BRUSSELS, June 1 (Reuters) - The European Union's chief executive congratulated Italy's newly appointed Prime Minister Giuseppe Conte on Friday, saying the bloc would be attentive to his proposal on the EU and be supportive of his reform plans.

"The European Commission will be at Italy's side on its reform path and remain attentive to Italy's expectations of and proposals for the future of the #EU," Juncker's spokeswoman tweeted.

Giuseppe Conte was sworn in on Friday as Italy's prime minister, heading western Europe's first anti-establishment government bent on overhauling European Union rules on budgets and immigration. (Reporting by Alissa de Carbonnel @AdeCar, editing by Julia Fioretti)</s>Image copyright AFP Image caption Giuseppe Conte (L) presented a new list of ministers to President Sergio Mattarella

A coalition government has been agreed in Italy, ending months of uncertainty in the EU's fourth-biggest economy.

Prime Minister-designate Giuseppe Conte presented his list of ministers to President Sergio Mattarella for the second time in a week and the new government will be sworn in on Friday.

Ministers are drawn from both the anti-establishment Five Star (M5S) and the right-wing League.

Attempts to form a technocratic government had failed.

Mr Mattarella rejected Mr Conte's original choice for economy minister but a different candidate was agreed on Thursday.

Conflict with EU not over

Analysis by BBC's James Reynolds in Rome

Four days of political and constitutional crisis are over. And a new populist government - led by law professor Giuseppe Conte - will now be sworn in.

Image copyright AFP Image caption Aiming to rule: The Five Star Movement's Luigi Di Maio (left) and the League's Matteo Salvini

In the end, the populist parties decided to back down and accept the president's veto of their original choice of a eurosceptic economy minister.

Their newly chosen minister, Giovanni Tria, is in favour of Italy's continued membership of the single currency.

But the populists' conflict with the EU is not entirely over. The M5S and the League have promised both new welfare spending and also tax cuts - which may run into conflict with the EU's spending rules.

League leader Matteo Salvini will be the interior minister. He has promised a tough new policy on migration, which may provoke arguments within Europe.

What deal was reached?

After meeting President Mattarella, Mr Conte confirmed reports that the new candidate for the key economy minister post would be economics professor Giovanni Tria.

M5S leader Luigi Di Maio and Mr Salvini said in a brief joint statement: "All the conditions have been met for a M5S-League government."

Image copyright EPA Image caption Paolo Savona will enter government after all - but not as economy minister

Other notable appointments to the new cabinet include:

Interior and Deputy Prime Minister: Matteo Salvini (League)

Industry and Deputy Prime Minister: Luigi Di Maio (M5S)

Foreign: Enzo Moavero Milanesi (independent, ex-European Affairs minister)

Defence: Elisabetta Trenta (M5S)

European affairs: Paolo Savona (independent), the controversial original choice for finance

"We will work intensely to realise our political objectives which we have already put together in our government contract," Mr Conte was quoted as saying by the Reuters news agency.

The new government is expected to be sworn in later on Friday.

After the ceremony, it will face confidence votes in both chambers of parliament, where the M5S and the League have a majority.

Italy is no stranger to political turmoil - it has had 64 governments since World War Two.

Mr Conte is taking over from Paolo Gentiloni, who led a coalition cabinet for two years.

How did we get here?

4 March: 5-Star wins 32% of the vote in the general election, with the League taking 18%.

The two populist parties eventually attempt to form a coalition, putting forward Mr Conte, a political novice, as prime minister.

28 May: Mr Conte presents his cabinet list to President Mattarella who vetoes the choice of Mr Savona as finance minister on the grounds that he is a eurosceptic. Mr Conte bows out. Both parties are furious and Mr Di Maio calls on parliament to impeach Mr Mattarella. The president asks ex-IMF economist Carlo Cottarelli to form a technocratic government until fresh elections can be held.

Image copyright EPA Image caption Carlo Cottarelli (left) was President Sergio Mattarella's choice for interim PM

30 May: Mr Cottarelli appears to suspend his own efforts to form an interim administration as Five Star and the League engage in new talks.

