Libyan strongman Khalifa Haftar whose forces have been battling to capture the seat of the UN-recognized government in Tripoli since April, said he was open to "dialogue" ahead of a special UN session Thursday.

His forces are fighting those of the internationally recognized Government of National Accord (GNA), led by Prime Minister Fayez al-Sarraj, in a country that has been plagued by violence since Libyan dictator Moamer Kadhafi was killed in 2011.

"When all is said and done, we need dialogue, and we need to sit down" at the negotiating table, Haftar said in a statement issued Wednesday night.

Hours later, France and Italy brought together the conflict's regional actors in a special Thursday session on the sidelines of the UN General Assembly in New York.

Their mission: to unify the international community and coalesce around the best way out of the conflict.

Sarraj is backed by Turkey and Qatar, the latter of which was absent from the table. Haftar's allies, the UAE and Egypt, sat on the other side, as the small diplomatic gathering got underway.

The idea was to organize "political pressure on the main actors supporting each (Libyan) faction so that they might conclude that it's time to stop the military competition game and proxy war," a European diplomat said on condition of anonymity.

'No military solution'

Haftar's Wednesday declaration was seen as a positive sign after his faction declared only weeks prior that a "military solution" was the only way out.

Haftar's self-styled Libyan National Army launched an offensive on April 4 to conquer the seat of Sarraj's government in Tripoli, and purge it of "terrorist groups."

The violence has killed more than 1,000 people according to the UN, and has seen the two sides become entrenched in a stalemate on the capital's southern outskirts.

Haftar has repeatedly hammered home that dialogue would "not be possible so long as terrorist groups and criminal militias control&nbsp;, Tripoli" in reference to forces loyal to the GNA.

But he hoped the UN meeting would lead to proposals that help "restore security and stability" in Libya.

French Foreign Minister Jean-Yves Le Drian, criticized for his support of Haftar before the Tripoli offensive, did not mince words.

"There will be no military solution in Libya. Those who think otherwise are wrong and risk dragging this country into a dramatic downward slide," he said ahead of the meeting, which was co-chaired by his Italian counterpart Luigi Di Maio.

'Africa has expertise'&nbsp;

Paris is particularly worried about the risk of an Islamic State insurgency in southern Libya.

The goal is for an agreement on four points: respect for a cease-fire, an arms embargo, sharing of oil resources, and organization of an inter-Libyan conference.

An international conference would gather the conflict's actors and their allies in Berlin, according to a plan proposed by UN envoy to Libya Ghassan Salame.

Countries in North Africa's Sahel region have been hit hard by the shockwaves and fallout from the Libyan crisis, and have taken a greater role in the African Union's efforts to settle the conflict.

Regional leaders called this week for the appointment of a joint UN-AU special envoy.

"Africa has expertise which has just been confirmed in the Sudan crisis," Mahamadou Issoufou, president of Niger, said.

"Libya is on the African continent, Libya is African, we cannot solve the Libyan problem by leaving the AU at the margin," he said.

Libyan strongman Khalifa Haftar whose forces have been battling to capture the seat of the UN-recognized government in Tripoli since April, said he was open to "dialogue" ahead of a special UN session Thursday.

Libyan strongman Khalifa Haftar whose forces have been battling to capture the seat of the UN-recognized government in Tripoli since April, said he was open to "dialogue" ahead of a special UN session Thursday. His forces are fighting those of the internationally recognized Government of National Accord (GNA), led by Prime Minister Fayez al-Sarraj, in a country that has been plagued by violence since Libyan dictator Moamer Kadhafi was killed in 2011. "When all is said and done, we need dialogue, and we need to sit down" at the negotiating table, Haftar said in a statement issued Wednesday night. Hours later, France and Italy brought together the conflict's regional actors in a special Thursday session on the sidelines of the UN General Assembly in New York. Their mission: to unify the international community and coalesce around the best way out of the conflict. Sarraj is backed by Turkey and Qatar, the latter of which was absent from the table. Haftar's allies, the UAE and Egypt, sat on the other side, as the small diplomatic gathering got underway. The idea was to organize "political pressure on the main actors supporting each (Libyan) faction so that they might conclude that it's time to stop the military competition game and proxy war," a European diplomat said on condition of anonymity. 'No military solution' Haftar's Wednesday declaration was seen as a positive sign after his faction declared only weeks prior that a "military solution" was the only way out. Haftar's self-styled Libyan National Army launched an offensive on April 4 to conquer the seat of Sarraj's government in Tripoli, and purge it of "terrorist groups." The violence has killed more than 1,000 people according to the UN, and has seen the two sides become entrenched in a stalemate on the capital's southern outskirts. Haftar has repeatedly hammered home that dialogue would "not be possible so long as terrorist groups and criminal militias control , Tripoli" in reference to forces loyal to the GNA. But he hoped the UN meeting would lead to proposals that help "restore security and stability" in Libya. French Foreign Minister Jean-Yves Le Drian, criticized for his support of Haftar before the Tripoli offensive, did not mince words. "There will be no military solution in Libya. Those who think otherwise are wrong and risk dragging this country into a dramatic downward slide," he said ahead of the meeting, which was co-chaired by his Italian counterpart Luigi Di Maio. 'Africa has expertise' Paris is particularly worried about the risk of an Islamic State insurgency in southern Libya. The goal is for an agreement on four points: respect for a cease-fire, an arms embargo, sharing of oil resources, and organization of an inter-Libyan conference. An international conference would gather the conflict's actors and their allies in Berlin, according to a plan proposed by UN envoy to Libya Ghassan Salame. Countries in North Africa's Sahel region have been hit hard by the shockwaves and fallout from the Libyan crisis, and have taken a greater role in the African Union's efforts to settle the conflict. Regional leaders called this week for the appointment of a joint UN-AU special envoy. "Africa has expertise which has just been confirmed in the Sudan crisis," Mahamadou Issoufou, president of Niger, said. "Libya is on the African continent, Libya is African, we cannot solve the Libyan problem by leaving the AU at the margin," he said.

Haftar ready for 'dialogue' as UN pressures Libya's warring factions

Opposition leader Nicola Zingaretti told Italy's president on Wednesday that his Democratic Party (PD) was ready to try to form a government with the anti-establishment 5-Star Movement.

Opposition leader Nicola Zingaretti told Italy's president on Wednesday that his Democratic Party (PD) was ready to try to form a government with the anti-establishment 5-Star Movement. Speaking after talks with President Sergio Mattarella, Zingaretti told reporters his party was also ready to accept the 5-Star candidate for prime minister -- the current premier Giuseppe Conte. "We love Italy and we consider it worthwhile to try this experience," said Zingaretti. "In difficult times like these, shunning our responsibility to have the courage to try this is something we cannot afford." The two parties have been inching towards forming a coalition despite years of mutual hostility, as they sought to avoid snap elections that could favour the hard-right League party. Its leader Matteo Salvini collapsed the previous coalition alliance with 5-Star earlier this month after prolonged infighting. The prospect of a new government led by Conte, an academic who has no political affiliation but is considered close to the 5-Star, has buoyed markets, which are betting that Italy will avoid snap elections. Italy's 10-year bond yield fell to a record low below 1%, two-year bond yields fell to their lowest since May 2018 at -0.22% and Italy's 50-year bond yield fell to a record low around 2.266%. Investors fear early elections would be won by Salvini's hard-right League party, which could put Rome on a collision course with the European Union over expansionary government spending.

Italy opposition says it is ready for cabinet deal with 5-Star

Far-right Interior Minister <a href="https://www.wionews.com/world/italy-government-wins-a-confidence-vote-on-decree-targeting-migrant-rescue-ships-241066">Matteo Salvini pulled his support for Italy's governing coalition</a> on Thursday and called for snap elections, prompting the country's premier to demand that he "justify" his decision to provoke a political crisis. &nbsp;

Salvini, whose hardline League Party has already called for snap polls, has clashed with his fellow Deputy Prime Minister Luigi di Maio of the anti-establishment Five Star Movement (M5S) party over a range of policies.

He stepped up the pressure on Thursday, saying there was no longer a majority to support a government and calling for new elections.

"Let's go straight to parliament to say there is no longer a majority... and quickly go back to the voters," Salvini said.

Prime Minister Giuseppe Conte, who had held separate talks with Salvini and the country's President Sergio Mattarella as the crisis deepened, said in a statement later that the interior minister doesn't summon parliament and "it's not up to him to dictate the steps of the political crisis."

Conte called on Salvini "to explain to the country and justify to the electorate, who believed in the possibility of change, the reasons that brought him to abruptly interrupt" the activities of the government. &nbsp;

Both houses of parliament are currently on recess for the holidays and are not due back until September.

