The Italian President has given a mandate to former European Central Bank boss Mario Draghi to form a government in Italy.
Draghi will now have to hold talks with political parties to try and muster support in parliament for an administration that will be tasked with handling the twin coronavirus and economic crises battering Italy.
The coalition government led by Guiseppe Conte collapsed collapsed last weeks and talks to salvage it have since come to nothing.
European stock markets cheered news of Draghi’s return and a subsequent government of national unity, but the euro largely shrugged it off.
“Draghi’s acceptance of a mandate and indications of a majority backing him will likely be welcomed by markets and may give some further support to European assets,” ING said in a note to clients.
Draghi was dubbed “Super Mario” as head of the ECB for steering the currency bloc through the euro crisis in the mid-2010s.
Draghi was replaced at the ECB by former International Monetary Fund boss Christine Lagarde.