31 May: Mr Conte returns to the president with a new cabinet list, which is accepted.</s>Certainties Europe has relied on for decades seem to be crumbling: that the U.S. is a reliable trade partner, and that the founding members of the EU all remain committed to the bloc.

On Friday, U.S. President Donald Trump imposed tariffs on European steel and aluminum, dismissing Europe's pleas, and an anti-EU populist government took office in Italy. Added to Britain's expected departure next year from the European Union, the milestones show a region entering a new state of flux, with potential implications for the prosperity of its people and global relations.

"Germany and France should very quickly show joint political leadership now," said Daniela Schwarzer, director of the German Council on Foreign Relations.

That role would belong in large part to Germany's Angela Merkel and France's Emmanuel Macron when it comes to strengthening Europe's currency union. Collectively, the EU could seek to ease worries about trade by strengthening commercial ties with other partners like Japan, China and countries in South America.

But the trade relationship with the U.S. is the biggest in the world, and will be hard to make up for, if the U.S. and EU escalate their spat by imposing counter-tariffs on each other. U.S. trade helped Europe recover from the devastation of World War II and enriched U.S. companies that sold consumer goods to the continent. A souring in relations could also have implications for cooperation in other spheres, like security.

"The situation is worrying, it could escalate," said the EU's trade chief, Cecilia Malmstrom, adding that the tariffs could hurt global economic growth. "The United States is playing a dangerous game."

The EU officials were far more cautious in their reaction to the political situation in Italy, for fear of further provoking supporters of the new government led by the anti-establishment 5 Star Movement and the anti-immigration the League. But they were likely not less worried, having seen European financial markets plunge this week on Italy's political chaos.

Law professor and political neophyte Giuseppe Conte was sworn in Friday as the head of Italy's populist government. The two parties plan tax cuts and more spending, including a basic income for the poor, that would likely clash with EU limits on deficits. An initial failure to agree with President Sergio Mattarella on a government led to a sharp sell-off in Italian markets Monday and Tuesday.

Italy, one of the original signers of the 1957 Treaty of Rome that created a common market and paved the way for today's European Union, has the second heaviest debt load in Europe after Greece, at 132 percent of annual economic output, and the market tremors underlined the currency union's ongoing vulnerability after a 2010-2012 debt crisis.

The parties' rise to power in Italy will be a blow to supporters of the EU, as it could embolden anti-EU parties, which have won elections in some countries in Eastern Europe, like Hungary and Poland. And it comes just as the EU enters a key six months of negotiations with Britain on the country's exit from the bloc.

To stir things up a bit more, Spain's government lost a no-confidence vote Friday and conservative Prime Minister Mariano Rajoy was replaced by socialist Pedro Sanchez.

The developments leave other EU leaders looking for a strategy ahead of a summit on June 28-29. The meeting was originally supposed to agree on how to strengthen the EU and the euro based on proposals from Macron, whose election victory in May 2017 over nationalist euroskeptic opponent Marine Le Pen gave a temporary sense that the tide of populist discontent had been turned back.

Hopes for an agreement at the summit have narrowed to a few issues, such as upgrading the eurozone's bailout fund for troubled countries. Others have been rejected or kicked into the long weeds because countries like Germany fear of sharing financial risk with shakier members. The European Commission has proposed a 30 billion euro fund to help troubled eurozone countries with investment spending over a seven-year period.

And the disputes with the U.S. go far beyond trade. Europeans disagree with Trumps' decision to abandon a deal with Iran to limit its nuclear program and to withdraw from a global climate change pact. The U.S. president has also criticized European countries, particularly Germany, for not fulfilling their commitment to spend at least 2 percent of GDP on defense.

Not everything is falling apart. Europe's economy is growing at a healthy pace. Italy's populists might not carry through on all their spending plans to avoid a crisis in financial markets. How far the trade conflict will escalate isn't clear yet either.

Schwarzer from the German Council on Foreign Relations said the EU's first task is to ensure that European governments stick together on trade and push back collectively on the Iran nuclear deal by engaging in the Middle East.

"The EU, however, will only be a strong player externally, if it manages its internal divisions," she said. Merkel in particular needs to show Macron that German is with France in wanting to strengthen Europe.

