populist government.
The anti-establishment Five Star Movement and the far-right League — the parties that emerged from the country’s March vote with the greatest momentum — will govern together. And they will get their preferred prime minister, the little-known law professor Giuseppe Conte.
“We will work resolutely to improve the quality of life of all Italians,” Conte announced Thursday night after the president, Sergio Mattarella, formally asked him to lead a new government.
The president had balked at the populist parties’ original choice for finance minister, Paolo Savona, an 81-year-old who has been fiercely critical of the E.U. and has suggested Italy should abandon the euro.
In a concession, the parties proposed a new pick for finance minister, Giovanni Tria, a low-profile economics professor at the Tor Vergata University of Rome. Savona, meanwhile, will be shifted to European affairs minister.
Although technocrats will take some of the government’s top jobs, most observers believe that the leaders of the two parties — Five Star’s Luigi Di Maio and the League’s Matteo Salvini — will be the real powers behind the new administration.
Both will officially be vice premiers, with Di Maio also taking the economic development ministry and Salvini running the powerful interior ministry, which oversees Italian law enforcement and border control.
Salvini, whose party ran on a stridently anti-immigration platform, has vowed the mass deportation of migrants in a country that has become the top entry point for those crossing the Mediterranean to reach Europe.
Witte reported from Berlin. This story will be updated.