ROME: Italy’s president on Monday named a former IMF economist as caretaker prime minister to lead the country into new elections, possibly as soon as the autumn, after a political storm whipped up by the collapse of a populist bid for government.
The eurozone’s third largest economy had lurched into a fresh crisis when President Sergio Mattarella on Sunday vetoed the nomination of fierce eurosceptic Paolo Savona as economy minister in a planned coalition of the far-right League party and anti-establishment Five Star Movement.
His rejection of Savona and nomination of Carlo Cottarelli as caretaker prime minister sparked angry calls for his impeachment as Savona had the backing of the majority of lawmakers.
“This isn’t democracy, this isn’t respect for the popular vote. It’s the latest slap in the face from the powers-that-be that says Italy should be a slave, scared and precarious,” League leader Matteo Salvini charged.
The chaos — the latest chapter in a drawn-out political saga after an inconclusive March election — sent Italian stocks tumbling by as much as two percent at one stage, and bond yields surging, with Italy’s debt risk premium hitting its highest level since November 2013.
Cottarelli, 64, was director of the IMF’s fiscal affairs department from 2008 to 2013 and became known as “Mr Scissors” for making cuts to public spending in Italy.
He said that should his technocrat government win parliamentary approval, it would stay in place until elections at the “start of 2019”.
But if parliament fails to approve his government, a new election would be held “after August” — the most likely outcome given only the centre-left Democratic party has announced that it would vote in favour.