Coalition deal agreed after Rome roils global markets

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Giuseppe Conte delivers a declaration after a meeting with Italian President Sergio Mattarella as part of consultations for a new government at the Quirinale Palace on May 23, 2018 in Rome, Italy.

A populist coalition government will be sworn into power in Italy Friday, ending months of political uncertainty in the euro zone’s third-largest economy.

President Sergio Mattarella approved a patched up bid from Italy’s anti-establishment Five Star Movement (M5S) and right-wing Lega (League) party on Thursday evening, just days after a bitter feud roiled global financial markets.

“All the conditions have been fulfilled for a political, Five Star and Lega government,” Luigi Di Maio of M5S and Matteo Salvini of Lega, both the leaders of their respective parties, said in a joint statement following several hours of talks in central Rome.

Only days ago, Mattarella refused to accept an initial bid from Italy’s populist parties over concerns about an economy minister who had helped write a guide for withdrawing Italy from the euro zone. That move plunged the country back into crisis mode, amid fears a fresh election could be framed as a de facto referendum on Italy’s role in Europe.

However, on Thursday, M5S and Lega moved to revise their combined slate of ministers, reshuffling a controversial pick for economy minister to a somewhat less critical post.

The shake-up seemed to be enough to win approval from Italy’s head of state, who preferred an elected administration to the stop-gap alternative he had in reserve.