By Giuseppe Fonte and Massimiliano Di Giorgio
Italy's anti-establishment political leaders Matteo Salvini and Luigi Di Maio reached a deal on Thursday to resurrect their proposed coalition government, averting the prospect of a new snap election which had rattled global markets.
"All the conditions have been fulfilled for a political, 5-Star and League government," 5-Star chief Di Maio and far-right League leader Salvini said in a joint statement after several hours of talks in central Rome.
Giuseppe Conte, a law professor close to 5-Star, remains the coalition's pick for prime minister, the leaders said, confirming the candidate torpedoed four days ago after the head of state rejected the parties' choice for economy minister.
Giovanni Tria, a little known economics professor, will get the key economy ministry job, party sources said, replacing the eurosceptic economist Paolo Savona who had been vetoed by President Sergio Mattarella.
Global financial markets have been recovering over the past two days after tumbling earlier this week over the specter of a new Italian election dominated by debate over the country's future in the euro zone.
Tria, a professor at Rome's Tor Vergata University, has been critical of the EU's economic governance, but unlike Savona he has not advocated a "plan B" to prepare Italy's possible exit from the currency bloc.
In recent articles he has called for a change in the EU's fiscal rules to allow public investments to help growth and, like many mainstream economists, has criticized Germany's persistently large current account surplus.
"Maybe finally we have made it, after so many obstacles, attacks, threats and lies," Salvini said on Facebook shortly after the deal was announced.
After the initial coalition attempt failed, Mattarella named former International Monetary Fund official Carlo Cottarelli to form a stop-gap government of experts to lead the country to elections. But Cottarelli failed to present a cabinet and received no support from any of the major parties.
Cottarelli said he was going to see the president later on Thursday and is expected to formally give up his mandate.
Assuming the new government gets a green light from Mattarella, Salvini will be the interior minister and Di Maio will take a powerful, newly-created joint ministry made up of the labor and industry portfolios, the parties said.
Enzo Moavero, a former EU affairs minister under the technocratic government of Mario Monti, will be foreign minister, while Savona, after his ousting as economy minister, gets the consolation prize of EU affairs minister.
There has been a general calming of financial markets after Tuesday's rout, when investor concerns prompted the biggest one-day rise since 1992 in Italian two-year bond yields and dented the euro's exchange rate.
(Additional reporting by Gavin Jones, Eleanor Biles, Giselda Vagnoni, Giuseppe Fonte and Stefano Bernabei in Rome and Stephen Jewkes and Francesca Landini in Milan, Writing by Philip Pullella and Steve Scherer; Editing by Mark Heinrich)