Italian President Giorgio Napolitano held talks with political parties yesterday before choosing a new prime minister, with the nomination seen as a cinch for leftist Democratic Party Secretary and Florence Mayor Matteo Renzi.
Former Italian prime minister Enrico Letta was forced to quit his post on Friday after his own Democratic Party backed 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 the week.
Financial markets cheered as Letta earlier on Friday 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 prime minister 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 the tweet.
US President Barack Obama called 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 Italian 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 led his Forza Italia (Go Italy) party’s delegation in negotiations with Napolitano yesterday, despite having been expelled from parliament last year over a tax fraud conviction.
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.
However, 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 that “the road ahead is not without bumps.”