Former Italian Prime Minister Mario Monti described the country's populist parties as having lost some of their teeth.

"It will be a very relevant force, but not necessarily a very dominant force," he told CNBC Friday regarding the country's Five Star Movement, Italy's premier populist and Euroskeptic group.

"Concerning the two populist movements in Italy, the Five Star Movement and the Northern League, of course I am concerned, but I must also underline that both have put a lot of water into their anti-EU wine and anti-euro wine, especially after the defeat of Marine Le Pen in France. Now the language they have in Italy is much less opposed to the EU and to the euro."

Populist parties in Italy garnered a collective 50 percent of votes in the country's last general election in 2013 and new elections are due before May 2018.

Greater euro zone integration is not off the table, the former leader believes, thanks to the election of President Emmanuel Macron in France whose opponent, Marine Le Pen, brought France's far-right Front National closer to power than any time in its history. Populist politics are on the rise in Europe, with more than 30 million people voting for broadly right-wing populist parties in EU countries in the last five years.

Turning to financial issues, Monti addressed Italy's banking woes, which on Thursday saw Italian lender Banca Carige fail to win backing from banks in a critical cash call. Italy's banks have been plagued by non-performing loans and undercapitalization following a prolonged recession and sovereign debt crisis in 2011.