Italy's new coalition: Conte PM & Di Maio foreign minister as government sworn in

"While Italy's new government will improve the mood between the EU and Rome, there's little room for pro-Europeans to be complacent. First of all, the government may not last long. The Five Star Movement and Democratic Party have spent the last few years attacking each other and it will be difficult to establish trust," Luigi Scazzieri, a research fellow at the Centre for European Reform think tank, wrote in a note on Thursday.

He also warned that the League, although now out of government, is not to be discounted.

"The new government is likely to face stiff opposition from Salvini and the League," he wrote, adding that while the crisis has dented Salvini's popularity, " it is a mistake to think he will not recover."

"In opposition, his rhetoric will be even sharper than it was in government, and the League will become even more radical and eurosceptic," Scazzieri said, flagging that as other right-wing parties become weaker, Salvini could impose his dominance and return the League "to power at the head of a right-wing coalition that puts Italy on a collision course with Brussels."