Italy edged toward its first populist government as the eurosceptic 5-Star Movement and the right-wing League said a law professor with no political experience was their candidate to become the country’s next premier.
Neither 5-Star leader Luigi Di Maio nor League leader Matteo Salvini named Giuseppe Conte as their choice after closed-door meetings with President Sergio Mattarella.
“Giuseppe Conte will be a political premier on a political government, indicated by two political forces that include political figures,” Mr Di Maio wrote on the blog.
It is up to Mr Mattarella to say whether he accepts Mr Conte as premier-designate.
The prospect of a 5-Star-League government weighed heavily on markets and on Italy’s European allies.
The cost of borrowing to fund Italy’s persistently high public debt rose on Monday to the highest levels in nine months and the Milan stock market was trading down 1.5%.
France’s economics minister has already sounded an alarm that the eurozone’s financial stability could be threatened if a populist government blows Italy’s deficit commitments.
Most worrying to financial markets is the two parties’ platform, unveiled last week.
It includes a rollback on pension reform, a minimum salary for struggling Italians and the introduction of a flat tax, which will contribute to a large fiscal expansion that economists and EU policymakers worry will increase the country’s debt burden.
The programme also introduces a tougher stance on deporting migrants and calls for a better dialogue with Russia on economic and foreign policy matters while maintaining its trans-Atlantic alliance.
Mr Di Maio assured his voters that the government would find the money to pay for social programmes and tax cuts both through investments and in upcoming negotiations in Brussels on the European Union’s seven-year budget cycle, but neither the markets nor European partners have been assuaged.
A 5-Star-League government would have a very thin majority of just over 50% of parliamentary seats.
Mr Salvini ran in the election as part of a right-wing coalition including Silvio Berlusconi’s Forza Italia, but Mr Berlusconi opposes the 5-Stars and says he will not support them in a confidence vote.