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Five Star and Lega Coalition Reaches Agreement

The Five Star + Lega coalition is back in place. Italy's president Sergio Mattarella likely has little choice this time.

Agreement

  • Giuseppe Conte is back in the role as Prime Minister. He previously gave up a mandate to form a government last weekend when president Sergio Mattarella refused to seat Eurosceptic 81-year-old Paolo Savona as economy minister.
  • Paolo Savona will become European affairs minister.
  • Five Star leader Luigi Di Maio is expected to work in a combined role of Deputy Prime minister and Work and Development Secretary.
  • Lega leader Matteo Salvini is expected to work in a combined role of Deputy Prime minister and Home Secretary.

Sergio Mattarella likely has no choice this time given the bond market reaction that followed his rejection of Savona over the weekend. But we will see.

What Happened?

I suspect neither Di Maio nor Salvini wanted to risk waiting for another election despite a surge in the popularity of Lega.

A bird in hand is better than a bigger bird in the bush.

Mike "Mish" Shedlock

Analogous to the second round of preliminary agreements on seating arrangements in a sinking canoe.

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