Hard-line eurosceptics have swept all the key posts in the budget and finance committees of the Italian parliament, shattering the brief calm in the bond markets and guaranteeing a showdown with Brussels over spending rules.
The cohort of anti-euro legislators from the Five Star Movement and the "Italy First" Lega party will have a powerful say of over fiscal policy and may make it almost impossible for technocrat ministers in the new Italian government to enforce the EU's draconian "bail-in" rules for banks.
Yields on two-year Italian debt rocketed by 35 basis points to 0.93 per cent, and the risk spread over 10-year German Bunds jumped to 240 points. The Milan bourse fell 2 per cent, led by Unicredit and Ubi Banca.
The two leading apostles of the Italian anti-euro movement have been elected to pivotal posts.
Claudio Borghi, the Lega's economics chief, will be chairman of the budget committee in the lower house. Prof Alberto Bagnai, a Lega convert from a Left-wing background, will be chairman of the finance committee in the Senate. Both are foes of monetary union.
"These guys are extremely eurosceptic and they have many ways of constraining the government," said Lorenzo Codogno, former chief economist for the Italian treasury and now at LC Macro Advisors.
"They can control which amendments go through and there are usually thousands of them for the budget."
Markets had been lulled into a false sense of security by soothing words from the new finance minister, Giovanni Tria, who gave a pro forma assurance that there was "no plan to leave the euro" and that the coalition would stick to responsible spending plans.
It was never going to be so simple. Both the Lega and the Five Star "Grillini" abandoned formal plans for a euro referendum long ago.
The relevant issue is whether their budget-busting proposals for a flat tax, a universal basic income, a rollback of pension reforms, and a cancellation VAT rises - all costing 6 per cent to 7 per cent of GDP - are compatible with euro membership.
The first major clash is likely in September when the coalition reveals its budget plans.
Italy is supposed to tighten fiscal policy by 1 per cent of GDP to comply with the "cyclically adjusted" target under the Stability Pact.
Rome and Brussels are so far apart that it looks almost impossible to close the gap.
Five Star's Carla Ruocco, a Neapolitan economist with ties to Ernst & Young, will be chairman of the house budget committee. She says the euro has "reduced Italy to a Third World country".
Daniele Pesco will be chairman of the senate finance committee. He fought a crusade to overturn the EU banking rules, calling the "bail-in" measures for small investors (essentially depositors) "absolutely unconstitutional".
The new Italian government is sui generis. The prime minister is a figurehead. Power lies with Five Star's Luigi di Maio and above all with the Lega strongman, Matteo Salvini, who calls the euro an instrument of German economic occupation and has succeeded in placing his key lieutenants at the nodal points of parliament.
Prof Bagnai hosts Italy's anti-euro summit each year at the University of Pescara. He dismisses the eurozone's Fiscal Compact and Stability Pact as nonsense foisted upon Europe by ideologues in the German finance ministry.
Borghi is the author of the "minibot" plan for a parallel -currency. While the minibot is ostensibly a form of small IOU notes to pay off €70 billion ($118b) of state arrears, it serves a double purpose.
It gives Italy a defensive weapon if the European Central Bank ever tries to exert pressure by choking liquidity to the banking system and is ultimately a way of subverting the euro from within.
Borghi has made no secret of his hopes for a new Medici "florin", once telling this newspaper that the minibot is a device to habituate the public to a fiat paper.
"When the time comes we can switch to this new currency. It can be done electronically," he said.
His argument is that EU cannot dictate terms since Italy is a net contributor to the EU budget, and does not want a bail-out.
Codogno said Italy and Europe are entering dangerous waters. The ECB will halt bond purchases by the end of the year, taking away a crucial shield for the Italian debt markets.
Sophisticated investors are by now aware that the anti-euro camp in the coalition has no fear of a financial crisis, and might welcome it as a beneficial episode to "break the system".
"It is precisely the fear that the Italian government's reaction to a crisis would be Italexit, that risks making it a self-fulfilling prophecy," he said.
Borghi, a former trader at Deutsche Bank, said the best solution for everybody is for Germany to leave the eurozone.
If Germany refuses to do so, he argues that Italy can pass a law converting its debt obligations into florins or lira overnight.
"Europe has brought us a depression worse than 1929. It has led to entire peoples being broken and humiliated, like the Greeks, all for the sake of preserving the infernal instrument of the euro. This whole disaster has been adorned by a chain of lies, shouted ever louder because they are afraid that the colossal damage they have done will be discovered," he said. Welcome to the budget committee.