Prime Minister Silvio Berlusconi put together a new coalition government today, ending weeks of political turmoil that aroused fears of economic instability in Italy.
The centre-right cabinet will be sworn into office later today and will have barely a year to try to relaunch the stagnant economy before general elections scheduled for May 2006.
Mr Berlusconi told reporters that his government team included new communications, health, industry and culture ministers, while the main portfolios, including the economy, foreign and interior ministries, remained unchanged.
Mr Berlusconi was forced to step down last week by two allies who demanded radical strategy changes after the centre right suffered a crushing defeat in April regional elections.
Both the rebel parties, the National Alliance (AN) and the Union of Christian Democrats (UDC), have returned to the new cabinet but have warned that it must be seen to do more for poorer voters, especially in the underdeveloped south. The prime minister was livid at being forced to quit and has emerged from the crisis with his authority severely dented.
He has promised his allies that the new team will focus on boosting industry, increasing employment in the poorer south and protecting the purchasing power of Italian families. However, his cash-strapped government will struggle to find fresh funds to finance any meaningful new projects.
The European Union has already warned Italy that it risks breaking budget deficit rules in 2005 and put Mr Berlusconi on guard not to try to spend his way out of trouble.