Renzi accepts the Italian premiership

INSIDE JOB::Instead of dissolving the legislature and calling snap elections when the previous government fell, Renzi was given a mandate to take charge till 2018

Bloomberg, ROME

Sun, Feb 23, 2014 - Page 7

Matteo Renzi accepted the mandate to become Italian prime minister a week after toppling Enrico Letta’s government in an intra-party dispute.

Renzi named a 16-member Cabinet, with the finance ministry going to Pier Carlo Padoan, chief economist of the Organisation for Economic Cooperation and Development.

The Cabinet is to be sworn in today at 11:30am in Rome.

Renzi, 39, is a step away from becoming the youngest head of government in post-World War II Italy.

His acceptance comes after four days of talks with lawmakers aimed at reconstructing Letta’s ruling coalition and agreeing on a Cabinet.

Renzi will face confidence votes in both houses of parliament next week, with attention focused on how many votes he gets in the fragmented Senate.

“Despite uncertainties, we expect Renzi’s newly formed government to survive the confidence vote at the Senate,” Alessandro Tentori, an analyst with Citigroup Inc, said in a research report. “We see this as a positive market development for Italy.”

Italian 10-year bond yields declined 5 basis points to 3.60 percent in Rome after falling to an eight-year low of 3.53 percent earlier in the week.

Renzi reconfirmed Italian Interior Minister Angelino Alfano, Infrastructure Minister Maurizio Lupi and Health Minister Beatrice Lorenzin in the roles they held under Letta.

The justice ministry goes to Andrea Orlando, who served as environment minister under Letta. Federica Mogherini was named foreign minister, while Federica Guidi becomes economic development minister.

The cabinet is composed of eight women and eight men.

Padoan, 64, replaces outgoing Italian Finance Minister Fabrizio Saccomanni and becomes the fourth straight non-politician to occupy the position.

With the intensification of the euro-area crisis in 2011, politicians began looking for outsiders to help reassure markets and share the criticism for unpopular decisions.

Padoan is to “help Renzi make up for his young age, lack of international experience and macro-economic management,” said Federico Santi, an analyst with Eurasia Group in London.

Renzi, the mayor of Florence, is assuming the country’s highest office without holding a nationally elected position.

Italian President Giorgio Napolitano, 88, chose not to dissolve the Italian legislature and call snap elections when Letta’s government fell.

Instead, he gave Renzi the task of assembling a majority and seeking to preserve the Italian legislature to 2018, when its term ends.

Renzi toppled Letta by convincing Italy’s Democratic Party on Feb. 13 to withdraw its support from the 10-month-old government.

The Democratic Party, which counts Letta as a member, elected Renzi as general secretary in December last year.