Italy’s President held urgent talks yesterday aimed at naming a prime minister to head a coalition government backed by the rival parties on the centre-left and centre-right and end two months of post-election stalemate.
Matteo Renzi is a possible candidate
Hopes that a government can be formed quickly gave a further boost to financial markets yesterday, with the yield on 10-year Italian government bonds dropping below four per cent and the spread, or risk premium over German bonds, narrowing further.
Former Prime Minister Giuliano Amato is widely considered to be the favoured choice of President Giorgio Napolitano, who has the final say and was expected to make the appointment late last night or today.
The young centre-left mayor of Florence, Matteo Renzi, also emerged as a possible candidate.
Silvio Berlusconi’s centre-right People of Freedom (PDL) party said it had no objections to Renzi after his name was suggested by the centre-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 had to meet separately with Napolitano yesterday 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.
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 eurozone’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.