* New cabinet expected to be in place by weekend
* No word on key economy ministry post
* Renzi promises ambitious reforms but details sketchy
By Massimiliano Di Giorgio
ROME, Feb 18 Italian centre-left leader Matteo
Renzi began the delicate task of trying to form a new government
on Tuesday, facing questions about how he will fill key
ministerial posts and the details of his ambitious reform
Renzi has promised a rapid programme of reforms, pledging to
tackle the electoral and constitutional system, overhaul the
public administration, and reform labour market and tax rules
all within four months of taking office.
"The work's going well, we're relaxed," Graziano Delrio,
Renzi's right-hand man in the coalition talks, told reporters as
meetings began to form Italy's 65th government since World war
Two. "We'll be ready by the weekend."
Talks began with the smaller parties in the current ruling
coalition, with the main meeting expected later in the evening
between Renzi, who leads the Democratic Party, and Angelino
Alfano, leader of the centre-right NCD party, whose support will
be vital to forming majority in parliament.
But a day after he was given a mandate to form a new
government, Renzi, the 39-year-old mayor of Florence, has
already begun to experience some of the difficulties of Roman
politics as he tries to build a cabinet with some high profile
candidates ruling themselves out.
The economy ministry has attracted particular scrutiny and
it remains unclear whether Renzi will appoint a politician with
experience of running a large department or turn to another
technocrat to succeed the outgoing minister, former Bank of
Italy official Fabrizio Saccomanni.
Lucrezia Reichlin, a highly regarded professor at the London
Business School who is in the running to become deputy governor
of the Bank of England, has been widely tipped but has so far
given no clear signal of her intentions.
There was embarrassment on Monday when a radio station made
a prank call to Fabrizio Barca, a minister under former Prime
Minister Mario Monti who had been seen as a potential candidate
but who expressed frustration with the impulsive Renzi.
"There's no idea at all behind this, there's such a level of
recklessness. Since there are no ideas, we're just seeing
slogans," Barca told the caller, who was posing as Nichi
Vendola, the leader of the small Left Freedom Ecology party.
"I'm really worried, it's amazing how the whole thing is
completely crumbling apart," he said.
After dropping previous pledges that he would only seek
office through an election, Renzi's ruthless removal of his
predecessor Enrico Letta, the cautious moderate named after last
year's deadlocked election, has raised pressure from the start.
He has been deeply critical of Letta's slow progress with
reforms to the economy which is struggling to recover from its
worst economic slump since World War Two and must now show
After being asked to form a government on Monday, Renzi
pledged one major reform a month up to May but details remain
sketchy on key points including his willingness to adhere to the
strict budgetary discipline demanded by Italy's European Union
Filippo Taddei, one of his main economic advisers, said the
focus would be on cutting spending and reducing taxes on labour
costs which he said were too high with respect to taxes on
"We want to cut taxes overall, starting with taxes on
labour," he told Canale 5 television.
He said welfare protection for the unemployed would be
beefed up. But he would not scrap a much-disputed article of the
labour code which protects workers from unjustified dismissal, a
key stumbling block in past efforts to overhaul a system blamed
for overprotecting employees on full contracts at the expense of
part time and short contract workers.
Financial markets appear to have welcomed Renzi's arrival,
with borrowing costs dropping to levels not seen since before
the outbreak of the eurozone debt crisis. Yields on 10 year
government bonds were at around 3.6 percent in morning trade on
Tuesday, near their lowest level since 2006.