If not, "the political void Berlin currently leaves will be filled by other actors, some of which deliberately try to weaken the EU."

Raf Casert in Brussels and Frank Jordans in Berlin contributed to this report.</s>Giuseppe Conte, a law professor who has never before held political office, was sworn in as Italy’s new Prime Minister on Friday, heading a populist new government whose senior figures have expressed anti-immigrant and eurosceptic views. Conte presented his list of ministers to President Sergio Mattarella for the second time in a week, after his choice for economy minister had been rejected by Mattarella. Both Conte and Mattarella agreed on a pro-Europe minister, and the former candidate for minister was demoted to the less high-profile role of Europe affairs minister.

After months of political turmoil and four days of uncertainty that echoed all throughout the European Union, Italy finally has a new administration. But the problems are not over. Racial and economic resentment led Italians to vote far-right and populist parties into parliament. The Five Star Movement and The League parties then formed a coalition which now effectively controls most of the Italian government.

The leaders of both parties catered to anti-immigrant and euro-skeptic sentiments and the new administration is likely to be met with alarm by French president Emmanuel Macron and German chancellor Angela Merkel, who both favor a stronger and more integrated Europe.

Reuters news agency quoted Mr. Conte as saying, “We will work intensely to realize our political objectives which we have already put together in our government contract.” He also pledged to “work with determination to improve the lives of all Italians.”</s>Giuseppe Conte was sworn in as prime minister of Italy’s new populist government Friday after a last-ditch coalition deal ended months of political deadlock and narrowly avoided snap elections in the euro zone’s third largest economy.

Conte, an academic and political novice, will head a government of ministers from the anti-establishment Five Star Movement (M5S) and the far-right League party.

The first populist coalition in a founding member nation of the European Union has raised concerns in some European quarters.

The 53-year-old was sworn in along with his cabinet, which will place M5S leader Luigi Di Maio and League chief Matteo Salvini in key ministerial posts.

Italy needs to work harder and be less corrupt: Juncker

After weeks of political drama that at one stage seemed certain to lead to new elections, President Sergio Mattarella named Conte, a political novice, as prime minister for the second time in less than a fortnight and approved his revised cabinet.

Conte had abandoned his original mandate as prime minister on Sunday after Mattarella vetoed Paolo Savona as economy minister because of his hostility to the euro, prompting the collapse of the Five Star-League joint government deal.

But in a surprise twist, the populists resurrected the coalition talks and Conte eventually accepted a new mandate for the premiership.

European Union chiefs must make Italy more welcome or risk deeper crisis

He presented Mattarella with a revised list of ministers – with Savona moved to EU Affairs – that the head of state quickly accepted.

Italian media reported that the line-up will face a vote of confidence on Monday or Tuesday in both houses of parliament, which it is almost certain to win thanks to the populists’ combined majority.</s>Giuseppe Conte was sworn in as prime minister of Italy’s new populist government today after a last-ditch coalition deal ended months of political deadlock and narrowly avoided snap elections in the eurozone’s third largest economy.

Conte, an academic and political novice, will head a government of ministers from the anti-establishment Five Star Movement (M5S) and the far-right League Party. The first populist coalition in a founding EU member has raised concerns in some European quarters.

The 53-year-old was sworn in alongside his cabinet, which will see M5S leader Luigi Di Maio and League chief Matteo Salvini in key ministerial posts.

After weeks of political drama that had at one stage seemed certain to lead to new elections, President Sergio Mattarella named political novice Conte as prime minister for the second time in less than a fortnight and approved his revised cabinet.

Conte had abandoned his original mandate as PM on Sunday after Mattarella vetoed eurosceptic Paolo Savona as economy minister, prompting the collapse the Five Star-League joint government deal collapsed.

But in a surprise twist, the populists resurrected the coalition talks and Conte eventually accepted a new mandate for the premiership. He presented Mattarella with a revised list of ministers – with Savona moved to EU Affairs – that the head of state quickly accepted.

Italian media reported that the lineup will face a vote of confidence on Monday or Tuesday in both houses of parliament, which it is almost certain to win thanks to the populists’ combined majority.</s>Italy to have first populist government as Giuseppe Conte asked to be prime minister again

Italy's president has tapped politically inexperienced law professor Giuseppe Conte to be the man who will head Italy's first populist government.

