Bloomberg News

Renzi Accepts Italian Premiership After Bringing Down Letta (1)

February 21, 2014

Matteo Renzi

Matteo Renzi, Italy's incoming prime minister, speaks during a news conference to announce the names of the cabinet ministers that will form Italy's new government at the Quirinale Palace in Rome on Feb. 21, 2014. Photographer: Alessia Pierdomenico/Bloomberg

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 Organization for Economic Cooperation and Development. Renzi, the premier-designate, spoke to reporters in Rome after officially accepting the job in a meeting with President Giorgio Napolitano.

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 be sworn in tomorrow and then faces confidence votes in both houses of parliament, 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.”

Bond Yields

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 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 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 “will help Renzi make up for his young age, lack of international experience and macroeconomic management,” said Federico Santi, an analyst with Eurasia Group in London.

Renzi, the mayor of Florence, is coming to power without holding a nationally elected office. Napolitano, 88, chose not to dissolve the 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 legislature through 2018, when its term ends.

Renzi toppled Letta by convincing the 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.

To contact the reporters on this story: Andrew Frye in Rome at afrye@bloomberg.net; Chiara Vasarri in Rome at cvasarri@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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