Long-rumbling tensions between the 14-month-old coalition's populist leaders have peaked in recent days, with the row centred on the financing of a multi-billion-euro high-speed train line.

Shifting political sands

An early election may benefit Salvini, with recent opinion polls putting his League party ahead, leaving open the possibility that it could govern in alliance with another, a smaller far-right party, Fratelli d'Italia.

That reflects the inversion in the popularity of the coalition partners, which came to power in June 2018 after an election that saw M5S take 32 per cent of the vote, while the League scored 17 per cent.

In the European election in May this year, however, the League took the most votes in Italy with 34 per cent. M5S received around 17 per cent.&nbsp;

The partnership, which has been rocked by ongoing spats, has appeared to sour further in recent weeks.

Italian media has reported that Salvini, in earlier talks with Conte, set conditions for staying in the coalition -- including the resignation of the transport, defence and economy ministers, who have resisted his projects and policies.

"The League and M5S have been diverging in their vision for too long, on matters that are fundamental for the country," the League said in its statement on Thursday.

"This government's only option is to let Italians have their say" by calling elections, it added.

Salvini on Thursday denounced "repeated insults against me and the League by supposed allies".&nbsp;

Later at a meeting in the central coastal city of Pescara, he set a campaigning tone.

"We are told that we cannot reduce taxes. We will prove if you give us the power to do so, that it is possible to reduce taxes on Italian workers," Salvini told supporters.&nbsp;

Snap elections?

For his part, Di Maio said that his M5S party "is ready" to return to the polls.&nbsp;

The opposition has also called on the government to resign, arguing it no longer has a workable majority in parliament after Di Maio voted against the Lyon-Turin rail project, which involves an 8.6-billion-euro ($9.8-billion) tunnel through the Alps.

But President Mattarella, who has the sole power to dissolve parliament, has insisted there must be a government in place to finalise the budget, a first draft of which has to be submitted to EU authorities by the end of September.

The government is struggling to rein in its public deficit and its mammoth debt mountain of more than 2.3 trillion euros.

Italian news agency AIG on Thursday said that the Senate could convene as early as August 20 in order to declare the end of the government, with the dissolution of parliament possible in the following days.&nbsp;

According to Italy's constitution, new elections would then have to be held within 50 to 70 days.

Far-right Interior Minister Matteo Salvini pulled his support for Italy's governing coalition on Thursday and called for snap elections, prompting the country's premier to demand that he "justify" his decision to provoke a political crisis.

Far-right Interior Minister Matteo Salvini pulled his support for Italy's governing coalition on Thursday and called for snap elections, prompting the country's premier to demand that he "justify" his decision to provoke a political crisis. Salvini, whose hardline League Party has already called for snap polls, has clashed with his fellow Deputy Prime Minister Luigi di Maio of the anti-establishment Five Star Movement (M5S) party over a range of policies. He stepped up the pressure on Thursday, saying there was no longer a majority to support a government and calling for new elections. "Let's go straight to parliament to say there is no longer a majority... and quickly go back to the voters," Salvini said. Prime Minister Giuseppe Conte, who had held separate talks with Salvini and the country's President Sergio Mattarella as the crisis deepened, said in a statement later that the interior minister doesn't summon parliament and "it's not up to him to dictate the steps of the political crisis." Conte called on Salvini "to explain to the country and justify to the electorate, who believed in the possibility of change, the reasons that brought him to abruptly interrupt" the activities of the government. Both houses of parliament are currently on recess for the holidays and are not due back until September. Long-rumbling tensions between the 14-month-old coalition's populist leaders have peaked in recent days, with the row centred on the financing of a multi-billion-euro high-speed train line. Shifting political sands An early election may benefit Salvini, with recent opinion polls putting his League party ahead, leaving open the possibility that it could govern in alliance with another, a smaller far-right party, Fratelli d'Italia. That reflects the inversion in the popularity of the coalition partners, which came to power in June 2018 after an election that saw M5S take 32 per cent of the vote, while the League scored 17 per cent. In the European election in May this year, however, the League took the most votes in Italy with 34 per cent. M5S received around 17 per cent. The partnership, which has been rocked by ongoing spats, has appeared to sour further in recent weeks. Italian media has reported that Salvini, in earlier talks with Conte, set conditions for staying in the coalition -- including the resignation of the transport, defence and economy ministers, who have resisted his projects and policies. "The League and M5S have been diverging in their vision for too long, on matters that are fundamental for the country," the League said in its statement on Thursday. "This government's only option is to let Italians have their say" by calling elections, it added. Salvini on Thursday denounced "repeated insults against me and the League by supposed allies". Later at a meeting in the central coastal city of Pescara, he set a campaigning tone. "We are told that we cannot reduce taxes. We will prove if you give us the power to do so, that it is possible to reduce taxes on Italian workers," Salvini told supporters. Snap elections? For his part, Di Maio said that his M5S party "is ready" to return to the polls. The opposition has also called on the government to resign, arguing it no longer has a workable majority in parliament after Di Maio voted against the Lyon-Turin rail project, which involves an 8.6-billion-euro ($9.8-billion) tunnel through the Alps. But President Mattarella, who has the sole power to dissolve parliament, has insisted there must be a government in place to finalise the budget, a first draft of which has to be submitted to EU authorities by the end of September. The government is struggling to rein in its public deficit and its mammoth debt mountain of more than 2.3 trillion euros. Italian news agency AIG on Thursday said that the Senate could convene as early as August 20 in order to declare the end of the government, with the dissolution of parliament possible in the following days. According to Italy's constitution, new elections would then have to be held within 50 to 70 days.

Interior minister Matteo Salvini pulls support for Italian coalition, calls for snap polls

Italy's government, formed by the 5-Star Movement and the League party, will not fall as it is "the only possible one", <a href="https://www.wionews.com/world/italys-new-government-will-overhaul-renzi-labour-reform-minister-says-141946">Deputy Prime Minister Luigi Di Maio</a> told the daily Il Corriere Della Sera in an interview published on Thursday.

Di Maio, who is also the 5-Stars' leader, said the party would never form an alternative majority with the centre-left PD party.

In a separate interview with the paper, Matteo Salvini, the other deputy prime minister and League leader, said there was still time to dissolve parliament and go to elections after the summer break, but that it was up to 5-Stars to decide whether Rome's populist government would survive.

Italy's government, formed by the 5-Star Movement and the League party, will not fall as it is "the only possible one", Deputy Prime Minister Luigi Di Maio told the daily Il Corriere Della Sera in an interview published on Thursday.

Italy's government, formed by the 5-Star Movement and the League party, will not fall as it is "the only possible one", Deputy Prime Minister Luigi Di Maio told the daily Il Corriere Della Sera in an interview published on Thursday. Di Maio, who is also the 5-Stars' leader, said the party would never form an alternative majority with the centre-left PD party. In a separate interview with the paper, Matteo Salvini, the other deputy prime minister and League leader, said there was still time to dissolve parliament and go to elections after the summer break, but that it was up to 5-Stars to decide whether Rome's populist government would survive.

Italy's Di Maio says government to survive, rules out alternative majority: Paper

What was once Europe's biggest <a href="https://www.wionews.com/world/nearly-40-killed-in-air-strike-on-libya-migrant-centre-232617">migrant reception centre</a>, in Mineo in Sicily, is to officially close on Tuesday in the presence of its biggest critic, far-right Interior Minister Matteo Salvini.&nbsp;

"Promise kept," Salvini said last week when the centre's final inhabitants were removed, to be sent to another centre in Calabria.

This reception centre, a former housing complex for the <a href="https://www.wionews.com/world/iran-claims-shooting-down-american-drone-us-military-declines-to-comment-228857">US military</a> that resembles an American suburb, is now guarded by Italian troops who block access under a roasting Sicilian sun.

At its peak in 2014, Mineo housed more than 4,100 people.

Its population then steadily dropped. When anti-migrant Salvini and the populist Five Star Movement came to power in June last year, it housed 2,500.&nbsp;

Since then Salvini, who is also deputy prime minister, has declared war on charity rescue vessels, barring their entry to Italian ports in recent weeks. Thousands of migrants nevertheless continue to arrive by their means or are rescued by the Italian authorities.

Psychologist Massimiliano Terrasi stood amid the arid countryside outside the centre where he worked since 2011, disappointed at what he said could have been.

"Hopes were high when the centre first opened and we grew professionally," he told AFP-TV.

"Well managed, it could have been an asset for the area and people's mutual understanding," he lamented, voicing anger at the abrupt end to his years of work, final wages still unpaid.

In the beginning, care and hygiene conditions were decent, he said. But things started to deteriorate when the population went over 3,000.

"If you look at how the centre was in the end, it's a good thing that it closed. But if you think what it could have been, it's a pity," he said.

