Italy ‘optimistic’ as new cabinet sworn in

Italian Prime Minister Paolo Gentiloni's new cabinet was officially sworn in on Monday evening as the eurozone's third largest economy raced to reassure Europe its political crisis was over.

Italy 'optimistic' as new cabinet sworn in
Italy's President Sergio Mattarella (L) shakes hands with newly appointed Prime Minister Paolo Gentiloni. Photo: Tiziana Fabi/AFP

Gentiloni, 62, called to head up a new centre-left government after prime minister Matteo Renzi's resignation following a crushing referendum defeat, kept the line-up largely unchanged from the outgoing administration to ensure political stability.

The new government will guide Italy to elections due by February 2018, but which could come up to a year early.

“I put my everything into finding the fastest solution possible” to the crisis, Gentiloni said.

“As you can see from its make-up, the government will continue the innovative path of the Renzi government,” he added.

In a time-honoured tradition, Renzi symbolically handed over power to Gentiloni by passing him a little silver ceremonial bell.

Gentiloni named Angelino Alfano – a former protege of ex-prime minister Silvio Berlusconi – to take over his role as foreign minister.

Pier Carlo Padoan stays on as finance minister in a move likely to reassure the markets Italy can deal with a brewing crisis in the banking sector.

Alfano's post as interior minister under Renzi goes to Marco Minniti, who was the state secretary with responsibility for the security services in the outgoing administration.

'Strength and optimism'

Maria Elena Boschi, who was the minister in charge of constitutional reforms under Renzi – and therefore responsible for the very reform that lead to his downfall – becomes undersecretary to the prime minister.

The 35-year old is a die-hard Renzi ally and is expected to ensure the former PM's voice is still heard in the new administration.

“Good luck to Paolo Gentiloni and the government with the job. Long live Italy,” Renzi said on Twitter.

Opposition parties have slammed the softly-spoken Gentiloni as little more than a Renzi puppet.

The anti-establishment Five Star movement said keeping the old crew at the helm ignored the wishes of those who voted against Renzi at the referendum. Its founder, comic Beppe Grillo, said the Stars would organize a mass protest for January.

Giorgia Meloni from the right-wing Brothers of Italy also slammed it as “a spit in the face for the Italians” and promised a large rally.

Gentiloni admitted the referendum defeat had revealed mass discontent among the middle classes and young over the sluggish economy and unemployment, and said the job market would be “a priority for this government”.

“I won't deny there are difficulties” in the wake of Renzi's fall, but “the government will get to work immediately… with strength and optimism” he said.

Markets buoyed

Silver-haired Gentiloni, a one-time student radical from an aristocratic family, will seek parliamentary approval of his new government on Tuesday.

Milan's FTSE Mib saluted the new prime minister, remaining positive throughout the day.

The market had also been buoyed by relief over the news the Italian government would intervene to recapitalize Italy's Monte dei Paschi di Siena bank (BMPS), should it fail to raise the money from private investors needed to stay afloat.

And just hours after Gentiloni was named as prime minister, the ailing bank said it was hopeful a bailout could be avoided.

Oanda analyst Craig Erlam said investors were “more optimistic” the bank could raise the 5 billion euros ($5.29 billion) needed to avoid a handout and were relieved political uncertainty had been removed in the short term at least.

Gentiloni has been rushing to resolve the political crisis in time for Italy to attend the European Council meeting in Brussels on Thursday, where the pressing issue of migration is on the table.

Italy is on the frontlines of the migrant crisis, with a record 175,000 people landing on its shores this year alone.

Renzi may be down and out for now, but analysts said he had tapped Gentiloni to replace him because he trusts him to keep his seat warm for the next general elections, which could be brought forward to early next year.

By Ella Ide

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Italy’s hard right set for election victory after left-wing alliance collapses

An Italian centre-left election pact broke down on Sunday just days after it was formed, leaving the path to power clear for the hard-right coalition.

Italy’s hard right set for election victory after left-wing alliance collapses

The alliance between Italian centre-left parties was left in disarray on Sunday night, potentially meaning a landslide victory for the hard-right coalition at early general elections in September.

The leader of the centrist Azione party withdrew support for the left-wing coalition led by the Democratic Party (PD) just five days after the two joined forces, saying it could not work with left-wingers brought in to boost the alliance.

Carlo Calenda, leader of Azione, withdrew his support on Sunday after PD made another pact with smaller left-wing parties including the radical Sinistra Italiana, and new green party Europa Verde.

“You cannot explain (to voters) that to defend the constitution you make a pact with people you know you will never govern with,” Calenda told newspaper Corriere della Sera.

The news was greeted with jubilation by hard-right League leader Matteo Salvini, who tweeted: “On the left chaos and everyone against everyone!”

Giorgia Meloni, leader of the neofascist Brothers of Italy party (FdI) mocked a “new twist in the soap opera of the centre-left.”

READ ALSO: Italy to choose ‘Europe or nationalism’ at election, says PD leader

Analyists predict the centre-left split could hand the right-wing bloc a landslide victory at the election on September 25th, with Meloni tipped to become Italy’s first female prime minister.

Italy’s political system favours coalitions, and while Meloni has a strong alliance with Salvini’s League and Silvio Berlusconi’s Forza Italia, Letta is struggling to bring together the disparate  progressive parties.

The PD is neck and neck with Brothers of Italy in the latest opinion polls, but even in partnership with Azione, the group most recently polled at 33.6 percent, compared with 46.4 percent for the right.

Political commentators said the only hope PD has now of posing a credible threat to the right-wing alliance would be by partnering with the Five Star Movement.

READ ALSO: Why has Italy’s government collapsed in the middle of summer?

However, Letta has repeatedly said this is out of the question, as he blames M5S for triggering the political crisis that brought down Mario Draghi’s broad coalition government.

“Either PD eats its hat and seeks alliance with M5S to defeat the right-wing coalition, or it’s hard to see how the right can possibly lose the forthcoming election,” Dr Daniele Albertazzi, a politics professor at the University of Surrey in England, tweeted on Sunday.

Early elections were called after Draghi resigned in late July. His government currently remains in place in a caretaker role.