ITALY’S ANTI-ESTABLISHMENT Five Star Movement and the centre-left Democratic Party clinched a deal today to form a new government and stave off elections.

Five Star (M5S) said the coalition would be led by outgoing prime minister Giuseppe Conte, who had resigned following the collapse of the populist government earlier this month.

The deal between two historic enemies is set to bring to an end what Italian newspapers have dubbed “the craziest crisis ever”.

M5S head Luigi Di Maio told journalists at the presidential palace in Rome that the endorsement of Conte by US President Donald Trump “had shown us we were on the right path”.

The parties had been bickering over whether Conte — a soft-spoken former academic chosen as a compromise prime minister last year — should lead a new coalition or whether a fresh face would better signal a fresh start.

Di Maio has warned however that any deal with the Democratic Party (PD) would still have to be approved by party members in an online vote.

Pivotal online vote 

The clock has been ticking to ease the political turmoil, with Italy – which is grappling with a huge debt mountain — under pressure to approve a budget in the coming months.

If it fails to do so, it could face an automatic rise in value-added tax that would hit the poorest families the hardest and could plunge the debt-laden country into recession.

Had the PD and M5S been unable to form a solid majority, the president would likely have called an early election for November.

Far-right leader Matteo Salvini, who triggered the crisis earlier in August when he withdrew his League party from the governing coalition with M5S, said the new set-up was fragile and unlikely to last.

- © AFP 2019