Immigrant deportation part of new far-right government agenda in Italy

A man stands in front of an electronic board showing Japan's Nikkei average outside a brokerage in Tokyo

The M5S and the League joined forces and were set to form government with Independent candidate Giuseppe Conte as leader.

In a last-minute shuffle of cabinet posts aimed at appeasing Mattarella, Conte remained but an 81-year-old euro-skeptic economist, Paolo Savona, was shunted from the economy minister's post to a European affairs position.

But immigration is Salvini's primary bugbear and the newly minted deputy prime minister in Italy's populist coalition government has added a stop in migration hotspot Pozzallo.

Matteo Salvini and Luigi Di Maio, the leaders of the right-wing League and euroskeptic 5-Star Movement, respectively, appeared at political rallies in several Sicilian cities a week before municipal elections are held on the island region.

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

After the initial attempt to form a government failed, Mattarella picked Carlo Cottarelli as interim prime minister.

The 5-Star Movement is parliament's largest party thanks to support from southern Italy, where voters in the March election liked Di Maio's promise of a minimum income for the unemployed. In a Facebook post featuring a photo of the 5-Star ministers, he said: "There are a lot of us, and we're ready to launch a government of change to improve the quality of life for all Italians".

The new government would be expected to take a strong Euroskeptic line and seek confrontation with Brussels on eurozone governance, the European Union budget, Russian Federation sanctions and migration.

A controversial deal between Italy's former government and authorities in Libya has led to a drop in overall arrivals since last summer.

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.

Conte has been appointed prime minister and, along with his cabinet, will be sworn in on Friday. With Savona replaced by Giovanni Tria, an economics professor who has never adocated leaving the eurozone, Mattarella finally gave his approval on Thursday.

The government's critics say its plan to repatriate migrants is unworkable and risks fomenting racism and politicising a humanitarian issue.

However the new government will have to square its reforms with its debt mountain, which represents 132 percent of its gross domestic product, more than double the EU's 60-percent ceiling.

French leader Marine Le Pen hailed the new government as "a victory of democracy over intimidation and threats from the European Union".

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