Italy's Populist Parties Win Approval to Form Government

Italy's Populist Parties Win Approval to Form Government

Italy's Populist Parties Win Approval to Form Government

"While Italian equities make up less than 5 per cent of the Euro Stoxx 50, the widening of peripheral bond spreads often brings up euro existential questions, as we've seen in the past, and can lead to a spike in the European equity risk premium, which takes a heavy toll on overall markets", he added.

Cottarelli would appease financial markets but his administration may not get sufficient parliamentary support, meaning such a cabinet would remain in office as a caretaker for some months until a new round of elections is held.

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

A formation of the new government will at least temporarily allay those concerns, because it will - for now - remove the threat that snap elections will be called later this summer, a prospect which anxious investors because it could have bolstered anti-EU parties. After rejecting Conte's first attempt, Mattarella tapped a former International Monetary Fund official to head a possible interim government of technocrats to see Italy through to an early election.

Leaders of both parties signaled a willingness to try again late Wednesday. League leader Matteo Salvini, meanwhile, said he isn't closing the doors on any solution.

The prospect of a new vote fueled by euroskeptic outrage spooked investors who feared the election would become a vote on whether Italy should abandon the euro, with uncertain consequences for Europe's economy.

Italy's populist parties finally reached a deal to form a coalition government on Thursday evening after almost three months of political deadlock - a prospect likely to chill the European Union and shake financial markets.

By Wednesday, markets had largely recovered with the news of a second chance for a longer-term arrangement. They have also proposed plans to cut taxes, scrap a previously agreed pension plan, and institute a "universal basic income".

Canada's oil pipeline purchase sparks protest in Seattle
Premier John Horgan and also facing Lower Mainland opposition with protests in Burnaby and Vancouver. By buying the pipeline outright, the Trudeau government has gone all in on this project.

Erin Browne, head of asset allocation at UBS Asset Management in NY, said that though fears of Italy's leaving the euro, or "Quitaly", waned on Wednesday, "We recognize the path to resolution is likely to be bumpy", saying the firm "downgraded our outlook on European assets to account for recent developments".

A view shows a the Quirinale Palace, official residence of the Italian President, in central Rome on May 30, 2018. With Italy being the third-largest economy in the eurozone, the implications of the country's economic failure will impact most of the global market.

Juncker said "he is convinced that Italy will continue on its European path".

"I am absolutely pro-Europe".

"One can say that Europe is better prepared for hard situations than before".

LONDON, May 31 (Reuters) - The euro rallied further on Thursday as Italian parties made last-ditch efforts to form a government and avert elections, going some way towards easing concerns about the impact of a political crisis there.

Election promises, however, can be quite different when compared to political reality.

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