Italy awaits new prime minister after Letta quits

ROME, Italy – Italian President Giorgio Napolitano is due to hold talks with political parties Saturday, February 15, before choosing a new prime minister, with the nomination seen as a cinch for leftist leader Matteo Renzi.

Prime Minister Enrico Letta was forced to quit his post after his own Democratic Party backed leader Renzi in pushing for a new government to help lift Italy out of its economic quagmire.

The presidency said in a statement announcing Letta’s resignation that Napolitano would move “quickly” to resolve the crisis and name a new government that can adopt much-needed economic and political reforms.

The 39-year-old Renzi, a former Boy Scout with no experience in national government or parliament, is a virtual shoo-in for the job after carrying out his palace coup.

If nominated, Renzi will have to hold his own talks to rebuild the ruling coalition, with analysts predicting his government could be in place by the middle of next week.

Financial markets cheered as Letta earlier on Friday, February 14, stepped down after just 10 tumultuous months at the head of a fragile coalition with the center-right that had struggled to cope with a rampant economic crisis.

Moody’s on Friday improved Italy’s outlook from negative to stable, but kept its debt rating unchanged. The ratings agency said the move was not linked to the current political turmoil.

The outgoing premier smiled as he arrived at the presidential palace and thanked his supporters in a tweet after losing out in the showdown with Renzi.

“Thank you to everyone who helped,” he said in a tweet.

US President Barack Obama phoned Letta on Friday “to express his personal gratitude to the Prime Minister for his leadership and friendship,” the White House said.

Renzi had urged the Democratic Party to back a new government that could implement “profound change” and get Italy “out of the quagmire”.

The “relay” between Letta and Renzi is unpopular among Italians who would have preferred early elections, according to opinion polls, and there is concern in the party that it could end up strengthening disgraced former prime minister Silvio Berlusconi.

“What is happening is not something that should be happening in a democracy,” the 77-year-old billionaire tycoon and three-time former prime minister said at a rally ahead of local elections in Sardinia.

“I am the last prime minister who was elected by the people,” said Berlusconi, who will lead his Forza Italia (Go Italy) party’s delegation in negotiations with Napolitano on Saturday despite having been expelled from parliament last year over a tax fraud conviction.

‘We’ve had enough’

At a small protest of business owners outside the parliament building in Rome, the call was for urgent economic reforms whoever might be in charge.

“It doesn’t matter who is at the wheel,” said Paola Malabaila, head of the Industrial Union in the province of Asti in northwest Italy.

“Our problem is that there are measures that need to be implemented immediately. We need definite deadlines, we’ve had enough,” she said, explaining redundancies had increased 465 percent in her sector in seven years.

Analysts said Renzi will have to overcome the shock caused by him engineering Letta’s downfall despite an earlier gentleman’s agreement that he would not do so.

But they also said he could quickly win support if he manages to push through important reforms, and investors were supportive, with stocks rising sharply.

“The reform process will probably get a boost,” Italy’s UniCredit bank said in a research note – adding, however, that “the road ahead is not without bumps”.

The FTSE Mib index on Friday ended the day up 1.62 percent, also thanks to new data showing that the economy grew by 0.1 percent in the fourth quarter.

The preliminary result was the first positive one for gross domestic product in two years after Italy’s longest post-war recession ended in the third quarter.

Renzi still faces a tricky time rebuilding the coalition before he can finally clinch his goal of becoming the European Union’s youngest prime minister and Italy’s youngest ever government leader.

The government will be Italy’s 62nd since the war.

“He is coming to power without elections, which will make it difficult to push through strong government initiatives,” said Giovanni Orsina, a professor of political sciences at Luiss University in Rome.

“Renzi is ambitious, aggressive,” Orsina said. “But his government will be objectively stronger – if only because he will be in it instead of outside it.” – Rappler.com