Italian center-left politician Enrico Letta named a coalition government on Saturday, making one of Silvio Berlusconi's closest allies deputy prime minister and ending two months of damaging political stalemate.

Letta has said his priorities would be the economy, unemployment and restoring faith in Italy's discredited political institutions as well as trying to turn Europe away from austerity to focus more on growth and investment.

An inconclusive general election in February left Italy, the euro zone's third-largest economy, without effective government, threatening investor confidence and holding up efforts to end a recession set to become the longest since World War Two.