Italy was able to avoid heading to another round of preliminary elections later this summer after the two parties which gathered the most votes during the elections in March - the League and the Five-Star Movement - were able to reach an agreement and form a coalition. Their new joint cabinet will be headed by Giuseppe Conte, a lawyer without a significant background in politics.
There have been concerns about the two parties and any government that they might potentially form, as both the League and the Five-Star Movement rely heavily on anti-establishment rhetorics. They have also espoused populist goals, such as increasing welfare and even potentially breaking with the European Union.
A very real concern for Europe right now is that Italy might seek debt forgiveness from the European Central Bank. Italy’s debt alone accounts for 23% of the eurozone’s (for comparison, Greece’s debt was only 3% and it still had major ramifications for the bloc).
German chancellor Angela Merkel has already spoken against the possibility of forgiving the massive Italian debt, which was also confirmed by the ECB as impossible. The issue will likely come up during the upcoming G7 meeting in Canada.
