Lega Party Calls on Italian President to Elect New Parliament

European Union - Italy's Conte fights to form team as ally threatens new vote

Looking to allay investor concerns, Mattarella vetoed on Sunday the choice of 81-year-old economist Paolo Savona, a vocal critic of the single currency, to the pivotal economy post. A new vote could be held on September 9, newspaper Corriere della Sera reported on Monday.

Italians had entered the weekend thinking such a government might be just days away from taking power.

All eyes are on Italian President Sergio Mattarella after he vetoed the proposed euroskeptic economy minister of what would have been Western Europe's first populist government. Under the constitution, Mattarella names both the premier and ministers-the latter at the premier's suggestion.

Luigi Di Maio said: "New elections?"

His appointment was opposed by the current Italian President Sergio Mattarella.

"We hope that Italy will have a stable, pro-European government soon", Roth said on arrival to a meeting of European Union foreign ministers in Brussels.

Conte's rejection paves the way for a new government crisis that could lead the country to a new election.

Mr Cottarelli, 64, worked at the International Monetary Fund from 2008 to 2013, gaining the nickname "Mr Scissors" for making cuts to public spending in Italy. He has headed the Observatory on Italian Public Accounts at Milan's Catholic University since October.

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"Berlusconi's statement yesterday was the same sort of thing that could have been written by (former centre-left prime minister Matteo) Renzi", Salvini told Radio Capitale. None of the parties obtained the majority of votes required for the government formation.

The euro also rebounded after hitting a six-month low at the end of last week, although it gave up some of the early gains as trading continued to trade at $1.166 against the U.S. dollar, having earlier in the day reached $1.1728.

Padoan also said the parties should have vocally ruled out a proposal put forward in Savona's most recent book, which said Italy should draw up a "plan B" for the country to leave the eurozone with as little damage as possible if it should prove necessary.

In a terse comment to reporters after he relinquished the presidential mandate, Conte said he "gave the maximum effort, attention, to carry out this task". Mattarella's office said no meeting had yet been scheduled.

The spread rose to 215 basis points on Friday - the widest in four years.

Both men have vowed to vote against a so-called technocratic or non-partisan government, if such a coalition comes to a confidence vote in parliament. Mattarella added: "Now some political forces are asking me to hold elections".

"We are ready to mobilize to defend democracy and our institutions".

With the prospect of elections possibly looming in a few weeks or months, Salvini might see a boost in what already has been steadily growing popularity, said political analyst Maurizio Molinari, who is La Stampa newspaper's editor-in-chief.

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