European markets are on edge as Italy's government unravels

Standoff drags on in Italy over new economy minister

The leader of Italy's biggest party yesterday insisted the country should hold another election if an anti-establishment government is not imminently formed.

Savona's name was put forth by both coalition parties - the Five Star and League movements - to be the economics minister in the new government.

The coalition had wanted to place 81-year-old economist Paolo Savona in charge of Italy's economy, although the former industry minister has been a key figure in questioning Italy's participation in the eurozone and the budgetary restrictions the European Union requires of its members.

The president didn't immediately announce his next move, which could include appointing a non-political premier to guide the country back to the polls after the inconclusive national election held March 4. Several rounds of post-election talks with part leaders collapsed amid a mesh of seemingly irreconcilable demands.

Breitbart News former executive chairman Stephen K. Bannon, who is now in Rome, had been invited by the Center for American Studies to give a public address on Italy's historic populist moment Monday afternoon, but organizers cancelled the event Sunday night out of fear of riots.

He said an impeachment trial for Mattarella, 76, would be "almost a certainty".

"We must never forget that we are only ever a few short steps away from the very serious risk of losing the irreplaceable asset of trust", he said.

Di Maio and the League's Matteo Salvini are using the interim to pile pressure on the president who upset their bid for power by vetoing a euro-skeptic candidate for the job of finance minister.

League leader Matteo Salvini accused Mattarella of putting other states' interests above Italy.

Cottarelli, 64, was director of the International Monetary Fund's fiscal affairs department from 2008 to 2013 and became known as "Mr Scissors" for his public spending cuts in Italy.

Five Star chief Luigi Di Maio called on party supporters to attend a rally in Rome on Saturday, June 2, the anniversary of Italy's transformation into a republic in 1946, after what he called "Italian democracy's darkest night".

The 5star / League movement has a majority in both houses of parliament.

Mattarella said the appointment of Savona would have disastrous consequences for Italy's economy and ability to attract foreign investment.

However, Italians could be heading back to the polls as Mr Mattarella said he was considering political party leaders' requests for another election.

"Let's find someone of the same character and freedom as the excellent Savona, and professor Savona remains in the cabinet, in another role as minister", Di Maio said in a Facebook Live video.

However, in an apparent reference to Di Maio's plan he added an analogy between ministers and footballers: "If someone is a goalkeeper he has to play as goalkeeper, if someone is a striker he has to play as a striker".

The FTSE 100 edged up 0.12 per cent in morning trading, while the FTSE 250 was up 0.14 per cent. Germany's Dax rose 0.3 per cent.

"I'm not considering the individual, I don't want someone who supports an opinion, which was expressed a couple of times that would inevitably lead to Italy's exit from the euro", Mattarella said.

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