Italy ‘strong, optimistic’ as new cabinet sworn in

Newly-appointed Italian Prime Minister Paolo Gentiloni (3rd L) greeted by Italian President Sergio Mattarella during a swearing-in ceremony at Quirinale Palace. Rome, December 2016. [Reuters]

Italian Prime Minister Paolo Gentiloni’s new cabinet was officially sworn in yesterday (12 December) as the eurozone’s third largest economy raced to reassure Europe its political crisis was over.

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.

Renzi ally Gentiloni named as Italy's new PM

With a brewing banking crisis as a backdrop, Paolo Gentiloni was named Italy’s new prime minister on Sunday (11 December), filling a void left by close ally Matteo Renzi, who quit after a crushing referendum defeat.

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 protégé of ex-prime minister Silvio Berlusconi — to take over his role as foreign minister.

Alfano: New Italian election likely in February

Italy could have an election as early as February, a minister in Prime Minister Matteo Renzi’s outgoing government said on Tuesday (6 December), speaking after talking to Renzi.

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.

Italy warns of disaster if Europe rejects its budget

Italy’s economy minister said yesterday (23 October) the European Union must choose between allowing Rome to raise its deficit to cope with a recent earthquake and the migrant crisis, or the “Hungarian way” of putting up barriers, which he said would spell doom for the bloc.

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.

Boschi: Italian constitutional reform and EU reform are equally needed

On a visit to Brussels, Italy’s Maria Elena Boschi received a show of support from the major political groups in the European Parliament and from the Commission, ahead of the do-or-die referendum in October on constitutional reform.

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 Five Star would organise 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 (13 December).

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 recapitalise Italy’s Monte dei Paschi di Siena bank (BMPS), should it fail to raise the money from private investors needed to stay afloat.

Bank of Italy head says wise to be ready for state aid for banks

Italy has asked for more time to sell four small savings banks it bailed out last year, the European Commission said on Friday (29 September), saying it was open to the request.

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 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 (15 December), where the pressing issue of migration is on the table.

Record number of boat migrants reach Italy in 2016

A record number of migrants have reached Italy by boat from North Africa in 2016, according to official data, as pressure on Italy’s shelter and asylum systems grows.

Italy is on the front line of the refugee 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.

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