Italy's anti-establishment parties revived their coalition plans, ending three months of political turmoil by announcing a government that promises to increase spending, challenge European Union fiscal rules and crack down on immigration.

The coalition deal, following inconclusive elections in March, removes the risk of a repeat vote, a prospect that had sparked a big selloff in Italian financial markets this week.

The leaders of the right-wing League and the 5-Star Movement patched up their alliance after agreeing to substitute a eurosceptic they had initially proposed as economy minister, a nomination that had been rejected by the head of state.

"All the conditions have been fulfilled for a political, 5-Star and League government," 5-Star chief Luigi Di Maio and League leader Matteo Salvini said in a joint statement after several hours of talks in central Rome.

Just a few hours later their chosen prime minister Mr Conte, a little-known law professor who belongs to neither party and has not been elected, presented his list of ministers after receiving his second mandate in eight days.

"We will work with determination to improve the quality of life of all Italians," Mr Conte told reporters at the presidential palace after meeting the head of state Sergio Mattarella.

Mr Salvini will be the interior minister and Mr Di Maio will take a powerful, newly-created joint ministry made up of the labour and industry portfolios.

Both leaders will also be deputy prime ministers and many commentators have forecast that Mr Conte will have a tough time proving he can be more than a puppet in the hands of his powerful political sponsors.

His ministers will be sworn in on Friday before the government faces votes of confidence in both houses next week.

The deal followed an extraordinary few days in which Mr Di Maio called for Mr Mattarella to be impeached, Mr Conte and another prime minister-designate were tasked to form a government and failed, before Mr Conte was reinstated on Thursday evening.

Mr Mattarella even took the step of appointing former International Monetary Fund official Carlo Cottarelli as an interim prime minister until a re-election.

The breakthrough came after the League and 5-Star agreed to drop economist Paolo Savona as their choice for economy minister.

Mr Savona, an 81-year-old economist, had said previously that Italy should have a contingency plan to abandon the euro.

He will be substituted by economics professor Giovanni Tria, another little-known figure.

Mr Savona will be in government as European affairs minister, a less powerful role but one which will still allow him to negotiate with Brussels and speak on EU issues.

No sooner had the coalition deal been announced than friction flared with Brussels over remarks by European Commission chief Jean-Claude Juncker about Italy's impoverished south.</s>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.

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.

The relatively unknown law professor met Mr Mattarella late on Thursday to put forward a list of ministers, which the president has accepted.

“All the conditions have been fulfilled for a political, Five Star and League government,” said Luigi Di Maio, the Five Star chief, and Matteo Salvini, the League leader, in a joint statement after a day of talks in Rome.

The deal will bring at least temporary calm to a political crisis that has embroiled Italy for weeks. The tumult raised questions - in Brussels and among investors around the world - about whether the rise in Italian populism and the collapse of traditional parties posed a fundamental threat to the country’s future in the euro zone.

The formation of the new government will at least temporarily allay those concerns, because it will remove for now the threat that snap elections will be called later this summer, a prospect which worried investors because it could have bolstered support for anti-EU parties.

The populist leaders stepped back from their insistence that Paolo Savona, an 81-year-old eurosceptic, should serve as finance minister. The choice had been vetoed by Mr Mattarella, prompting the M5S and the League to call off their deal. Savona will now serve as EU minister instead.

But there are still many unknowns about how the new administration - an uneasy alliance between two former political opponents, both jockeying for power - will govern Italy.

Mr Salvini, the bombastic and xenophobic leader of the League , who rose in recent years on the back of incendiary and racist statements about migrants and Roma, will take on the role of interior minister.

Mr Salvini has campaigned on the promise of mass deportations of migrants and said a new government would build detention centres around Italy. He is also a fierce critic of Brussels and has called for closer ties to Russia.

Mr Di Maio will take on a powerful new post that will combine labour and industry portfolios in a move that could mark big changes to labour and environmental policies, given the M5S’s stated opposition to big industry.

Giovanni Tria, a little known economics professor, was named to lead the finance ministry. While Mr Tria has been critical of the EU, he is not been seen as an advocate for an exit from the euro zone.

