Renzi gets government-formation mandate
Investors giddy over premier-designate, but obstacles remain17 February, 15:22
The premier-designate must now hold talks scheduled to begin Tuesday with other parties on setting a government program and forming a new cabinet.
If successful, the 39-year-old will become the youngest Italian premier in history.
He would also become the third-straight non-elected premier, after Mario Monti and Enrico Letta. Renzi forced Letta's ouster Thursday at a meeting of the PD, the largest party in parliament, in which they voted almost unanimously to pull support from one of their own for failing to move more swiftly towards reforms to streamline government and jumpstart an economy ravaged by record youth unemployment and crippling debt as the country comes out of its worst postwar recession. In order to launch a new executive with Renzi at the helm, the charismatic reformer will need to win over the support of several small centrist parties and the New Centre Right (NCD) of Angelino Alfano, Letta's deputy premier and interior minister, to have a working majority in the Senate. Other challenges include convincing the people he wants to join a cabinet that may face the same insecurity that marked its predecessors. Andrea Guerra, the CEO of Italian eyewear giant Luxottica, has already refused a rumored offer to become industry minister, and former Italian premier Romano Prodi has shot down media speculation he could be tapped as economy minister.
Renzi on Monday said he needed "a few days" to form a government. "We intend to work seriously on the cabinet makeup," he said. Italian media have speculated that ministers could be named and a government agenda ready by Thursday, paving the way to launch a raft of pumped reforms that would amount to "shock therapy" for Italy's expensive and slow-moving political system and sputtering economy.
After receiving his government-formation mandate Monday, Renzi vowed to complete electoral reforms by the end of February, followed "immediately afterward by labor reforms in March, public-administration reforms in April and fiscal (reforms) in May". An election-reform bill he negotiated with ex-premier Silvio Berlusconi is scheduled to go before the House Tuesday. Soon after Renzi spoke, the yield on 10-year Italian bonds fell to 3.60%, its lowest since January 24, 2006, while the spread between 10-year Italian paper and the ultra-safe German bund narrowed to 191 points. Both figures indicate renewed investor confidence in Italy's ability to rebound from its worst postwar recession, in keeping with market optimism since a Renzi government became all but certain last week. On Friday, the Milan bourse rose to its highest level since July 2011 on the prospect of the business-friendly mayor of Florence taking over the national government. Meanwhile on Monday trading was virtually static.