Built 'on numbers'&nbsp;

Resident Sergio Mastrilli was more critical, as he drank a beer on a Mineo bar terrace.

"When the centre first opened, I immediately thought it wasn't a good thing," he said.

"It wasn't a reception centre built on integration but numbers."

Mastrilli, a 25-year-old law student, is a supporter of Luigi di Maio's anti-establishment Five Star Movement, which is in a ruling coalition with Salvini's Lega for the last 13 months.

"There were more than 4,000 people from 85 different ethnicity, while Mineo has around 5,000 inhabitants," he said.

He called for a Europe-wide solution to migration and suggested "many migrants would like to stay in their own countries" if they could.

The centre's 400 small yellow and pink houses lie in tidy rows, a reminder of the time when US families from the neighbouring base at Sigonella called it home.

But the US military gave up its lease in 2010, and the arrival of the reception centre and migrants made Sicilians in the area both worried and jealous.

The migrants were notably prepared to work for 10 or 20 euros (11-22 dollars) a day during the orange harvest, angering locals who could not work for so little.

'A big illusion'&nbsp;

But the centre also employed 400 people in the area, and Mineo's current mayor, Giuseppe Mistretta, has threatened to resign if the state does not help with the post-migrant transition.

"Mineo's closure is the inexorable epilogue of a big illusion, in a region starved of jobs," said Sicily's conservative regional president Nello Musumeci.

Several judicial probes are currently underway, implicating notably Mineo's former mayor and the centre's former director.&nbsp;

Allegations include preferential awarding of contracts, and the exaggeration of migrant numbers to attract state subsidies that accompanied each new arrival.

In January, police broke up a Nigerian organised crime drug dealing group based within the centre, and a prostitution ring.

What was once Europe's biggest migrant reception centre, in Mineo in Sicily, is to officially close on Tuesday in the presence of its biggest critic, far-right Interior Minister Matteo Salvini.

What was once Europe's biggest migrant reception centre, in Mineo in Sicily, is to officially close on Tuesday in the presence of its biggest critic, far-right Interior Minister Matteo Salvini. "Promise kept," Salvini said last week when the centre's final inhabitants were removed, to be sent to another centre in Calabria. This reception centre, a former housing complex for the US military that resembles an American suburb, is now guarded by Italian troops who block access under a roasting Sicilian sun. At its peak in 2014, Mineo housed more than 4,100 people. Its population then steadily dropped. When anti-migrant Salvini and the populist Five Star Movement came to power in June last year, it housed 2,500. Since then Salvini, who is also deputy prime minister, has declared war on charity rescue vessels, barring their entry to Italian ports in recent weeks. Thousands of migrants nevertheless continue to arrive by their means or are rescued by the Italian authorities. Psychologist Massimiliano Terrasi stood amid the arid countryside outside the centre where he worked since 2011, disappointed at what he said could have been. "Hopes were high when the centre first opened and we grew professionally," he told AFP-TV. "Well managed, it could have been an asset for the area and people's mutual understanding," he lamented, voicing anger at the abrupt end to his years of work, final wages still unpaid. In the beginning, care and hygiene conditions were decent, he said. But things started to deteriorate when the population went over 3,000. "If you look at how the centre was in the end, it's a good thing that it closed. But if you think what it could have been, it's a pity," he said. Built 'on numbers' Resident Sergio Mastrilli was more critical, as he drank a beer on a Mineo bar terrace. "When the centre first opened, I immediately thought it wasn't a good thing," he said. "It wasn't a reception centre built on integration but numbers." Mastrilli, a 25-year-old law student, is a supporter of Luigi di Maio's anti-establishment Five Star Movement, which is in a ruling coalition with Salvini's Lega for the last 13 months. "There were more than 4,000 people from 85 different ethnicity, while Mineo has around 5,000 inhabitants," he said. He called for a Europe-wide solution to migration and suggested "many migrants would like to stay in their own countries" if they could. The centre's 400 small yellow and pink houses lie in tidy rows, a reminder of the time when US families from the neighbouring base at Sigonella called it home. But the US military gave up its lease in 2010, and the arrival of the reception centre and migrants made Sicilians in the area both worried and jealous. The migrants were notably prepared to work for 10 or 20 euros (11-22 dollars) a day during the orange harvest, angering locals who could not work for so little. 'A big illusion' But the centre also employed 400 people in the area, and Mineo's current mayor, Giuseppe Mistretta, has threatened to resign if the state does not help with the post-migrant transition. "Mineo's closure is the inexorable epilogue of a big illusion, in a region starved of jobs," said Sicily's conservative regional president Nello Musumeci. Several judicial probes are currently underway, implicating notably Mineo's former mayor and the centre's former director. Allegations include preferential awarding of contracts, and the exaggeration of migrant numbers to attract state subsidies that accompanied each new arrival. In January, police broke up a Nigerian organised crime drug dealing group based within the centre, and a prostitution ring.

Europe's once biggest migrant centre to close in Italy

Italy signed a preliminary accord with China on Saturday that makes it the first country of the Group of Seven industrialised nation to join the Chinese Belt and Road infrastructure project.

Around 30 parallel deals were signed on the sidelines of the visit to Rome by <a href="https://www.wionews.com/world/xi-jinping-giuseppe-conte-hold-talks-on-elevating-china-italy-ties-into-new-era-205190">Chinese President Xi Jinping</a>, including 10 with Italian companies and others with ministries and public bodies.

Italian Deputy Prime Minister Luigi Di Maio said the deals were worth an initial 2.5 billion euros but had a potential value of 20 billion.

Here are details of some of the accords.

CDP, BANK OF CHINA

Italy's state lender Cassa Depositi e Prestiti (CDP) signed an agreement with Bank of China to let it sell "Panda" bonds - debt sold by foreign entities to investors in mainland China.

CDP said it will issue bonds worth $744.5 million. CDP and Bank of China will also co-finance Italian companies for 4 billion renminbi. A CDP official told Reuters on Friday that the first tranche of Panda bonds will be issued in the coming weeks.

CDP, SNAM

CDP and Italian gas company Snam have signed a memorandum of understanding with the Chinese Silk Road fund (SRF) for cooperation on international investments in China and in the about 120 countries that have already signed up for the Belt and Road Initiative (BRI).

Snam and SRF said they will consider possible cooperation in the natural gas sector -- pipelines, storage facilities, LNG infrastructure and biomethane plants.

DANIELI

Italian metals company Danieli has signed a deal to build part of a steel plant in China that will then be transferred to Azerbaijan.

TRIESTE AND GENOA PORTS 

China Communications Construction Company (CCCC) has signed two cooperation agreements with the authorities of Trieste's port and with the commissioner supervising the reconstruction of the bridge of Genoa that collapsed last year.

ANSALDO ENERGIA

Ansaldo Energia said it signed a deal with China United Gas Turbine Company (UGTC) for technology cooperation in the field of heavy duty gas turbines.

Ansaldo Energia has also been awarded a contract worth approximately 25 million euros to supply a AE94.2K gas turbine and syngas compressor train for Bengang combined cycle power plant, located in Benxi in northeast China.

SUNING

China's e-commerce group Suning, top shareholder of Italian Serie A soccer team Inter Milan, announced a deal with the Italian Trade Agency to boost Made-in-Italy exports to China.

INTESA SANPAOLO

Intesa Sanpaolo has signed a MoU with the Chinese city of Chindao to develop wealth management services for local clients through a wholly-owned company called Yi Tsai. Intesa aimed to sell its own financial products in Chindao in the near future, Intesa CEO Carlo Messina said.

ENI

Italian energy giant Eni has signed a MoU with Bank of China to secure a credit line.

FERROVIE DELLO STATO, AEROPORTI DI ROMA

Italy's railways group Ferrovie dello Stato, Atlantia's airport operator Aeroporti di Roma and the museums of sports car maker Ferrari have signed a commercial deal with China's biggest online travel agency Ctrip to develop Chinese tourism in Italy.

Italy signed a preliminary accord with China on Saturday that makes it the first country of the Group of Seven industrialised nation to join the Chinese Belt and Road infrastructure project.

