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We have a new government!

After months of political drama which had worried financial markets and Italy's EU partners, Italy has finally a new government.

Just when fresh elections seemed inevitable, on Thursday, President Sergio Mattarella named Giuseppe Conte prime minister for the second time in less than a fortnight (he had formally rejected a mandate to form a new government, after his choice of anti-Europe Paolo Savona as Economy Minister was vetoed by President Sergio Mattarella). This time Mattarella approved Conte’s revised government made up of the nationalist League and anti-establishment Five Star Movement.

Over the last few months, Italy’s political instability concerned other EU members who feared that the new government may leave the union and the Euro, which could precipitate the collapse of the EU.

The new coalition wants to reject austerity and increasing spending and also wishes to renegotiate EU treaties and review the bloc's economic governance. Its economic proposals include a monthly basic income for Italy's poorest and a two tier "flat" tax. 

At the beginning of this week there will be the vote of confidence in both houses of parliament. It is almost certain that Five Star and the League's combined majority in parliament will ensure the success of the vote of confidence.

The new government is comprised of 18 ministers, five of whom are women. There are nine Cabinet members from the 5Stars, seven from the League (including Savona) and two technocrats. In the team there are four lawyers including the Prime minister. Six of the 18 are from Lombardy, Italy’s richest region and a League stronghold.

Conte named Salvini as interior minister, while Di Maio is minister for economic development. Both will also be deputy prime ministers. Other notable appointments to the new cabinet include: Foreign: Enzo Moavero Milanesi (independent, ex-European Affairs minister); Defence: Elisabetta Trenta (M5S); European affairs: Paolo Savona (independent), the controversial original choice for finance.

It won’t be an easy ride for the new government set to go on a collision course with the European union as the new government’s tax cuts and new welfare spending may not be acceptable to EU spending rules.

Salvini’s migrant policy, which includes cracking down on people smuggling networks and speed up expulsions of illegal immigrants, is also likely to cause friction with Italy’s European partners.

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