Italy's anti-establishment Five-Star Movement and the center-left Democratic Party (PD) reached an agreement Wednesday to form a new coalition goverment, setting aside years of hostility to avert a snap election.
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Following days of often tense and difficult talks, the leaders of both parties told Italy's president Sergio Mattarella that the new government should once again be led by the outgoing prime minister Giuseppe Conte.
A "political agreement with the PD" was reached to form a new majority in government, the head of Five-Star, Luigi Di Maio, said upon leaving a meeting with Mattarella on Wednesday.
The two sides still need to agree on a shared policy platform and cabinet members, but Five-Star chief Luigi Di Maio and his PD counterpart Nicola Zingaretti said they had pledged to find common ground for the good of the country.
Mattarella summoned Conte for talks on Thursday at 9.30 a.m. and was widely expected to hand him a fresh mandate.
The previous coalition made up of Five-Star and the far-right League collapsed this month when League leader Matteo Salvini withdrew from the alliance hoping to trigger an early election and cash in on his surging popularity.
But his move backfired when Conte refused to resign immediately, giving Five-Star and the PD time to try to overcome their fierce mutual animosity and agree to a government that had previously appeared impossible.
An opinion poll in daily Corriere Della Sera on Wednesday showed Salvini's approval rating had plunged by 15 points since he pulled the plug on the government, and is now 16 points behind Conte's.
"The only thing that unites them is their hatred of the League," Salvini said bitterly after meeting President Sergio Mattarella in an effort to convince him to call elections.
"Millions of Italians are being held hostage by a hundred parliamentarians who are looking to cling onto their posts."
The prospect of a new administration led by Conte, a pro-EU social-democrat academic who is considered close to Five-Star, has buoyed markets. A virtually unknown lawyer when he was chosen by the League and Five-Star to lead their new government last year, has good relations with Mattarella.