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Italian political crises worsens

Italy looks set to have an interim government before fresh elections, in a political crisis which pits Eurosceptic populists - winners of the March election - against pro-EU establishment politicians.

President Sergio Mattarella's rejection of the populists' choice for finance minister - Prof Paolo Savona - exposed tensions over the Euro. The 81-year-old economist had advocated a "Plan B" for Italy to exit the Euro.

The new prime minister-designate, Carlo Cottarelli, is an International Monetary Fund (IMF) veteran close to Brussels technocrats, solidly pro-euro and pro-austerity. He is known in Italy as "Mr Spending Review".

Italy is no stranger to political turmoil however, as the country has had 64 governments since World War Two. The anti-establishment populists - the Five Star Movement (M5S) and the League - were enraged by the president's veto over their proposed government.

M5S leader Luigi Di Maio called for President Mattarella to be impeached. League leader Matteo Salvini suggested that Germany was behind the president's veto; but Italy was not a "colony", he said.

Mr Cottarelli says that new elections will be held in early-2019 - or after August if he fails to survive a confidence vote. The latter appears the most likely.

Italy is the Eurozone's third-largest economy but has a government debt burden of €2.3tn, which is a colossal 132% of GDP and the second-highest debt level in Europe after Greece's.

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