Eyes on Italy's president after he vetoes populists' choice

Italian President Sergio Mattarella

Italian President Sergio Mattarella

President Sergio Mattarella vetoed the nomination of fierce euroskeptic Paolo Savona as economy minister, enraging the anti-establishment Five Star Movement and far-right League and prompting their prime minister-elect to step aside.

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5-Star leader Luigi Di Maio called on parliament to impeach the mild-mannered Mattarella, while League chief Matteo Salvini threatened mass protests unless snap elections were called.

The parties that chose Conte as premier had spent the previous weeks drawing up a platform for a new government, and although both parties have at times signaled their opposition to the euro, exiting was not mentioned in the final version of their proposed platform.

"Either the government gets off the ground and starts working in the coming hours, or we might as well go back to elections", Salvini said.

Mattarella said Conte refused to support "any other solution" and then, faced with the president's refusal to approve the choice of Savona, gave up his mandate to be prime minister.

"They've replaced a government with a majority with one that won't obtain one", said Five Star leader Luigi Di Maio to supporters at a rally near Rome.

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"It's an institutional clash without precedent", Di Maio said on a live-streamed Facebook video.

The prospect of a populist government running Italy had already caused turmoil in financial markets, over fear that the coalition would unleash a spending splurge and increase Italy's massive debt mountain - the equivalent of more than 1.3 times the nation's domestic output.

Mattarella has not spoken publicly about Savona, but through his aides he has made it clear he does not want an anti-euro economy minister and that he would not accept the "diktat" of the parties.

Outgoing Economy Minister Pier Carlo Padoan said on Sunday that the problem was not Savona, but the coalition's economic plan, which is "clearly unsustainable". "For now it's more relief that Italy will not - for now at least - have an avowed eurosceptic finance minister".

In his statement, Savona said his position on debt was the same as that forged by the potential coalition allies in their program - which says it will be reduced not through austerity or tax cuts, but through targeted investments and policies that boost economic growth.

Savona, who served as industry minister in a government in the 1990s, has questioned whether Italy at some point should ditch the euro as its official currency. But his critical stance on the euro has been the focus of concern.

Under that article, the president would be voted on "for high treason or attacking the constitution" by all members of parliament.

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