Italy's Napolitano speeds search for new government

ROME Tue Apr 23, 2013 2:25pm EDT

1 of 5. Italy's newly re-elected president Giorgio Napolitano waves at the end of his speech at the lower house of the parliament in Rome, April 22, 2013.

Credit: Reuters/Tony Gentile

Related Video

Related Topics

ROME (Reuters) - Italy's president held urgent talks on Tuesday aimed at naming a prime minister to head a coalition government backed by the rival parties on the center-left and center-right and end two months of post-election stalemate.

Hopes that a government can be formed quickly gave a further boost to financial markets on Tuesday, with the yield on 10-year Italian government bonds dropping below 4 percent and the spread, or risk premium over German bonds, narrowing further.

Former Prime Minister Giuliano Amato is widely considered to be the favored choice of President Giorgio Napolitano, who has the final say and is expected to make the appointment late on Tuesday or Wednesday.

The young center-left mayor of Florence, Matteo Renzi, also emerged as a possible candidate.

Silvio Berlusconi's center-right People of Freedom (PDL) party said it had no objections to Renzi after his name was suggested by the center-left Democratic Party (PD) late on Monday.

But Renzi, 38, who opinion polls indicate is the country's most popular politician, later played down the possibility.

"It's the hypothesis which is most surprising and least probable, I don't think it's on the table," he told reporters.

Delegations from the PDL and the PD will meet separately with Napolitano on Tuesday to make their proposals for who should lead the country following February's inconclusive election.

The 87-year-old Napolitano is expected to make the appointment after completing his round of meetings with parties, raising the possibility that a government could be in place by the weekend.

MULTI-PARTY CABINET

Whether the new prime minister is Renzi, Amato or a surprise third figure, he is likely to forge a multi-party cabinet to take over from the technocrat government of Monti, who was appointed in late 2011.

Despite the market euphoria, a broad coalition between the right and left, which are far apart on most issues, might struggle for stability or to obtain the parliamentary backing needed for vital economic and political reforms.

The euro zone's third largest economy has been the most sluggish in Europe for more than a decade and mired in a deep recession since the middle of 2011, with no recovery in sight.

At the election the center-left narrowly won a majority in the lower house but failed to win control of the Senate.

Pier Luigi Bersani, who announced his resignation as head of the Democratic Party last week, angrily blamed "traitors" in his own party for sabotaging the center-left's presidential candidates but said the party would have to get over its divisions.

"We have to find some semblance of order otherwise we can't be useful to this country," Bersani told a meeting of PD officials in Rome.

Its inability since February to cut a deal with either Berlusconi's center-right or the shock new third force of Beppe Grillo's anti-establishment 5-Star Movement has left the country in limbo.

Renzi unsuccessfully challenged Bersani for the PD leadership last year and despite his popularity among the general public is viewed with suspicion by many in the deeply divided party.

Berlusconi has gone from strength to strength since the election, capitalizing on the center-left's crisis. An opinion poll on Tuesday by the Tecne polling agency gave the center-right a clear lead of around 8 points.

5-Star, which won a quarter of the vote and speaks for millions of Italians disillusioned with an entire political class, says it will sit in opposition in parliament.

It will be joined by the leftist Left Ecology Freedom party, the former partner of the PD, which said it would also refuse to take part in a grand coalition government. Berlusconi's allies in the Northern League also said they did not expect to join the governing coalition.

(additional reporting by Massimiliano Di Giorgio, Philip Pullella and Steve Scherer, editing by Barry Moody, Will Waterman and Giles Elgood)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
dareconomics wrote:
Even though Napolitano is pressing ahead with forging a government, I still believe that a second round of elections is in Italy’s future. Only a grand coalition between the left and right has a chance of forming a government. Berlusconi’s bloc is not objecting to new Democratic Left leader Matteo Renzi, so it will allow a government to form. However, the center right is now ahead in the polls by 9 points. Surely, Berlusconi must realize that he has a decent chance of forming a government after a second round of elections. Meanwhile, the 5 Star movement does nothing.

Full post with charts here:

http://dareconomics.wordpress.com/2013/04/23/around-the-globe-04-22-2013-2/

Apr 23, 2013 1:22pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Full focus