MarketWatch First Take: Here’s why Italy and financial markets are still headed for a showdown

Will investors really forget about Italy so soon after last week’s turmoil?

Telling parliament that a “new wind” was blowing in Italy, newly installed Prime Minister Giuseppe Conte on Tuesday served up a reminder that the coalition government he heads remains on a collision course with its eurozone partners and financial markets as they attempt to shake off years of austerity.

In his maiden speech, Conte, the little-known academic tapped to lead the government formed by the antiestablishment 5 Star Movement and the hard-right League, promised to implement the pair’s main fiscal policy priorities. These include cutting corporate and individual taxes to as low as 15% and expanding welfare benefits to the country’s poor and unemployed.

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