Italy unveils new government after two-month deadlock

April 28, 2013 | 08:50
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Italy's prime minister unveiled a new coalition government on Saturday, finally breaking a two-month stalemate in the recession-hit country which had tested the patience of European partners with a motley team including Silvio Berlusconi's protege.

Italian prime minister-designate leftist Enrico Letta (R) shakes hand with President Giorgio Napolitano.

ROME: Italy's new coalition government prepared to swear in Sunday, bringing fresh hope to a country mired in recession after months of a bitter post-election deadlock watched closely by European partners.

Prime Minister Enrico Letta is expected to be the first to take the oath of office in Rome, administered by President Giorgio Napolitano, who appointed him after the centre-left won February general elections but without the majority needed to govern.

The 46-year-old, one of the European Union's youngest prime ministers, is then expected to unveil his programme in a parliamentary session on Monday, before the government is put to a confidence vote in parliament on Tuesday.

The political deadlock had thwarted efforts to end the worst recession the country has seen in 20 years, and Letta has said he wants to move quickly to tackle unemployment -- which currently stands at 11.6 percent -- and boost growth.

The leftist also wants to move away from the austerity imposed by his predecessor Mario Monti to defend Italy from the eurozone debt crisis -- a promise which will be followed closely by investors concerned about the country's debt pile.

Italy's debt will rise to 130.4 percent of gross domestic product in 2013, according to an official forecast in April.

Unveiling his new cabinet on Saturday, Letta said he was proud to have included younger ministers and women to help renew the country's tired political scene and rebuild confidence in the discredited political class.

He named as his deputy Angelino Alfano, protege of former premier Silvio Berlusconi and secretary of the centre-right People of Freedom party (PDL).

While the move appeared to be aimed at appeasing the right, it angered critics of the billionaire tycoon, who they claim will have a grasp on the reins of power.

Berlusconi -- currently on trial for paying for sex with a 17-year-old prostitute -- has seen his popularity ratings rise and fought to have his right-hand man in pole position. Alfano will also become interior minister.

Fabrizio Saccomanni, a director at Italy's central bank, was handed the post of finance and economy minister, tasked with driving the eurozone's third-largest economy under the watchful gaze of international partners.

Emma Bonino, a former European commissioner and rights campaigner, will be the new foreign minister while Anna Maria Cancellieri, nicknamed the "Iron Lady" for her uncompromising stance on corruption, becomes justice minister.

Clinching cross-party unity had proved tricky, with Letta's Democratic Party (PD) loath to work with its hated rival Berlusconi.

For his part, the media magnate had been pushing hard for close political allies to be included in the government and had insisted on the abolition and repayment of a controversial housing tax introduced in 2012.

The only alternative to a deal would have been fresh elections, which neither side would necessarily have won with the majority needed to govern -- though recent polls show that Berlusconi might have emerged victorious.

The new government is bound to bring some relief to anxious international observers, after the warning from ratings agency Moody on Friday of an "elevated risk" that the political stalemate would harm investor confidence.

Letta has promised to act fast to carry out key reforms -- such as tackling the complicated electoral law which created the deadlock in the first place -- but the diverse make-up of the government may make his job more difficult.

Political analysts have warned that the coalition team may have a limited life of one-to-two years before bickering parties bring it down and fresh elections are held.


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