The new deal was blessed by Mr Mattarella, who earlier this week nominated a technocrat, Carlo Cottarelli, to serve as prime minister. Those plans were put on hold after Mr Mattarella opted to give the populists more time to reach a new agreement.

The new government is expected to take a far more antagonistic stance against Brussels than the previous government, headed by the centre-left Democratic party.

But the alliance between the M5S and the League will have only a relatively narrow majority in the Italian senate, easing concerns among investors and officials in Brussels over the new government’s decision-making.

While both parties are populist in nature, and have railed against Brussels and Italian “elites”, they have long been natural opponents in politics.

Wolfango Piccoli, the co-president of Teneo Intelligence in London, said: “They are both led by young and ambitious leaders who share prime-ministerial ambitions. Due to mutual distrust, it has taken both parties over 70 days to reach a deal and choose an unknown third figure as prime minister.”

Their shared agenda includes plans to cut taxes, scrap a previously agreed pension plan and institute a “universal basic income”.

While many officials in Brussels sought to ease tensions with Rome this week, and backed Mr Mattarella after the president took a political risk by defending Italy’s role in the EU, Jean-Claude Juncker, the president of the European commission, issued a tough critique of Italy on Thursday. He said Italians needed to work harder, be less corrupt and stop looking to the EU to rescue the country’s poor regions.

“Italians have to take care of the poor regions of Italy. That means more work, less corruption, seriousness,” Mr Juncker said.

“We will help them as we always did. But don’t play this game of loading with responsibility the EU. A country is a country, a nation is a nation. Countries first, Europe second.” - Guardian</s>MILAN (AP) — The Latest on the drawn-out negotiations to form Italy's next government (all times local):

Italy's president has tapped politically inexperienced law professor Giuseppe Conte to be the premier who will head Italy's first populist government.

The president's office announced Thursday that Conte had accepted the role and would be sworn in Friday afternoon with Cabinet ministers.

Conte read the list of ministers and told reporters in a brief statement: "We will work with determination to improve the quality of life of all Italians. "

The announcement indicated that President Sergio Mattarella had accepted all of the ministers proposed by the anti-EU 5-Star Movement and League on their second try. The populists' choice for a euroskeptic economy minister was the sticking point that led their first attempt to form a government to fail last weekend.

5-Star Movement leader Luigi Di Maio and League leader Matteo Salvini came up with a compromise earlier Thursday that led the president to postpone trying to install a technical government until a new election could be held.

Italian president Sergio Mattarella has summoned the pick for premier by the anti-establishment 5-Star Movement and right-wing League as Italy edges toward a populist government on the second try.

Mattarella summoned law professor Giuseppe Conte to his office Friday evening, just an hour after a technical premier-designate stepped aside in a fast-changing political landscape.

Conte had been expected to teach at Florence University on Friday morning, but with signals that the 5-Stars and League might get another shot at forming a government, he grabbed a train for Rome.

The two leaders, Luigi Di Maio of the 5-Stars and Matteo Salvini of the League, announced after meeting at the parliament that they had reached an agreement to form a political government — an outcome that avoids an interim, technical government and a swift return to the polls.

A former IMF official tapped to lead Italy's government until a new election could be held has stepped aside, paving way for political government of populists.

Premier-designate Carlo Cottarelli told reporters on Thursday that "it is no longer necessary to form a technical government." He made the announcement after meeting with President Sergio Mattarella to formally renounce the post.

The leaders of two populist parties, Italy's anti-migrant League party and the anti-establishment 5-Star Movement, earlier announced they had reached a deal that would enable them to form a government.

Their first try failed when Mattarella rejected their choice of economy minister as dangerously euroskeptic.

But after they signaled they were willing to compromise, the president put Cottarelli on standby and gave them another shot.

The leader of Italy's anti-migrant, euroskeptic League party is expressing cautious optimism that he and the leader of the 5-Star Movement are back on their way to forming western Europe's first populist government.

Matteo Salvini posted a message on Facebook after meeting with 5-Star leader Luigi Di Maio and announcing they had reached new terms days after their initial coalition agreement was scuttled.

