Italian PM Letta out after Renzi plunges knife
ITALIAN Prime Minister Enrico Letta will tender his resignation to President Giorgio Napolitano today, after losing his party’s confidence in favour of upstart rival Matteo Renzi.
Renzi, the current Mayor of Florence, gained the overwhelming approval of the Democratic party that he and Letta share in a vote yesterday, calling for a new government but with the same coalition backing.
Though Letta’s office have said that he will resign today, it remains to be seen whether Napolitano will ask Renzi to form a government, or whether he will manage to gain enough support.
Letta was made Prime Minister after the resignation of Pier Luigi Bersani, who failed to form a government following the country’s last election. He took over from Mario Monti, another Italian leader who did not win an election.
“The situation in Rome is volatile. We do not yet know whether Renzi will indeed manage to get the top job,” said Berenberg bank’s Holger Schmieding. He added: “For once, we are inclined to see Italian politics as much as a chance for progress towards more reforms rather than just as a potential risk. But this being Italy, it could be a bit noisy either way.”
The political fluctuations have had little impact on confidence in Italy’s debt. The government’s 10-year bond yields dipped below 3.7 per cent this week, hovering at the lowest level since well before the euro crisis sent debt servicing costs rocketing up.