The coalition unites two of the three main Italian groups on the right
Italian Prime Minister Silvio Berlusconi has created a powerful new centre-right party called People of Freedom.
The three-day founding congress of the bloc formally fuses Mr Berlusconi's Forza Italia with the "post-Fascist" National Alliance of Gianfranco Fini.
The coalition unites two of the three main Italian groups on the right.
Mr Fini used to be politically close to the ideology of Italy's wartime Fascist dictator Benito Mussolini.
But since the end of the 1990s, the National Alliance has shifted towards the mainstream of Italian politics and Mr Fini has distanced himself from Mussolini's policies.
He dissolved the National Alliance - created in 1995 - at a congress on 22 March. He is currently Speaker of the Chamber of Deputies, the lower house.
Mr Berlusconi told the congress in Rome: "We want with this (patriotic) spirit to open a new page of a new season, a season that will be decisive for the weight the Italy will have in Europe and in the world."
In elections last April Mr Berlusconi, a media tycoon and Italy's richest man, won a third term as prime minister.
The People of Freedom (Il Popolo della Liberta) coalition is expected to make the Italians a stronger force in the European Parliament's largest party grouping - the conservative EPP-ED - after the June European elections.
The right-wing Northern League has opted to stay outside the People of Freedom.