Italian govt takes shape after Meloni and Berlusconi make peace

Italy's next cabinet is taking shape after rightist leader Giorgia Meloni, set to be appointed prime minister, defused tensions with her coalition partner Silvio Berlusconi over key ministerial posts.

Meloni's Brothers of Italy party led a right-wing alliance including Berlusconi's Forza Italia and Matteo Salvini's League to victory in last month's election, promising political stability in the country after years of short-lived governments.

However, tensions have been running high in the alliance after most Forza Italia senators refused last week to back the election of Ignazio La Russa from Brothers of Italy as Senate speaker.

Political sources said Berlusconi was furious with Meloni due to her reluctance to accept some of his demands on cabinet positions, but the two leaders appeared to have settled their differences at a meeting on Monday.

Senior coalition figures say they hope the new government can be sworn in as early as next week.

Giancarlo Giorgetti looked well placed to become economy minister. Giorgetti, the industry minister in Mario Draghi's outgoing government, is considered to be one of the League's most moderate and pro-European figures.

Giorgetti will have to balance the financial stability of the euro zone's third largest economy, whose public debt is worth around 145% of national output, with the coalition's tax-cutting promises.

Italy will also need to tackle record-high inflation and surging energy costs which are hurting firms and families. Coalition sources said energy-related matters are likely to remain in the hands of the ecological transition ministry.

The frontrunner to succeed technocrat Roberto Cingolani in the job is Gilberto Pichetto Fratin, a coalition source said. Pichetto Fratin is a long-time Forza Italia politician who served as deputy industry minister in the outgoing administration.

Berlusconi's party is also expected to take the foreign ministry with Antonio Tajani, a career politician and ally of Berlusconi who has briefly served as president of the European Parliament, a separate source said.

League chief Salvini will also join the cabinet, his party said, although it was still unclear in which role. The sources said he could be appointed infrastructure minister, while the interior minister's job he had originally sought could go to a technocrat close to him.

The defence ministry is another key position with the ongoing war in Ukraine. Brothers of Italy's Adolfo Urso, previously head of the parliamentary committee on security, is the frontrunner for the position, one source said.