Recently re-elected president Giorgio Napolitano has potentially ended the long running political stalemate in Italy by choosing Enrico Letta, the deputy secretary of Italy’s biggest political party to become Prime Minister.
The 46-year old Letta accepted the mandate from President Giorgio Napolitano, saying that he would begin consulting with the nation’s political parties tomorrow about forming a new coalition government.
“I am appealing to all political forces and their sense of responsibility,’ said Letta as he addressed reporters at the presidential palace. ‘All of these essential reforms must e done together with the largest participation.”
He added that European economic policies would have to change as they have been focused too much on austerity instead of growth. Italy faced a ‘difficult and fragile’ situation could not continue and the government must provide answers on jobs, poverty and the crisis facing small businesses in a deep recession, he said.
Letta will be the second youngest Prime Minster in Italian history, as a staunch pro-European is likely to be welcomed by foreign governments and the markets.
As a result of the news the Euro has strengthened against the US Dollar as Letta’s appointment raised investor hopes that the two-month long political impasse in the EU’s third largest economy is coming to an end.
Economists have praised the choice. “Finally we have a young person like in the rest of the EU,” said Mario Spreafico, who manages 1.5 billion euros as chief investment officer at Schroders Private Banking for Italy. “He is a professional, who is widely appreciated, and he has always been a moderate.”
Letta faces the daunting task of trying to form a government from the fiercely divided political parties. An alliance has to be formed if he hopes to create a strong coalition government which means that he would have to include Silvio Berlusconi’s right-wing group as well as sides from the Left. Such an awkward combination of bitter rivals could ensure that any government may not last for long.
As of 13:00 pm GMT
The Euro to Pound Sterling exchange rate is currently trading in the region of 0.8523
The Euro to US Dollar exchange rate is currently trading in the region of 1.3014
The Euro to Australian Dollar exchange rate is currently trading in the region of 1.2660
The Euro to New Zealand Dollar exchange rate is currently trading in the region of 1.5380