Italy signed a preliminary accord with China on Saturday that makes it the first country of the Group of Seven industrialised nation to join the Chinese Belt and Road infrastructure project. Around 30 parallel deals were signed on the sidelines of the visit to Rome by Chinese President Xi Jinping, including 10 with Italian companies and others with ministries and public bodies. Italian Deputy Prime Minister Luigi Di Maio said the deals were worth an initial 2.5 billion euros but had a potential value of 20 billion. Here are details of some of the accords. CDP, BANK OF CHINA Italy's state lender Cassa Depositi e Prestiti (CDP) signed an agreement with Bank of China to let it sell "Panda" bonds - debt sold by foreign entities to investors in mainland China. CDP said it will issue bonds worth $744.5 million. CDP and Bank of China will also co-finance Italian companies for 4 billion renminbi. A CDP official told Reuters on Friday that the first tranche of Panda bonds will be issued in the coming weeks. CDP, SNAM CDP and Italian gas company Snam have signed a memorandum of understanding with the Chinese Silk Road fund (SRF) for cooperation on international investments in China and in the about 120 countries that have already signed up for the Belt and Road Initiative (BRI). Snam and SRF said they will consider possible cooperation in the natural gas sector -- pipelines, storage facilities, LNG infrastructure and biomethane plants. DANIELI Italian metals company Danieli has signed a deal to build part of a steel plant in China that will then be transferred to Azerbaijan. TRIESTE AND GENOA PORTS China Communications Construction Company (CCCC) has signed two cooperation agreements with the authorities of Trieste's port and with the commissioner supervising the reconstruction of the bridge of Genoa that collapsed last year. ANSALDO ENERGIA Ansaldo Energia said it signed a deal with China United Gas Turbine Company (UGTC) for technology cooperation in the field of heavy duty gas turbines. Ansaldo Energia has also been awarded a contract worth approximately 25 million euros to supply a AE94.2K gas turbine and syngas compressor train for Bengang combined cycle power plant, located in Benxi in northeast China. SUNING China's e-commerce group Suning, top shareholder of Italian Serie A soccer team Inter Milan, announced a deal with the Italian Trade Agency to boost Made-in-Italy exports to China. INTESA SANPAOLO Intesa Sanpaolo has signed a MoU with the Chinese city of Chindao to develop wealth management services for local clients through a wholly-owned company called Yi Tsai. Intesa aimed to sell its own financial products in Chindao in the near future, Intesa CEO Carlo Messina said. ENI Italian energy giant Eni has signed a MoU with Bank of China to secure a credit line. FERROVIE DELLO STATO, AEROPORTI DI ROMA Italy's railways group Ferrovie dello Stato, Atlantia's airport operator Aeroporti di Roma and the museums of sports car maker Ferrari have signed a commercial deal with China's biggest online travel agency Ctrip to develop Chinese tourism in Italy.

Italy signs deals worth 2.5 billion euros with China

France took the exceptional step of recalling its envoy to Rome on Thursday to protest against a "provocation" from the Italian government, laying bare the tensions between the two historic allies.

France's foreign ministry recalled its ambassador to Rome for consultations over a series of comments from Italy's two deputy prime ministers, Luigi Di Maio and Matteo Salvini.

"For several months France has been the subject of repeated accusations, unfounded attacks and outlandish claims," the ministry said in a statement, calling them "unprecedented" since the end of World War II.

Di Maio and Salvini, who formed a populist coalition government together last year, have repeatedly criticised Macron, who has in turn targeted their eurosceptic movements ahead of high-stakes European Parliament elections in May.

The latest spat erupted Tuesday after Di Maio, head of the anti-establishment Five Star Movement, revealed that he had met with "yellow vest" anti-government protesters outside Paris.

He said the aim was to prepare a common front for European Parliament elections in May, while boasting on Twitter that "the wind of change has crossed the Alps."

"The most recent interferences constitute an additional and unacceptable provocation," the foreign ministry said.

'Terrible president?' 
The remarkable war of words between two founding members of the EU began shortly after the Five Star Movement and Salvini's far-right League parties won Italian elections and formed a coalition government last June.

Macron blasted the new government's "cynicism and irresponsibility" after it began preventing rescue boats with migrants on board from docking at Italian ports and compared the rise of far-right nationalism to leprosy.

The verbal sparring has only intensified since, with Salvini calling Macron a "terrible president" last month in a Facebook video.

"We don't want to row with anyone," Salvini said on Thursday in a statement."We're not interested in controversies: we are serious people and we are defending Italian interests."

He called for the two countries to find a solution to problems which have caused tensions, including French border controls on the Italian border and demands by Rome for the extradition of far-left Italian militants who live in France.

Salvini and De Maio angered Macron in particular by publicly supporting the "yellow vest" protesters who have taken to the streets to denounce high living costs and a perceived indifference by the government to rural and small-town France.

Di Maio had denounced the French government for protecting the elite and the privileged, saying "a new Europe is being born of the 'yellow vests', of movements, of direct democracy."

Last month, Paris summoned Italy's ambassador to protest Di Maio's accusation that France was encouraging immigration to Europe "because European countries, France above all, have never stopped colonising dozens of African countries."

Salvini poured fuel on the fire last month as well, saying in a Facebook video that "I hope the French will be able to free themselves of a terrible president."

"The opportunity will come on May 26 (the European elections) when finally the French people will be able to take back control of their future, destiny, (and) pride, which are poorly represented by a character like Macron", he said.

France took the exceptional step of recalling its envoy to Rome on Thursday to protest against a "provocation" from the Italian government, laying bare the tensions between the two historic allies.

France took the exceptional step of recalling its envoy to Rome on Thursday to protest against a "provocation" from the Italian government, laying bare the tensions between the two historic allies. France's foreign ministry recalled its ambassador to Rome for consultations over a series of comments from Italy's two deputy prime ministers, Luigi Di Maio and Matteo Salvini. "For several months France has been the subject of repeated accusations, unfounded attacks and outlandish claims," the ministry said in a statement, calling them "unprecedented" since the end of World War II. Di Maio and Salvini, who formed a populist coalition government together last year, have repeatedly criticised Macron, who has in turn targeted their eurosceptic movements ahead of high-stakes European Parliament elections in May. The latest spat erupted Tuesday after Di Maio, head of the anti-establishment Five Star Movement, revealed that he had met with "yellow vest" anti-government protesters outside Paris. He said the aim was to prepare a common front for European Parliament elections in May, while boasting on Twitter that "the wind of change has crossed the Alps." "The most recent interferences constitute an additional and unacceptable provocation," the foreign ministry said. 'Terrible president?' The remarkable war of words between two founding members of the EU began shortly after the Five Star Movement and Salvini's far-right League parties won Italian elections and formed a coalition government last June. Macron blasted the new government's "cynicism and irresponsibility" after it began preventing rescue boats with migrants on board from docking at Italian ports and compared the rise of far-right nationalism to leprosy. The verbal sparring has only intensified since, with Salvini calling Macron a "terrible president" last month in a Facebook video. "We don't want to row with anyone," Salvini said on Thursday in a statement."We're not interested in controversies: we are serious people and we are defending Italian interests." He called for the two countries to find a solution to problems which have caused tensions, including French border controls on the Italian border and demands by Rome for the extradition of far-left Italian militants who live in France. Salvini and De Maio angered Macron in particular by publicly supporting the "yellow vest" protesters who have taken to the streets to denounce high living costs and a perceived indifference by the government to rural and small-town France. Di Maio had denounced the French government for protecting the elite and the privileged, saying "a new Europe is being born of the 'yellow vests', of movements, of direct democracy." Last month, Paris summoned Italy's ambassador to protest Di Maio's accusation that France was encouraging immigration to Europe "because European countries, France above all, have never stopped colonising dozens of African countries." Salvini poured fuel on the fire last month as well, saying in a Facebook video that "I hope the French will be able to free themselves of a terrible president." "The opportunity will come on May 26 (the European elections) when finally the French people will be able to take back control of their future, destiny, (and) pride, which are poorly represented by a character like Macron", he said.

France recalls Italy envoy as relations plumb new depths

The Italian Senate on Wednesday cleared the way for far-right leader Matteo Salvini's tough anti-migrant and security decree to become law following a confidence vote.

The populist government of Salvini's League and Luigi Di Maio’s anti-establishment Five Star Movement (M5S) won the vote with 163 senators for, 59 against and 19 abstentions, including five M5S members opposed to the stringent decree.

The lower house of parliament now has until the end of November to approve the decree, which the coalition first put forward in September and makes it easier to expel migrants and strip them of Italian citizenship.

"Salvini decree, an historic day," Salvini tweeted after the Senate vote.

The government opted for a confidence vote to get the decree through the senate after M5S members tabled a slew of amendments. It should have no problem passing the lower house given the coalition's majority.

The decree seeks to radically reduce the number of migrants receiving "humanitarian protection" -- a lower level of asylum status that is based on Italian rather than international law -- that was awarded to 25 per cent of asylum seekers last year.

It will now be awarded based on six strict criteria, including whether there is an urgent medical need or if the applicant was the victim of a natural disaster, or if they had carried out "heroic acts" in Italy.

Of the 81,500 decisions handed down by Italian authorities in 2017, eight per cent were granted asylum, eight per cent subsidiary protection and a quarter humanitarian protection.

