The leader of the Italian far-right party the League, Matteo Salvini, has cancelled political rallies to return to Rome, in what was seen as a sign that a political impasse that has left the country without a fully functioning government for months may soon be coming to an end. Salvini was heading back to the capital to meet his coalition partner, Luigi Di Maio, the head of the anti-establishment Five Star Movement, after the Italian president, Sergio Mattarella, gave the pair more time to form a government.

Italian press reports indicated that any agreement to form a new populist government involving the League, formerly known as the Northern League, and M5S would include the nomination – again – of Giuseppe Conte, a formerly obscure law professor, to serve as prime minister. But Di Maio and Salvini are expected to back down on their earlier insistence that Paolo Savona, a Eurosceptic who has called Italy’s adoption of the euro a “historic mistake”, should serve as finance minister. There were also small indications that the populists would try to assure the markets they were not planning any big moves to try to hasten an Italian exit from the euro – a fear that roiled markets this week.(theguardian)…[+]