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Italy’s Populist Coalition Takes Power After Making Deal With Pro-EU President

Italy’s new populist coalition was sworn into power on Friday, bringing months of contentious political negotiations to a close and setting the stage for a potentially bigger battle between Rome and Brussels.

In a joint announcement, the right-wing nationalist League and the populist Five Star Movement said they had reached a deal with President Sergio Mattarella to form a government headed by Prime Minister-designate Giuseppe Conte, a little-known law professor.

“All the conditions have been fulfilled for a political, Five Star and League government,” Luigi Di Maio, the Five Star chief, and Matteo Salvini, the League leader, said in their joint statement, according to the Guardian.

The deal ends, temporarily, a bitter power struggle between Italy’s pro-EU establishment and the upstart Five Star and League parties, which were the top-vote winners in national elections in March. The populists had planned to form a unity government over their mutual disdain for the EU’s control of Italian fiscal and immigration policies but were sidetracked when Mattarella blocked their appointment of ardent euroskeptic economist Paolo Savona to be the next finance minister.

Mattarella’s intervention caused the populist coalition to fall apart, setting the stage for new elections later this summer. In the meantime, Italy’s government was to be overseen by the solidly pro-euro technocrat Carlo Cottarelli — a choice that enraged Five Star and League leaders, who called for mass demonstrations against Mattarella.

The potentially explosive situation was diffused when Mattarella, fearing new elections would further empower the populist coalition, gave Five Star and the League more time to reach a new agreement. The parties came back with a deal-clinching proposition: withdraw Savona from consideration as finance minister in favor of Giovanni Tria — a little-known economics professor not seen as an advocate of leaving the Eurozone.

Mattarella signed off on the deal, giving Italy an anti-establishment government almost certain to be more antagonistic toward Brussels than its predecessor. Although neither Five Star nor the League has explicitly called for abandoning the euro, they have promised to renegotiate Eurozone agreements mandating austerity measures.

Under the power-sharing agreement, Salvini and Di Maio will both become deputy prime ministers, reports Reuters. Salvini will also take over the interior ministry, giving him authority over immigration, while Di Maio will assume a newly created post in charge of labor and industrial policy.

As for Savona, he will become the European affairs minister — meaning Italy’s liaison to Brussels is a euroskeptic who has called the common currency a “German cage” and has advocated a “Plan B” for exiting the Eurozone.

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