The remainder were rejected. If appeals fail, they face the prospect of being classed as economic migrants who must return home.

Those seeking refugee status will also now have their requests suspended if they are considered "socially dangerous or convicted in the first instance" of crimes, while their appeals are ongoing.

They will in future be housed in bigger reception centres, while only minors and those with recognised refugee status will be housed in different parts of the country in order to facilitate integration.

There are currently around 146,000 migrants held in reception centres, down from 183,000 at the end of 2017.

The Italian mayors' association has railed against the change, saying that having hundreds of unemployed migrants in reception centres can have a negative impact on small communities.

The new law also lets local police have Taser stun guns and makes it easier to evict squatters by getting rid of the obligation of finding provisional housing for the most vulnerable.

One of the most controversial measures in the bill provides for stripping immigrants of their Italian nationality if they are convicted of "terrorism".

Salvini, who is also deputy prime minister, has taken a hardline on immigration since the coalition came to power in June, refusing to allow several ships carrying migrants rescued in the Mediterranean to dock at Italian ports.

The Italian Senate on Wednesday cleared the way for far-right leader Matteo Salvini's tough anti-migrant and security decree to become law following a confidence vote.

The Italian Senate on Wednesday cleared the way for far-right leader Matteo Salvini's tough anti-migrant and security decree to become law following a confidence vote. The populist government of Salvini's League and Luigi Di Maio’s anti-establishment Five Star Movement (M5S) won the vote with 163 senators for, 59 against and 19 abstentions, including five M5S members opposed to the stringent decree. The lower house of parliament now has until the end of November to approve the decree, which the coalition first put forward in September and makes it easier to expel migrants and strip them of Italian citizenship. "Salvini decree, an historic day," Salvini tweeted after the Senate vote. The government opted for a confidence vote to get the decree through the senate after M5S members tabled a slew of amendments. It should have no problem passing the lower house given the coalition's majority. The decree seeks to radically reduce the number of migrants receiving "humanitarian protection" -- a lower level of asylum status that is based on Italian rather than international law -- that was awarded to 25 per cent of asylum seekers last year. It will now be awarded based on six strict criteria, including whether there is an urgent medical need or if the applicant was the victim of a natural disaster, or if they had carried out "heroic acts" in Italy. Of the 81,500 decisions handed down by Italian authorities in 2017, eight per cent were granted asylum, eight per cent subsidiary protection and a quarter humanitarian protection. The remainder were rejected. If appeals fail, they face the prospect of being classed as economic migrants who must return home. Those seeking refugee status will also now have their requests suspended if they are considered "socially dangerous or convicted in the first instance" of crimes, while their appeals are ongoing. They will in future be housed in bigger reception centres, while only minors and those with recognised refugee status will be housed in different parts of the country in order to facilitate integration. There are currently around 146,000 migrants held in reception centres, down from 183,000 at the end of 2017. The Italian mayors' association has railed against the change, saying that having hundreds of unemployed migrants in reception centres can have a negative impact on small communities. The new law also lets local police have Taser stun guns and makes it easier to evict squatters by getting rid of the obligation of finding provisional housing for the most vulnerable. One of the most controversial measures in the bill provides for stripping immigrants of their Italian nationality if they are convicted of "terrorism". Salvini, who is also deputy prime minister, has taken a hardline on immigration since the coalition came to power in June, refusing to allow several ships carrying migrants rescued in the Mediterranean to dock at Italian ports.

Italy Senate passes government's anti-migrant decree

Italy's new prime minister Giuseppe Conte mostly kept quiet on his full first day in office Saturday, while his two powerful deputies took centre stage in setting the tone of the populist government's policy.

Conte, a political novice, was finally sworn in on Friday as the head of a government of ministers from the anti-establishment Five Star Movement and the far-right League, ending months of uncertainty since elections in March.

But Conte was a compromise candidate between Five Star leader Luigi Di Maio and the League's Matteo Salvini -- both of whom are now his deputy prime ministers -- and he will have to walk a delicate line to push through the anti-austerity and pro-security promises their populist parties campaigned on.

The 53-year-old academic also inherited a daunting list of issues from his predecessor Paolo Gentiloni, including the financial travails of companies such as Ilva and Alitalia, a Group of Seven summit in Canada and a key EU summit at the end of the month, as well as the thorny question of immigration.

Immigration is the bugbear of Conte's interior minister, Salvini, the 45-year-old leader of the anti-immigrant, anti-Islam League.&nbsp

Salvini announced Friday that he would visit Sicily to see the situation for himself at one of the main landing points for refugees fleeing war, persecution and famine across North Africa and the Middle East.

"The good times for illegals is over -- get ready to pack your bags," Salvini said at a rally in Italy's north on Saturday, adding however that he wants to economically assist migrants' countries of origin.

His comments come after more than 150 migrants, including nine children, disembarked from a rescue ship late Friday in Sicily.

From today, the state is us

Conte attended a military parade alongside President Sergio Mattarella on Saturday, marking Republic Day for the foundation of the Italian Republic in 1946.

However the new prime minister has issued few public statements since being appointed.

On Saturday he did post on Facebook that he had spoken with German Chancellor Angela Merkel and French President Emmanuel Macron and would meet the two leaders at the G7 summit, where he will be a "spokesman for the interests of Italian citizens".

Conte has also opted to keep the country's intelligence services under his personal control.&nbsp

Deputy premier Di Maio, who is serving as economic development minister, also took to Facebook, calling for "entrepreneurs to be left alone".

"Employers and employees in Italy must not be enemies," he said, promising "I will not disappoint you".

On Saturday evening Five Star held a rally in the centre of Rome with thousands of supporters and all its ministers to celebrate "the government of change".

Di Maio told the crowd that "from today, the state is us".

Five Star's founder, former comic Beppe Grillo, rang a bell in front of the crowd, saying the sound "marks the fracture between a world that is going away and a new one that is arriving".

EU and the eurosceptics

The world will be carefully watching power relations between Conte and his two influential deputies -- particularly the European Union, given the eurosceptic government is the first populist coalition in a founding EU member.

EU Commission chief Jean-Claude Juncker called Saturday for Conte's new government to be treated with respect, having earlier sparked controversy by telling Italians to work harder and stop blaming the EU for the country's problems.&nbsp

"We should show respect towards Italy," Juncker said in an interview with the German press group Funke Mediengruppe.

Juncker said Italy must not suffer the same fate as thrice-bailed out Greece whose dignity was "trodden under foot" by its creditors when left-wing Prime Minister Alexis Tsipras took office in 2015.

"That must not happen again in the present case with Italy," Juncker said.

"Italians have a clear understanding of what is good for their country. They will sort it out."

Italy's new prime minister Giuseppe Conte mostly kept quiet on his full first day in office Saturday, while his two powerful deputies took centre stage in setting the tone of the populist government's policy

Italy's new prime minister Giuseppe Conte mostly kept quiet on his full first day in office Saturday, while his two powerful deputies took centre stage in setting the tone of the populist government's policy. Conte, a political novice, was finally sworn in on Friday as the head of a government of ministers from the anti-establishment Five Star Movement and the far-right League, ending months of uncertainty since elections in March. But Conte was a compromise candidate between Five Star leader Luigi Di Maio and the League's Matteo Salvini -- both of whom are now his deputy prime ministers -- and he will have to walk a delicate line to push through the anti-austerity and pro-security promises their populist parties campaigned on. The 53-year-old academic also inherited a daunting list of issues from his predecessor Paolo Gentiloni, including the financial travails of companies such as Ilva and Alitalia, a Group of Seven summit in Canada and a key EU summit at the end of the month, as well as the thorny question of immigration. Immigration is the bugbear of Conte's interior minister, Salvini, the 45-year-old leader of the anti-immigrant, anti-Islam League. Salvini announced Friday that he would visit Sicily to see the situation for himself at one of the main landing points for refugees fleeing war, persecution and famine across North Africa and the Middle East. "The good times for illegals is over -- get ready to pack your bags," Salvini said at a rally in Italy's north on Saturday, adding however that he wants to economically assist migrants' countries of origin. His comments come after more than 150 migrants, including nine children, disembarked from a rescue ship late Friday in Sicily. From today, the state is us Conte attended a military parade alongside President Sergio Mattarella on Saturday, marking Republic Day for the foundation of the Italian Republic in 1946. However the new prime minister has issued few public statements since being appointed. On Saturday he did post on Facebook that he had spoken with German Chancellor Angela Merkel and French President Emmanuel Macron and would meet the two leaders at the G7 summit, where he will be a "spokesman for the interests of Italian citizens". Conte has also opted to keep the country's intelligence services under his personal control. Deputy premier Di Maio, who is serving as economic development minister, also took to Facebook, calling for "entrepreneurs to be left alone". "Employers and employees in Italy must not be enemies," he said, promising "I will not disappoint you". On Saturday evening Five Star held a rally in the centre of Rome with thousands of supporters and all its ministers to celebrate "the government of change". Di Maio told the crowd that "from today, the state is us". Five Star's founder, former comic Beppe Grillo, rang a bell in front of the crowd, saying the sound "marks the fracture between a world that is going away and a new one that is arriving". EU and the eurosceptics The world will be carefully watching power relations between Conte and his two influential deputies -- particularly the European Union, given the eurosceptic government is the first populist coalition in a founding EU member. EU Commission chief Jean-Claude Juncker called Saturday for Conte's new government to be treated with respect, having earlier sparked controversy by telling Italians to work harder and stop blaming the EU for the country's problems. "We should show respect towards Italy," Juncker said in an interview with the German press group Funke Mediengruppe. Juncker said Italy must not suffer the same fate as thrice-bailed out Greece whose dignity was "trodden under foot" by its creditors when left-wing Prime Minister Alexis Tsipras took office in 2015. "That must not happen again in the present case with Italy," Juncker said. "Italians have a clear understanding of what is good for their country. They will sort it out."