Salvini wrote: "Maybe, finally, we are there."

The timing of any new government was unclear, but developments were moving quickly. President Sergio Mattarella has called to his office the former IMF official he'd tapped to run a possible interim government of technocrats. Carlo Cottarelli was expected to formally step aside.

Salvini says it took "dedication, coherence, listening, patience, good sense, head and heart" to get a second chance while facing "many obstacles, attacks, threats and lies."

Italy's populist leaders are getting a second shot at putting together a government.

The leader of the 5-Star Movement, Luigi Di Maio, and League leader Matteo Salvini said in a statement Thursday that they have achieved "the conditions for a political government."

The political landscape in Italy has shifted swiftly in the last two days. President Sergio Mattarella put on hold a possible interim government of technocrats Wednesday after getting signals that the two populist parties were willing to compromise on the composition of their Cabinet.

Salvini and Di Maio's initial attempt to form western Europe's first populist government foundered early in the week when Mattarella refused their choice of an anti-euro economy minister.

As a next step, Mattarella has called the IMF official he named as premier-designate of a technical government to a Thursday night meeting. Carlo Cottarelli was expected to formally step aside.

The leaders of two populist parties in Italy are meeting in Rome amid revived prospects for a political government after their first attempt failed on their choice of a euroskeptic economy minister.

A day after the possibility of a governing coalition between the anti-establishment 5-Star Movement and the right-wing League was revived, League leader Matteo Salvini canceled appointments in northern Italy to travel to Rome.

Salvini declined to respond to reporters' questions when he arrived at the Rome airport. News agency ANSA said he went straight to the lower house of parliament, where he met with 5-Star leader Luigi Di Maio.

The possibility that the 5-Star government and the League could come up with a government acceptable to Italy's president buoyed financial markets, despite their euroskeptic views.

Financial markets have calmed amid signs that Italy may avoid imminent elections after President Sergio Mattarella gave two populist parties time to figure out whether they can agree on an alternative to a euroskeptic economy minister.

The leader of the 5-Star Movement, Luigi Di Maio, has proposed moving the contested ministerial candidate to a different Cabinet post. League leader Matteo Salvini, meanwhile, said he isn't closing the doors on any solution.

But he's also showing some resistance to the change, saying "if someone in Berlin or Paris wakes up in a bad mood that doesn't mean that an Italian minister gets kicked out."

Mattarella gave the leaders time to form a coalition government after markets plunged on news of an interim administration that would take Italy to new elections.</s>The rightwing Brothers of Italy Party (FdI) may form a coalition government with the far-right League party and the populist Five-Star Movement and FdI's leader Giorgio Meloni could become defence minister - if League chief Matteo Salvini agrees to give up his eurosceptic pick of finance minister, League sources told Adnkronos on Thursday.

Salvini met Meloni - his conservative ally - at the Italian parliament in Rome on Thursday, according to FdI lawmaker Ignazio La Russia, who took part in the meeting.

Salvini was also due to hold talks with Five-Star leader Luigi Di Maio and with their nominee premier, law professor Giuseppe Conte, to agree on moving the populist economy minister designate Paolo Savona to another cabinet job, the League party sources told Adnkronos.

It was however unclear if 81-year-old Savona is willing to accept another ministerial post, the sources said.

Talks over the nascent populist coalition government collapsed on Sunday when in a rare move, Italy's pro-European president Sergio Mattarella refused to endorse Savona as finance minister, citing concerns from investors at home and abroad.

Mattarella signalled he was ready to install a technocrat cabinet if a deal could not be reached, but in a bid to stave off a snap election in July has decided to give Salvini and Di Maio more time to form a government.

Italy has been in political limbo since the inconclusive 4 March national election in which populist parties made strong gains but no party or bloc won an outright parliamentary majority.

Several rounds of talks with Italy's party leaders since the March polls collapsed amid a seemingly irreconcilable mesh of demands.
Giuseppe Conte is sworn in as the new Prime Minister of Italy at the head of a populist coalition, formed by the Five Star Movement and the Northern League. Conte had previously given up on trying to form a government after President Sergio Mattarella had vetoed Conte's original choice for Minister of Finance, but a different candidate was agreed to yesterday.