The political situation reflects the stranglehold on power wielded by the pro-EU establishment, which is evidently determined to preserve economic austerity at the expense of democracy.
Carlo Cottarelli, a former International Monetary Fund economist, was tasked with naming a technocrat government on Monday after President Sergio Mattarella nixed a cabinet proposed by the far-right League and anti-establishment Five Star Movement (M5S).
President Sergio Mattarella's move plunged Italy deeper into a dramatic full-blown constitutional crisis - unsafe even by the country's own chaotic political standards - with angry populists calling for the head of state's impeachment.
"While we believe the euro is undervalued versus the Dollars based on long-term fundamentals, the drivers behind its recent decline remain in place".
"I asked for the [economy] ministry an authoritative person from the parliamentary majority who is consistent with the government programme ... who isn't seen as a supporter of a line that could probably, or even inevitably, provoke Italy's exit from the euro", Mattarella said.
Shortly afterwards, the president's office summoned Cottarelli, the IMF's former director of fiscal affairs, for a meeting on Monday.
Italy's president has come under fire after he vetoed the proposed economy minister of what would have been Western Europe's first populist government, ushering in the likelihood of a new election within months. Cottarelli is known as "Mr. Scissors" for making cuts to public spending.
Not content with meddling in the policymaking of Italy's popular parties, the old elite then instructed them on who they could include in their government.
USA dollar and Euro bank notes are photographed in Frankfurt, Germany, in this illustration picture taken May 7, 2017.
But a growing feeling that Italian politics are far from out of the woods quickly caused a Milan stock market downturn, also sparking a reversal in Paris and Frankfurt, as well as weakness in the euro. Italy's current debt-to-GDP ratio is 130% of GDP, the highest in the eurozone after that of Greece.
European capitals watched nervously on Monday and markets tumbled as Carlo Cottarelli stepped forward to head a temporary new Italian government.
"In Italy, there is a problem of democracy".
The candidacy for economy minister has been the main stumbling block for the creation of the new cabinet in the country.
Angela Merkel said Germany was prepared to work with any government formed in Italy.
"People aren't stupid - Italy is a country with a very large amount of private savings and most don't want to revert to being paid in lira".
Appoint a technocratic government to rule for the remainder of 2018, with elections delayed until early next year.
"The upcoming elections will not be political, but instead a real and true referendum. between who wants Italy to be a free country and who wants it to be servile and enslaved", League leader Matteo Salvini said on Monday. As recently as 2014, Giorgio Napolitano did not accept Matteo Renzi's suggestion of Nicola Gratteri as minister of justice.
5-Star leader Luigi Di Maio, whose party won the most seats at an inconclusive March 4 vote, demanded that parliament impeach Mattarella. Many observers worry that they will increase their combined majority in a new election.
Mattarella justified his veto decision by citing concern from investors at home and overseas over the nomination of fiercely eurosceptic Savona and the possible impact on the markets. No part of the Gatestone website or any of its contents may be reproduced, copied or modified, without the prior written consent of Gatestone Institute.