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Italian prime minister resigns amid pressure, deepening political crisis

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Italian prime minister resigns amid pressure, deepening political crisis

Italian Prime Minister Giuseppe Conte said he will resign from his post later in the day, opening way for the formation of a new coalition or fresh elections in Italy.

Conte had served as Italian premier since last year after being nominated by the ruling coalition of the Five Star Movement and the right-wing League party. He stepped down after League leader Matteo Salvini called for new elections amid persistent policy differences with Conte and the Five Star Movement, led by Luigi di Maio.

In an address to parliament, the prime minister rebuked Salvini for following his own personal and party interests, adding that the move may hurt the economy, which is already facing a high deficit.

A day before, the Five Star Movement said it will back Conte in a potential no-confidence motion as the party also considered forming a coalition with the opposition Democratic Party to derail League leader Salvini's plans to hold an early election. Conte's resignation, however, eliminates the need for a no-confidence motion.

President Sergio Mattarella now holds the power to call other parties to make a coalition or he may announce fresh elections.

Italy's FTSE MIB index was down 0.8% as of about 10.45 a.m. ET while yields on 10-year Italian bonds shed 10 basis points to 1.34%, down 1.66 percentage points over the past year.