Markets calm on signs that Italy may avoid elections

MILAN | Markets calm on signs that Italy may avoid elections

MILAN Financial markets calmed Thursday amid increasing signs that Italy may avoid imminent elections after the president gave two populist parties time to figure out whether they can agree on an alternative to a euroskeptic economy minister.

A day after the possibility of a governing coalition between the anti-establishment 5-Star Movement and the right-wing League was revived, League leader Matteo Salvini canceled appointments in northern Italy to travel to Rome.

Salvini declined to respond to reporters’ questions when he arrived at the Rome airport, and the news agency ANSA said he went straight to the lower house of parliament.

The two parties together won a narrow majority in March 4 elections. They presented their proposed Cabinet over the weekend, but President Sergio Mattarella vetoed their euroskeptic economy minister, collapsing the deal.

Luigi Di Maio, the 5-Star leader, has proposed moving contested ministerial candidate Paolo Savona to a different Cabinet post. Salvini late Wednesday said that he isn’t closing the doors on any solution but also indicated some resistance to the change, saying “if someone in Berlin or Paris wakes up in a bad mood that doesn’t mean that an Italian minister gets kicked out.”

Mattarella gave the leaders an unspecified amount of time to form a coalition government after markets plunged on news of a proposed interim administration that would take Italy swiftly to new elections. Many worried that new polls would be a de facto referendum on Italy’s membership of the euro.

Markets reacted with relief to the prospect of a political government. The Milan stock exchange opened slightly higher Thursday, after already showing relief with a close up 2 percent on Wednesday.

In another development, far-right Brothers of Italy leader Giorgia Meloni signaled she would support a populist government, reversing her previous position and giving the potential administration more breathing room to pass confidence votes in parliament. Her party was part of a center-right bloc including the League and Berlusconi’s party ahead of the March elections.

ANSA also reported that the little-known law professor tapped by the 5-Stars and the League as a premier-designate had skipped his Thursday class in Florence to travel to Rome.

Giuseppe Conte had left Rome Sunday, relinquishing his brief role as premier-designate, after Mattarella rejected the populist parties’ Cabinet list. The president, in his role as guarantor of the constitution, said that an anti-euro economics minister would endanger Italians’ savings, which are safeguarded under the Italian constitution.

“We never put Europe up for discussion. We are in a European system and we want to remain,” Conte said in a brief video interview posted by the Nazione daily in Florence.

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By Associated Press – published on STL.News by St. Louis Media, LLC (Z.S)

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