The 87-year old had hoped to retire but was persuaded to take the top job for another seven years after other candidates failed to gain enough support from parliamentarians to win the role.
He is holding meetings with the parties today in an effort to form a government after February’s election left the country with no clear leading party groups.
Markets jumped on his reappointment, with Italy’s 10-year borrowing costs falling 0.17 percentage points to 4.06 per cent yesterday – their lowest level since the election. Stock index the FTSE MIB rose 1.66 per cent on the news.
But Napolitano warned the joy may be short lived, saying he will resign if a government is not formed soon.
And he berated politicians for failing to come to any agreement.
“You cannot avoid facing up to the electoral results, like them or not,” he told MPs.
“Every party, without exception, must from now on support the decisions that must be taken for national renewal.”
His attempt to bring the parties together came after angry responses to his re-election from politicians who had not backed him.
Anti-establishment leader Beppe Grillo, a comedian, had called Napolitano’s re-appointment a “coup d’etat” and urged his backers to march on the parliament.
And the centre-left leader Pier Luigi Bersani quit over the weekend over the chaotic Presidential election, after he failed to persuade members of his own party to back his favoured candidate, former Prime Minister and ex-President of the European Commission Romano Prodi.
Bersani’s departure increased uncertainty again as his party holds the largest number of seats and so could be expected to play a leading role in any eventual coalition.