The new Italian government took office on Friday, ending months of deadlock that saw the country avoid snap elections.
New Prime Minister Giuseppe Conte, 53, was sworn in at the head of the first populist government in an EU founding member that was forged by the Five Star Movement and the far-right League.
"The new right is in power," declared left-leaning daily La Repubblica.
The handover of power follows an inconclusive March election and months of political turmoil which had spooked global financial markets and spread unease among Italy's EU partners.
Reaction to the new government was wary, with concerns still running high about Italy's massive debt mountain and the future of the EU and its single currency.
The coalition -- which faces a parliamentary confidence motion early next week that it is set to win -- plans to boost public spending and wants to renegotiate EU treaties and review the bloc's economic governance.
Its proposals -- which include a monthly basic income for Italy's poorest and a two tier "flat" tax -- have worried Brussels and the financial markets given Italy's massive 2.3 trillion euro ($2.7 trillion) debt.
European powerhouse Germany vowed an "open" approach to Conte's team, while European Council president Donald Tusk said his appointment came at a "crucial time" for Italy and the European Union -- which is facing its own crisis with the departure of Britain.
European Commission President Jean-Claude Juncker was more blunt -- saying Italians need to work harder, be less corrupt and stop blaming the EU for the problems of the country's poor south.
In a sign of the direction of the new cabinet, Conte named hardline anti-migrant League leader Matteo Salvini as interior minister and Eurosceptic Paola Savona -- whose initial role as finance minister was vetoed by the president -- as European affairs minister.
The key economy ministry went to a mainstream economist, Giovanni Tria, who is close to the center-right Forza Italia party of ex-Premier Silvio Berlusconi. Mattarella had vetoed the Five Star-League's first proposed candidate for the post because of his euroskeptic views.
Five Star leader Luigi Di Maio is minister for economic development and both he and Salvini will be deputy prime ministers.
"We'll get to work to create work, for those who don't have it, for those that do but without dignity," Di Maio said.
Salvini has long wanted his new post, from where he will aim to stop "the business" of migration, cracking down on people smuggling networks and speed up expulsions of illegal immigrants in a country on the front line of Europe's migrant crisis.
"The people have voted for us to increase security and that's what we're going to do," said Salvini, an ally of French far-right figurehead Marine Le Pen.
After the swearing-in, he told reporters his first order of business would be to "reduce the arrivals and increase the expulsions" of migrants, as well as the costs associated with their care.
"The immigration question is still hot, so I will ask all who are concerned with it how we can improve it," he said.
The improbably fast rise of the grassroots Five Star Movement and its alliance with the right-wing, anti-immigrant League has been dubbed the birth of Italy's Third Republic, after Italy's political order was largely drubbed in the March 4 national vote.
"Look at this spectacle!" marveled Di Maio moments before the swearing-in ceremony. In a Facebook post featuring a photo of the Five Star ministers, he said: "There are a lot of us, and we're ready to launch a government of change to improve the quality of life for all Italians."
Financial markets bounced back on Friday after a rollercoaster ride this week. The Milan stock exchange closed up 1.49 percent as hard hit banks showed signs of recovery.
The spread, or difference in yield, between Italian and German 10-year government bonds, fell to 217 basis points after crossing the symbolic threshold of 300 basis points on Tuesday.
However the new government will have to square its reforms with its debt pile which represents 132 percent of its gross domestic product, more than double the EU's 60-percent ceiling.
Pictet Wealth Management economist Frederik Ducrozet that Italy was the only "highly indebted" euro nation not to embark on a structural reforms program, while the European Central Bank tries to wean the eurozone off its massive monetary support.
"It's the elephant in the room, because the problem was never resolved. There's no easy option if Italy needed help tomorrow."
