Renzi’s mission: nurse Italy back to health

Italy has been the "sick man of Europe" for some time. Matteo Renzi might just be able to restore it to health - but the remedy will not be delivered easily.

There's a huge amount at stake for the 39-year-old leader of Italy's ruling centre-left Democratic Party, nominated this week to form a new government, which he aims to have in place by Monday.

Although popular, energetic and determined to overhaul Italy's sclerotic institutions and radically reform its uncompetitive economy, forming a stable and durable coalition government to push through the changes the country sorely needs is a massive challenge.

It is nevertheless vital to do so if Italy's US$2 trillion economy - one of the world's biggest, the euro zone's third-largest and among the top 10 exporters globally - is to make it off the European Commission's critical list.

Disease set in long before the euro-zone crisis erupted in 2009, as a cursory glance at Italy's economic, institutional and political problems shows, so it's not surprising that Renzi's ambitious agenda to turn things around is being greeted with a fair amount of scepticism.

The most crucial step for him is to secure agreement on a new electoral law designed to give Italy stable and effective governments - a precondition for any meaningful fiscal and structural reform. After that, the battle must be waged on the economic front.