New Italy PM starts off in shadow of his powerful deputies

Italy&nbsp;on Thursday&nbsp;was awaiting a decision from right-wing leader Matteo Salvini on whether to join a last-ditch attempt to form a government and avoid snap elections that would be focused on membership of the eurozone.

Salvini, the head of the League, has said he would "seriously consider" an offer&nbsp;on Wednesday&nbsp;from 5-Star leader Luigi Di Maio to resurrect their bid to govern together.

The first effort by the two largest anti-establishment forces was torpedoed&nbsp;on Sunday&nbsp;when President Sergio Mattarella rejected their candidate for the economy minister - 81-year-old economist Paolo Savona, who has spoken out forcefully against the single currency.

Mattarella then appointed a former International Monetary Fund official, Carlo Cottarelli, to form a stop-gap government of experts to lead the country to snap elections. But Cottarelli has so far failed to form a viable cabinet.

Di Maio, whose 5-Star emerged from the inconclusive&nbsp;March 4&nbsp;elections as the largest single party, urged Salvini to drop his insistence on Savona for the economy portfolio and agree to give him another post in the next government.

"Di Maio - Salvini: the Final Deal," was the headline in Corriere Della Sera newspaper, echoing the national feeling of crisis put into a holding pattern.

Salvini cancelled his scheduled appointments in northern Italy to fly to Rome and was expected to have a private meeting with Di Maio, a political source said.

Opinion polls show Salvini's League would see huge gains in any early elections while the 5-Star would remain steady.

Italian stocks were trading higher as signs emerged of a compromise to avoid snap elections that could be dominated by the issue of euro membership, calming investors.

Borrowing costs meanwhile edged lower. Italy's 2-year government bond yield, which has been the focus of a recent selloff, was down as much as 95 basis points at 1.40 per cent.

The latest development came amid a general calming of financial markets after&nbsp;Tuesday's&nbsp;rout when investor concerns prompted the biggest one-day rise since 1992 in Italian two-year bond yields and dented the euro's exchange rate.

"I have lost my patience. I have had enough, that is the truth," said exasperated Rome resident Teresa Gallo as she was walking to a market for her regular morning shopping.

Two polls released&nbsp;on Wednesday&nbsp;night showed that between 60-72 per cent of Italians want the country to remain part of the euro while 23-24 per cent would choose to drop the common currency.

Lupo Rattazzi, a prominent Italian businessman, ran a full-page advertisement in several national newspapers addressed to Salvini and Di Maio, warning their electorate of the dire consequences of leaving the euro.

Two polls released on Wednesday night showed that between 60-72 per cent of Italians want the country to remain part of the euro while 23-24 per cent would choose to drop the common currency

Italy on Thursday was awaiting a decision from right-wing leader Matteo Salvini on whether to join a last-ditch attempt to form a government and avoid snap elections that would be focused on membership of the eurozone. Salvini, the head of the League, has said he would "seriously consider" an offer on Wednesday from 5-Star leader Luigi Di Maio to resurrect their bid to govern together. The first effort by the two largest anti-establishment forces was torpedoed on Sunday when President Sergio Mattarella rejected their candidate for the economy minister - 81-year-old economist Paolo Savona, who has spoken out forcefully against the single currency. Mattarella then appointed a former International Monetary Fund official, Carlo Cottarelli, to form a stop-gap government of experts to lead the country to snap elections. But Cottarelli has so far failed to form a viable cabinet. Di Maio, whose 5-Star emerged from the inconclusive March 4 elections as the largest single party, urged Salvini to drop his insistence on Savona for the economy portfolio and agree to give him another post in the next government. "Di Maio - Salvini: the Final Deal," was the headline in Corriere Della Sera newspaper, echoing the national feeling of crisis put into a holding pattern. Salvini cancelled his scheduled appointments in northern Italy to fly to Rome and was expected to have a private meeting with Di Maio, a political source said. Opinion polls show Salvini's League would see huge gains in any early elections while the 5-Star would remain steady. Italian stocks were trading higher as signs emerged of a compromise to avoid snap elections that could be dominated by the issue of euro membership, calming investors. Borrowing costs meanwhile edged lower. Italy's 2-year government bond yield, which has been the focus of a recent selloff, was down as much as 95 basis points at 1.40 per cent. The latest development came amid a general calming of financial markets after Tuesday's rout when investor concerns prompted the biggest one-day rise since 1992 in Italian two-year bond yields and dented the euro's exchange rate. "I have lost my patience. I have had enough, that is the truth," said exasperated Rome resident Teresa Gallo as she was walking to a market for her regular morning shopping. Two polls released on Wednesday night showed that between 60-72 per cent of Italians want the country to remain part of the euro while 23-24 per cent would choose to drop the common currency. Lupo Rattazzi, a prominent Italian businessman, ran a full-page advertisement in several national newspapers addressed to Salvini and Di Maio, warning their electorate of the dire consequences of leaving the euro.

Italy awaits decision on last-ditch deal to avoid snap elections

Italy's caretaker prime minister was&nbsp;Tuesday&nbsp;assembling a cabinet lineup despite almost certain rejection by the populists whose bid for power collapsed at the weekend.

Fresh elections are now looming as the most likely outcome of the long-running political saga sparked by inconclusive elections in March.

Carlo Cottarelli, a former IMF economist, was tasked with naming a technocrat government&nbsp;on Monday&nbsp;after President Sergio Mattarella nixed a cabinet proposed by the far-right League and anti-establishment Five Star Movement (M5S).

The president, in particular, vetoed their pick for economy minister, fierce eurosceptic Paolo Savona, throwing the eurozone's third-largest economy into a fresh crisis.

Savona has called the euro a "German cage" and said that Italy needs a plan to leave the single currency "if necessary".

Mattarella said that an openly eurosceptic economy minister was counter to the parties' joint promise to simply "change Europe for the better from an Italian point of view".

Cottarelli said Italy would face new elections "after August" if parliament did not endorse his team, a near certainty given that M5S and the League together hold a majority.

The parties' approved nominee for prime minister, lawyer and political novice Giuseppe Conte, stepped aside following the decision to reject Savona, crashing the proposed government after nearly three months of convoluted horse-trading.

The subsequent nomination of Cottarelli as caretaker prime minister sparked angry calls for Mattarella's impeachment since most lawmakers backed Savona.

League leader Matteo Salvini, a fellow eurosceptic who was Savona's biggest advocate, said the anti-establishment government failed because of pressure from the "powers that be, the markets, Berlin and Paris".

Five Star chief Luigi Di Maio called on party supporters to attend a rally in Rome&nbsp;on Saturday, the anniversary of Italy's transformation into a republic in 1946, after what he called "Italian democracy's darkest night".

The latest chapter in the drawn-out political saga sent Italian stocks tumbling more than two percent and bond yields surging, with Italy's debt risk premium hitting its highest level since November 2013.

Cottarelli, 64, was director of the International Monetary Fund's fiscal affairs department from 2008 to 2013 and became known as "Mr Scissors" for his public spending cuts 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 the populists' strength in parliament. Only the centre-left Democratic Party has announced that it would vote in favour.

Salvini and Di Maio furiously denounced the presidential veto, blasting what they called meddling by Germany, debt rating agencies, financial lobbies and even lies from Mattarella's staff.

"Paolo Savona would not have taken us out of the euro. It's a lie invented by Mattarella's advisors," Di Maio said in a live video on Facebook. "The truth is that they don't want us in government."

Elections could benefit Salvini, however, as recent polling by IndexResearch put the League at 22 percent, five points up from their vote share in the&nbsp;March 4&nbsp;ballot.

