ROME (Reuters) - Italy may hold repeat elections as early as July after its prime minister-designate failed to secure any support from major political parties for even a stop-gap government, sources said on Tuesday, as markets tumbled on the growing political turmoil.
Italy has searched for a new government since inconclusive elections in March, with the head of state finally designating a former International Monetary Fund official as interim prime minister to oversee elections between September and early 2019.
But sources close to some of Italy's main political parties said on Tuesday said there was now a chance that President Sergio Mattarella could dissolve parliament in the coming days and send Italians back to the polls as early as July 29.
That prospect emerged immediately after ex-IMF official Carlo Cottarelli met the president on Tuesday afternoon and left without making any statement. Cottarelli had been expected to announce his stopgap government's cabinet after those talks.
A source close to the president said Cottarelli had made no mention in the meeting of an intention to give up his mandate and that he was simply finalising his cabinet lineup.
Major parties, though, sensed Cottarelli's mission was all but dead and called for parliament to be dissolved immediately.
"It's probable that Cottarelli will give up his mandate. It makes no sense for him to go to parliament where he would get no more than a handful of votes," said a senior parliamentarian from ex-prime minister Silvio Berlusconi's Forza Italia party.
Earlier, Italy suffered its biggest market selloff in years on fears that repeat elections would become a proxy vote on euro membership.
(Additional reporting by Giselda Vagnoni, Steve Jewkes, Dhara Ranasinghe, Helen Reid, Sujata Rao, Marc Jones and Michael Nienaber; Editing by David Stamp and Robin Pomeroy)
