After a seesaw week that spooked financial markets, Italy’s president on Thursday gave a green light to a government of populist parties that would put Europe’s fourth largest economy into the hands of leaders deeply antagonistic to the European Union, its currency and illegal migrants.
Only days ago, President Sergio Mattarella of Italy rejected a populist government over concerns about a key minister who had suggested he wants to withdraw Italy from the group of countries that use the euro, Europe’s single currency. The chaotic consequences of such a move — even if remote — alarmed many investors and resurrected fears about a possible fracturing of the European Union.
On Thursday evening, the party leaders presented the president with a reshuffled cabinet that would make it difficult for Mr. Mattarella to reject them a second time. The new government still needs to win a confidence vote in Parliament, but at this stage that was a formality.
But the newly constituted government, of the anti-establishment Five Star Movement and the anti-immigrant League, still left open the question of whether the reaction of financial markets to Italy’s political chaos this week had chastened them, or whether it simply had led them to disguise their hostility as the price of admission into power.
Populist leaders in Europe and across the Atlantic looked on with delight as they gained a powerful ally in the heart of Western Europe. European leaders in Brussels, already worried about Poland and Hungary, now fear a threat to European unity from within its core.
The League and Five Star both want to renegotiate treaties on budgets, migration and a range of other issues with the European Union. They also want to lift sanctions against Russia and for Italy to move closer to its president, Vladimir V. Putin, who once said he didn’t need to meddle in the Italian elections because it was all going his way.
“I will read the composition of the government,” Giuseppe Conte, who will be sworn in Friday as prime minister with the rest of his cabinet, said late Thursday night.
He then read out the list of cabinet members, saying that the leaders of Italy’s populist alliance, Luigi Di Maio of the Five Star Movement and Matteo Salvini of the League, would be at his side.
“We will work intensely” to implement the alliance’s electoral program and “with determination to improve the quality of life of all Italians,” he said.