Under the Italian constitution, the president nominates both the prime minister and, following proposals from the premier, the cabinet.&nbsp;

The most famous example of a president denying a PM's choice was in 1994 when Eugenio Scalfari refused then prime minister Silvio Berlusconi's choice of his own lawyer -- Cesare Previti -- as justice minister.

However, Di Maio said that Mattarella, himself a former constitutional court judge, had "gone beyond his legal prerogatives".

He said an impeachment trial for Mattarella, 76, would be "almost a certainty".

Most analysts, however, say impeachment is only possible in cases of "high treason" or constitutional breaches.

"President Mattarella has only exercised his constitutional powers", said Massimo Luciani, president of the Italian Constitutionalists Association.

Fresh elections are now looming as the most likely outcome of the long-running political saga sparked by inconclusive elections in March

Italy's caretaker prime minister was Tuesday assembling a cabinet lineup despite almost certain rejection by the populists whose bid for power collapsed at the weekend. Fresh elections are now looming as the most likely outcome of the long-running political saga sparked by inconclusive elections in March. Carlo Cottarelli, a former IMF economist, was tasked with naming a technocrat government on Monday after President Sergio Mattarella nixed a cabinet proposed by the far-right League and anti-establishment Five Star Movement (M5S). The president, in particular, vetoed their pick for economy minister, fierce eurosceptic Paolo Savona, throwing the eurozone's third-largest economy into a fresh crisis. Savona has called the euro a "German cage" and said that Italy needs a plan to leave the single currency "if necessary". Mattarella said that an openly eurosceptic economy minister was counter to the parties' joint promise to simply "change Europe for the better from an Italian point of view". Cottarelli said Italy would face new elections "after August" if parliament did not endorse his team, a near certainty given that M5S and the League together hold a majority. The parties' approved nominee for prime minister, lawyer and political novice Giuseppe Conte, stepped aside following the decision to reject Savona, crashing the proposed government after nearly three months of convoluted horse-trading. The subsequent nomination of Cottarelli as caretaker prime minister sparked angry calls for Mattarella's impeachment since most lawmakers backed Savona. League leader Matteo Salvini, a fellow eurosceptic who was Savona's biggest advocate, said the anti-establishment government failed because of pressure from the "powers that be, the markets, Berlin and Paris". Five Star chief Luigi Di Maio called on party supporters to attend a rally in Rome on Saturday, the anniversary of Italy's transformation into a republic in 1946, after what he called "Italian democracy's darkest night". The latest chapter in the drawn-out political saga sent Italian stocks tumbling more than two percent and bond yields surging, with Italy's debt risk premium hitting its highest level since November 2013. Cottarelli, 64, was director of the International Monetary Fund's fiscal affairs department from 2008 to 2013 and became known as "Mr Scissors" for his public spending cuts 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 the populists' strength in parliament. Only the centre-left Democratic Party has announced that it would vote in favour. Salvini and Di Maio furiously denounced the presidential veto, blasting what they called meddling by Germany, debt rating agencies, financial lobbies and even lies from Mattarella's staff. "Paolo Savona would not have taken us out of the euro. It's a lie invented by Mattarella's advisors," Di Maio said in a live video on Facebook. "The truth is that they don't want us in government." Elections could benefit Salvini, however, as recent polling by IndexResearch put the League at 22 percent, five points up from their vote share in the March 4 ballot. Under the Italian constitution, the president nominates both the prime minister and, following proposals from the premier, the cabinet. The most famous example of a president denying a PM's choice was in 1994 when Eugenio Scalfari refused then prime minister Silvio Berlusconi's choice of his own lawyer -- Cesare Previti -- as justice minister. However, Di Maio said that Mattarella, himself a former constitutional court judge, had "gone beyond his legal prerogatives". He said an impeachment trial for Mattarella, 76, would be "almost a certainty". Most analysts, however, say impeachment is only possible in cases of "high treason" or constitutional breaches. "President Mattarella has only exercised his constitutional powers", said Massimo Luciani, president of the Italian Constitutionalists Association.

Showdown looms in Italy as caretaker PM assembles team

Italy's president is expected to ask a former International Monetary Fund official on Monday to head a stopgap government amidst political and constitutional turmoil, with early elections looking inevitable.

President Sergio Mattarella has called in Carlo Cottarelli after two anti-establishment parties angrily abandoned their plans to form a coalition in the face of a veto from the head of state over their choice of economy minister.

In a televised address, Mattarella said he had rejected the candidate, 81-year-old eurosceptic economist Paolo Savona, because he had threatened to pull Italy from the single currency.

"The uncertainty over our position has alarmed investors and savers both in Italy and abroad," he said, adding: "Membership of the euro is a fundamental choice. If we want to discuss it, then we should do so in a serious fashion."

Financial markets tumbled last week on fears the coalition being discussed would unleash a spending splurge and dangerously ramp up Italy's already huge debt, which is equivalent to more than 1.3 times the nation's domestic output.

After Mattarella's move, the euro gained ground, adding 0.6 percent against the Japanese yen and ticking up against other major trading partners as well.

The far-right League and anti-establishment 5-Star Movement, which had spent days drawing up a coalition pact aimed at ending a stalemate following an inconclusive March vote, responded with fury to Mattarella, accusing him of abusing his office.

5-Star leader Luigi Di Maio called on parliament to impeach the mild-mannered Mattarella, while League chief Matteo Salvini threatened mass protests unless snap elections were called.

"If there's not the OK of Berlin, Paris or Brussels, a government cannot be formed in Italy. It's madness, and I ask the Italian people to stay close to us because I want to bring democracy back to this country," Salvini told reporters.

Short-term solution

While he had approved all their other ministerial picks, Mattarella said he had the right to block nominations that could harm the country. He added that the League and 5-Star had refused to put forward any other name for the role.

Shortly afterwards, the president's office summoned Cottarelli, the IMF's former director of fiscal affairs, for a meeting on Monday. Such a call is usually a prelude to being offered a mandate to form a government.

Cottarelli would be a calming choice for the financial markets, but any technocratic administration would likely only be a short-term solution because the majority of parliamentarians have said they would not support such a government.

If, as expected, he fails to win parliamentary backing, Cottarelli would simply ferry Italy to elections that would most likely be held in September or October. It would be the first time in postwar Italian history that such a re-vote was needed.

Polls have suggested that the League, which won 17 percent of the vote in March, would surge in any early ballot, while support for 5-Star remained strong on around 35 percent.

Mainstream centre-left and centre-right parties were seen losing further ground in the face of voter anger over the sluggish economy, high unemployment and rising poverty.

Demanding an immediate ballot, Salvini told followers on Facebook: "It won't be an election, it will be a referendum between Italy and those on the outside who want us to be a servile, enslaved nation on our knees."

Salvini declined, however, to be drawn on whether he would back calls by 5-Star and a far-right ally, the Brothers of Italy, to chase Mattarella out of office.

"We will ask parliament to charge Mattarella with high treason because he has acted under foreign pressure," Brothers of Italy chief Giorgia Meloni said on La7 television channel.

The 5-Star's Di Maio demanded impeachment under article 90 of the constitution. Under that clause, parliament can seek to remove a president if a simple majority of lawmakers votes in favour. The constitutional court would then be called to decide whether to enforce the decision.

The centre-right Forza Italia party and the centre-left Democratic Party (PD) both denounced calls for impeachment, with former PD leader Matteo Renzi saying his party would take to the streets to defend Italy's institutions if needed.

"Today, we need people to say 'no' to those who want to break us apart, who make excuses rather than assuming their responsibilities, who are playing on the anxieties of others," Renzi, a former prime minister, wrote on Facebook.

