Italy's president appointed former International Monetary Fund official, Carlo Cottarelli , as interim prime minister on Monday with a task to try and form a new government, and bring order to political chaos.

The euro zone’s third-largest economy has been seeking a new government since inconclusive March elections, with anti-establishment forces abandoning their efforts to form a ruling coalition at the weekend after a standoff with the president over their choice of economy minister.

The political crisis that has engulfed Rome threatens to bring about another bitter battle over the future of the EU, two years after the UK voted for Brexit. The uncertainty promped a selloff on Italian markets on Monday.

Earlier, Emmanuel Macron, the French president, praised Mattarella for showing “great spirit of responsibility” in protecting Italy’s “institutional and democratic stability”. Germany’s Angela Merkel said she would be willing to work with any coalition government in Italy, but economic policy had to be dictated by eurozone rules.