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Italy appears headed toward new elections after president pumped the brakes on anti-euro populism

On Sunday, Italian President Sergio Mattarella rejected a Eurosceptic finance minister proposed by a populist coalition trying to form a new government following March elections, and when the two parties abandoned their efforts in anger, Mattarella asked former International Monetary Fund official Carlo Cottarelli to form a caretaker government Monday. Cottarelli will present his own Cabinet list to Mattarella on Tuesday, but Parliament will likely give Cottarelli and his government a vote of no confidence later this week, setting up new elections in the fall.

The antiestablishment Five Star Movement, which won a 33 percent plurality in the March elections, formed a populist coalition with the far-right League party, which won 17 percent. After Mattarella vetoed their choice of Paolo Savona as finance minister, the two parties called for Mattarella's impeachment. "Early elections are exactly what the two populist parties want, giving them a chance to rally support behind their claim that the Italian and the wider European establishments are getting in the way of the will of the people," BBC News says. The likely prospect of Five Star and the League gaining in the next election in Europe's third-biggest economy roiled markets throughout Europe and sent the euro to a six-month low.