President Sergio Mattarella has called in Carlo Cottarelli after two anti-establishment parties angrily abandoned their plans to form a coalition in the face of a veto from the head of state over their choice of economy minister

Italy's president is expected to ask a former International Monetary Fund official on Monday to head a stopgap government amidst political and constitutional turmoil, with early elections looking inevitable. President Sergio Mattarella has called in Carlo Cottarelli after two anti-establishment parties angrily abandoned their plans to form a coalition in the face of a veto from the head of state over their choice of economy minister. In a televised address, Mattarella said he had rejected the candidate, 81-year-old eurosceptic economist Paolo Savona, because he had threatened to pull Italy from the single currency. "The uncertainty over our position has alarmed investors and savers both in Italy and abroad," he said, adding: "Membership of the euro is a fundamental choice. If we want to discuss it, then we should do so in a serious fashion." Financial markets tumbled last week on fears the coalition being discussed would unleash a spending splurge and dangerously ramp up Italy's already huge debt, which is equivalent to more than 1.3 times the nation's domestic output. After Mattarella's move, the euro gained ground, adding 0.6 percent against the Japanese yen and ticking up against other major trading partners as well. The far-right League and anti-establishment 5-Star Movement, which had spent days drawing up a coalition pact aimed at ending a stalemate following an inconclusive March vote, responded with fury to Mattarella, accusing him of abusing his office. 5-Star leader Luigi Di Maio called on parliament to impeach the mild-mannered Mattarella, while League chief Matteo Salvini threatened mass protests unless snap elections were called. "If there's not the OK of Berlin, Paris or Brussels, a government cannot be formed in Italy. It's madness, and I ask the Italian people to stay close to us because I want to bring democracy back to this country," Salvini told reporters. Short-term solution While he had approved all their other ministerial picks, Mattarella said he had the right to block nominations that could harm the country. He added that the League and 5-Star had refused to put forward any other name for the role. Shortly afterwards, the president's office summoned Cottarelli, the IMF's former director of fiscal affairs, for a meeting on Monday. Such a call is usually a prelude to being offered a mandate to form a government. Cottarelli would be a calming choice for the financial markets, but any technocratic administration would likely only be a short-term solution because the majority of parliamentarians have said they would not support such a government. If, as expected, he fails to win parliamentary backing, Cottarelli would simply ferry Italy to elections that would most likely be held in September or October. It would be the first time in postwar Italian history that such a re-vote was needed. Polls have suggested that the League, which won 17 percent of the vote in March, would surge in any early ballot, while support for 5-Star remained strong on around 35 percent. Mainstream centre-left and centre-right parties were seen losing further ground in the face of voter anger over the sluggish economy, high unemployment and rising poverty. Demanding an immediate ballot, Salvini told followers on Facebook: "It won't be an election, it will be a referendum between Italy and those on the outside who want us to be a servile, enslaved nation on our knees." Salvini declined, however, to be drawn on whether he would back calls by 5-Star and a far-right ally, the Brothers of Italy, to chase Mattarella out of office. "We will ask parliament to charge Mattarella with high treason because he has acted under foreign pressure," Brothers of Italy chief Giorgia Meloni said on La7 television channel. The 5-Star's Di Maio demanded impeachment under article 90 of the constitution. Under that clause, parliament can seek to remove a president if a simple majority of lawmakers votes in favour. The constitutional court would then be called to decide whether to enforce the decision. The centre-right Forza Italia party and the centre-left Democratic Party (PD) both denounced calls for impeachment, with former PD leader Matteo Renzi saying his party would take to the streets to defend Italy's institutions if needed. "Today, we need people to say 'no' to those who want to break us apart, who make excuses rather than assuming their responsibilities, who are playing on the anxieties of others," Renzi, a former prime minister, wrote on Facebook.

Italy's president calls in former IMF official amid political turmoil

Italy could be forced to hold new elections after Giuseppe Conte gave up his bid to form a government following the collapse of talks with the president over including a eurosceptic economy minister in his cabinet.

Conte, 53, a lawyer and political novice, picked for prime minister by the anti-establishment Five Star Movement and far-right League seeking to form a coalition, had to present a list of ministers that the head of state would agreed to before his government could seek approval by parliament.

"I have given up my mandate to form the government of change," said Conte to reporters after leaving failed talks with President Sergio Mattarella.

Conte's decision to step aside leaves Italy in a political crisis nearly three months after March's inconclusive general election.

Following Conte's exit, Mattarella has summoned Carlo Cottarelli, an economist formerly with the International Monetary Fund, for talks on Monday, with a temporary technical government on the table as Italy faces the strong possibility of new elections in the autumn.

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.

However, he will struggle to gain the approval of parliament with Five Star and the League commanding a majority in both houses.

"They've replaced a government with a majority with one that won't obtain one," said Five Star leader Luigi Di Maio to supporters at a rally near Rome.

Savona choice sinks deal

Mattarella confirmed that the nomination by Five Star and the League of Paolo Savona for economy minister saw the end of Conte's brief mandate.

In his latest book, "Like a Nightmare and a Dream", 81-year-old Savona calls the euro a "German cage" and says that Italy needs a plan to leave the single currency "if necessary".

"I accepted every proposed minister apart from the minister of the economy," Mattarella told reporters.

A former judge of Italy's constitutional court, Mattarella has refused to bow to what he saw as "diktats" from the two parties which he considered contrary to the country's interests.

He had watched for weeks as Five Star and the League set about trying to strike an alliance that would give Italy's hung parliament a majority.

The president said that he has done "everything possible" to aid the formation of a government, but that an openly eurosceptic economy minister ran against the parties' joint promise to simply "change Europe for the better from an Italian point of view".

"I asked for the (economy) ministry an authoritative person from the parliamentary majority who is consistent with the government programme... who isn't seen as a supporter of a line that could probably, or even inevitably, provoke Italy's exit from the euro," he added.

Mattarella said Conte refused to support "any other solution" and then, faced with the president's refusal to approve the choice of Savona, gave up his mandate to be prime minister.

Furious reaction

The leaders of Five Star and the League, Luigi Di Maio and Matteo Salvini, were infuriated by Mattarella's refusal to accept Savona, a respected financier and economist.

Salvini, who was Savona's biggest advocate and a fellow eurosceptic, said on Sunday that Italy wasn't a "colony", and that "we won't have Germany tell us what to do".

"Why don't we just say that in this country it's pointless that we vote, as the ratings agencies, financial lobbies decide the governments," a livid Di Maio said in a video on Facebook.

Later on Italian television he called for impeaching Mattarella.

"I hope that we can give the floor to Italians as soon as possible, but first we need to clear things up. First the impeachment of Mattarella... then to the polls," Di Maio said

Italy could be forced to hold new elections after Giuseppe Conte gave up his bid to form a government following the collapse of talks with the president over including a eurosceptic economy minister in his cabinet

Italy could be forced to hold new elections after Giuseppe Conte gave up his bid to form a government following the collapse of talks with the president over including a eurosceptic economy minister in his cabinet. Conte, 53, a lawyer and political novice, picked for prime minister by the anti-establishment Five Star Movement and far-right League seeking to form a coalition, had to present a list of ministers that the head of state would agreed to before his government could seek approval by parliament. "I have given up my mandate to form the government of change," said Conte to reporters after leaving failed talks with President Sergio Mattarella. Conte's decision to step aside leaves Italy in a political crisis nearly three months after March's inconclusive general election. Following Conte's exit, Mattarella has summoned Carlo Cottarelli, an economist formerly with the International Monetary Fund, for talks on Monday, with a temporary technical government on the table as Italy faces the strong possibility of new elections in the autumn. 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. However, he will struggle to gain the approval of parliament with Five Star and the League commanding a majority in both houses. "They've replaced a government with a majority with one that won't obtain one," said Five Star leader Luigi Di Maio to supporters at a rally near Rome. Savona choice sinks deal Mattarella confirmed that the nomination by Five Star and the League of Paolo Savona for economy minister saw the end of Conte's brief mandate. In his latest book, "Like a Nightmare and a Dream", 81-year-old Savona calls the euro a "German cage" and says that Italy needs a plan to leave the single currency "if necessary". "I accepted every proposed minister apart from the minister of the economy," Mattarella told reporters. A former judge of Italy's constitutional court, Mattarella has refused to bow to what he saw as "diktats" from the two parties which he considered contrary to the country's interests. He had watched for weeks as Five Star and the League set about trying to strike an alliance that would give Italy's hung parliament a majority. The president said that he has done "everything possible" to aid the formation of a government, but that an openly eurosceptic economy minister ran against the parties' joint promise to simply "change Europe for the better from an Italian point of view". "I asked for the (economy) ministry an authoritative person from the parliamentary majority who is consistent with the government programme... who isn't seen as a supporter of a line that could probably, or even inevitably, provoke Italy's exit from the euro," he added. Mattarella said Conte refused to support "any other solution" and then, faced with the president's refusal to approve the choice of Savona, gave up his mandate to be prime minister. Furious reaction The leaders of Five Star and the League, Luigi Di Maio and Matteo Salvini, were infuriated by Mattarella's refusal to accept Savona, a respected financier and economist. Salvini, who was Savona's biggest advocate and a fellow eurosceptic, said on Sunday that Italy wasn't a "colony", and that "we won't have Germany tell us what to do". "Why don't we just say that in this country it's pointless that we vote, as the ratings agencies, financial lobbies decide the governments," a livid Di Maio said in a video on Facebook. Later on Italian television he called for impeaching Mattarella. "I hope that we can give the floor to Italians as soon as possible, but first we need to clear things up. First the impeachment of Mattarella... then to the polls," Di Maio said

Italy plunges into political crisis after government talks collapse

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