27.05.201821:00:00UTC+00Bid to Establish Government in Italy Collapses as President Rejects Minister Pick

Italian Prime Minister-designate Giuseppe Conte has abandoned his efforts to establish a coalition government on Sunday after President Sergio Mattarella vetoed his pick for economy ministry, deepening the country's political upheaval and opening up the prospects for new elections.

President Mattarella said that he has agreed to all proposals but will not certify the nomination of Paolo Savona, a eurosceptic, to the pivotal economy post. Savona is a vocal critic of the single currency.

After the announcement of the vetoing of Savona, Mattarella summoned former International Monetary Fund senior official Carlo Cottarelli for a Monday morning meeting- an indication the president may be considering asking him to lead a government of unelected technocrats.

Leaders of the two parties attempting to form a government, the far-right League and anti-establishment 5-Star Movement, alleged President Mattarella of abusing his power and working under the orders of European powers. Luigi Di Maio, the head of the 5-Star, called for his impeachment.

The country has been without a working government since elections on March 4. Financial markets were thrown into chaos last week on concerns the mooted coalition would undertake a spending splurge and increase Italy's already massive debt, which is equal to over 1.3 times the country's domestic output.

After the markets closed on Friday, Moody's said it may downgrade Italy's sovereign debt rating due to the risk that the prospect government would weaken public finances and repeal a 2011 pension reform.