ROME: Italy’s populist parties on Thursday reached a last-ditch deal to form a coalition government, in the eurozone’s third largest economy.

The anti-establishment Five Star Movement and far-right League party agreed to restart coalition negotiations after their initial bid to deliver Italy an anti-austerity, nationalist government collapsed over the weekend.

Italy has been in the throws of political turmoil for almost three months after a March general election failed to deliver a clear winner.

“All the conditions have been met for a M5S-League government,” said the party leaders in a joint statement sent by the Five Star Movement.

President Sergio Mattarella on Sunday blocked the coalition’s pick for economy minister, the eurosceptic Paolo Savona, causing their bid for power to fall through.

Mattarella then asked pro-austerity economist Carlo Cottarelli to form a caretaker government.

Fresh elections seemed like the most likely outcome, however, after it became clear Cottarelli’s government would not pass a vote of confidence in parliament.

In light of the populist’s successful talks, Cottarelli announced Thursday that he was giving up his mandate to form a technocrat government.

“The formation of a political government is by far the best solution for the country, because it avoids the uncertainty that would arise with new elections,” said Cottarelli after meeting with Mattarella.

The president is due to meet with lawyer Giuseppe Conte - the populist’s pick for prime minister - at the presidential palace at 1900 GMT where is widely expected to give him for the second time a mandate to form a government.

According to Italian media Savona - who Mattarella said he could not accept as economy minister due to his adversion to the euro - will be proposed as Minister for Foreign Affairs.

The media suggests the role of economy minister will go to Giovanni Tria, a political economy professor in favour of slashing taxes but committed to keeping Italy in the single currency.

Sources from the presidential palace suggest a swearing-in ceremony for the new government could take place as early as Friday, with a vote of confidence in parliament following on Monday.

“Commitment, coherence, listening, work, patience, common sense, head and heart for the good of Italians. Perhaps we are finally there, after so many obstacles, attacks, threats and lies,” Salvini rejoiced on Facebook.