The Latest on Italy's political crisis (all times local):

12:05 p.m.

Italy's Premier-designate Carlo Cottarelli says "new possibilities" have emerged to form a government based on the outcome of March 4 elections.

Efforts by two populist parties to create a coalition government failed over the weekend after President Sergio Mattarella vetoed the proposed economy minister of the 5-Star Movement and League, the two big vote getters in March.

Mattarella then turned to Cottarelli to form a neutral government of technocrats to lead Italy until early elections. But on Wednesday, Cottarelli said in a statement that "new possibilities for the birth of a political government have emerged" during his consultations.

The statement added: "This circumstance, also considering market tensions, has compelled him to wait for further developments."

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10 a.m.

Italy's premier-designate Carlo Cottarelli has returned to the presidential palace for informal consultations amid continued market turmoil and uncertainty about the prospects of his proposed government.

Milan's stock index opened slightly higher Wednesday after Asian markets slid on investor concern that a new election could become a referendum on whether Italy will stick with the euro currency.

The uncertainty rose after President Sergio Mattarella's designation of Cottarelli, a former IMF official, to head a politically neutral government failed to calm markets. The appointment also riled populists whose attempts to form a government were quashed by Mattarella over their designation of a euroskeptic economy minister.

Cottarelli returned for informal discussions Wednesday with Mattarella after asking for more time to come up with a list of cabinet ministers. He left without comment.