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Paolo Gentiloni picked to replace Renzi as Italian PM

Paolo Gentiloni, Italy’s foreign minister, has been chosen to replace Matteo Renzi as prime minister amid signs of a quick solution to the political crisis that has convulsed the eurozone’s third-largest economy during the past week. 

After three days of consultations with parliamentary leaders of all stripes, Sergio Mattarella, Italy’s president, on Sunday summoned Mr Gentiloni to the presidential palace in central Rome and asked him to form a government. 

“I consider this a high honour, which I will carry out with dignity and responsibility,” Mr Gentiloni said.

Late on Saturday, Mr Mattarella had emphasised his desire to pick a new prime minister quickly, saying in a statement that Italy needed a “fully functional government within a short timeframe” in order to meet its domestic, European and international commitments. 

Italy was plunged into political uncertainty six days ago after voters rejected a set of constitutional reforms championed by Mr Renzi by an overwhelming 20 percentage point margin in a referendum on which the 41-year old mayor of Florence had staked his tenure in office. Mr Renzi resigned on Wednesday, triggering the talks held by Mr Mattarella. 

Mr Gentiloni suggested that Mr Mattarella had asked Mr Renzi to remain for a second term in office, but was turned down by the 41-year old mayor of Florence. Mr Gentiloni said Mr Renzi’s decision deserved “respect from all”.

Early on Sunday, Mr Renzi — whose government lasted nearly three years — wrote on his Facebook page that he offered Mr Gentiloni “best wishes and all my support” in office.

The urgency of installing a new government increased on Friday after the European Central Bank rejected a bid by Monte dei Paschi di Siena, the country’s third-largest bank, for extra time to raise capital among private investors. 

The ECB’s decision has increased the chances that the Italian government may have to use state funds to rescue one of its most prized financial institutions, which has been dogged by non-performing loans. The board of MPS was expected to meet later on Sunday.

The choice of Mr Gentiloni, who played a key role in talks to establish a government of national unity in war-torn Libya, would be likely to allow Pier Carlo Padoan, the country’s finance minister and another contender for the top job, to stay in his current role in order to manage the banking troubles. 

Assuming Mr Gentiloni is able to form a government and obtain votes of confidence in the Italian parliament, he might even be able to represent Italy at next week’s European summit in Brussels. 

Although Mr Renzi resigned in the aftermath of the referendum, there have been no significant defections from the coalition that sustained his government since February 2014. This means that Mr Gentiloni, if he is chosen, should be able to count on a combination of the centre-left Democratic party (PD) and other centrists in order to stay in power. 

However, there have been widespread calls from all political parties to move to early elections, probably in the second quarter of 2017, in order to clarify the will of the Italian people. 

Mr Mattarella made it clear that elections could be held only if the two separate electoral laws for the lower and upper houses of parliament were “harmonised”, calling it “indispensable” for a vote. 

At the moment, lawmakers in the upper chamber are elected on a proportional basis, while in the lower chamber they would be elected in a system that gives bonus seats and a comfortable absolute majority to the winning party. 

Mr Gentiloni vowed to “accompany and facilitate” any efforts to forge a new electoral law. 

Mr Mattarella launched his consultations on Thursday by speaking to Giorgio Napolitano, his predecessor, along with Laura Boldrini, the president of the lower house, and Pietro Grasso, the president of the Senate. The talks continued on Friday with a string of meetings with small parties in parliament. 

On Saturday, however, parliamentary leaders of the top parties met with Mr Mattarella. Although Mr Renzi and Beppe Grillo, the leader of the Five Star Movement, the anti-establishment force running neck-and-neck with the PD, did not attend in person, Silvio Berlusconi, the media tycoon, former prime minister and leader of the centre-right Forza Italia party, did. 

Mr Renzi had demanded that Italy’s opposition parties support a government of “national responsibility”, but his call went unheeded, as all of his opponents would prefer to attack the incumbents ahead of the next election. 

Via FT