European Commission President Jean-Claude Juncker said that the EU would "be at Italy's side on its reform path", and would welcome any proposals the new government might have on reforming the bloc.
Italian president Sergio Matterella, an European Union loyalist appointed by fellow politicians rather than elected by the people, used his usually ceremonial position to block the populist parties' first attempt to form a government, claiming that Savona - their pick for economy minister - was unsuitable due to past criticism of the euro currency.
A populist government will be sworn into power in Italy on Friday after president Sergio Mattarella agreed to a revised slate of ministers - just days after a bitter row over the incoming leaders' stance on the euro ended their initial bid to assume power, The Guardian writes.A joint statement by the anti-establishment Five Star Movement (M5S) and the far-right League announced that political newcomer Giuseppe Conte, who had been seen as a controversial choice, would serve as prime minister.
In a last-minute shuffle of cabinet posts aimed at appeasing President Sergio Mattarella, Conte remained but an 81-year-old euro-skeptic economist, Paolo Savona, was shunted from the economy minister's post to a European affairs position.
Enzo Moavero Milanesi, director of the School of Law at LUISS University in Rome, will be made Foreign Affairs Minister.
Giuseppe Conte is set to be Italy's new prime minister.
After being sworn in, the ministers will face confidence votes in both chambers of parliament, where the M5S and the League have a majority.
Di Maio was said to be wary about having another far-rightist as well as Salvini as his partner, since polls show the M5S has been bleeding voters it gained from the centre-left Democratic Party (PD) on March 4 because of the possible new government's rightward drift.
The anti-establishment 5-Star Movement and the right-wing League party are swearing in their Cabinet later Friday, capping a roller-coaster week of political and financial turmoil by agreeing to drop a proposed economy minister who had concerned Italy's president.
"While short-term reaction may be of relief since the worst-case scenario of new elections has been arguably voided, the legitimate debate on sustainability of public accounts should start, maintaining credit spreads above pre-political crisis levels", according to Javier Suarez, an analyst at Mediobanca SpA in Milan.
Carlo Cottarelli told reporters on Thursday that "it is no longer necessary to form a technical government".
In his latest book, "Like a Nightmare and a Dream", Savona calls the single currency a "German cage", and his hostility to the euro provoked a flurry of warnings from Brussels as Mattarella hesitated over his appointment.
And they will have to keep a tight rein on their MPs - especially those who view the new alliance with scepticism - to go the distance. "He is the guarantee that Italy can sit at table as a key player".
How did we get here?The supposed snap elections in Italy have already dealt a blow to euro and global stocks.
"I'm passed off as one of those rare anti-European institutional economists but it is not true".
Speaking to Sputnik, Mario Borghezio from the Lega Nord party accused the major European capitals of exerting pressure on the Italian president who earlier rejected a right-wing-backed coalition government.
The European Commission on Wednesday (23 May) approved Italy's efforts to balance its public accounts but asked the new government for a "credible response" in order to further reduce its vast public debt.
Juncker said at a conference Thursday that "Italians have to take care of the poor regions of Italy".
This, along with claims by President of the European Commission Jean-Claude Juncker that Italy needs "more work; less corruption; [and] seriousness" rather than less EU nearly guarantee that Rome and Brussels will come into conflict sooner rather than later.
Over the weekend, the Five Star Movement and the Northern League described Mattarella's opposition to Savona as unjustified and partisan, and alluded to his being part of a conspiracy to stop their government. "We are second to none".
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