Ending a contentious political stalemate that frightened global

Here is the skeleton of option (A) with details removed:

Ending a stalemate that frightened leaders, Enrico has formed a rare coalition government that united ... – and included ... – to guide Italy, Europe’s third-largest economy, out of stagnation.

There are two events:
Leaders frightened
Govt formed

Since leaders were frightened before the Govt was formed, we can express the events in two ways:

Option (A) - Ending a stalemate that frightened (simple past) leaders, Enrico has formed (present perfect) a rare coalition government...
We don't know whether Enrico has just formed the Govt or did he form it some time back. There is no need to assume that he formed it some time back and hence use of present perfect may not be incorrect. But the problem with option (A) is that 'united' and 'included' use past tense. In that case, the use of present perfect for forming the Govt is incorrect. The formation of the Govt united liberals and conservatives and included women and non white ministers. Hence, 'uniting' and 'including' did not happen before the Govt was formed.

Option (B) - Ending a stalemate that had frightened (past perfect) leaders, Enrico formed (simple past) a rare coalition government...
Here, the tenses are correct. Past perfect for 'Leaders frightened' and simple past for 'Govt formed'.

As for the use of 'with'.

Italy here is referring to the country. The country has Europe's third largest economy.

Hence the use of both these is correct:
... to guide Italy, with Europe's third largest economy, out of stagnation.
... to guide Italy, which has Europe's third largest economy, out of stagnation.

Note that we could also refer to Italy, Europe's third largest economy. We could say that Italy is Europe's third largest economy as done in option (A). That is correct too. But option (A) has other errors.