• Sun
  • Apr 20, 2014
  • Updated: 7:02pm
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ITALY

Relief in Italy, but the challenges ahead are huge

A coalition government led by Enrico Letta could offer hope after weeks of political turmoil

PUBLISHED : Friday, 26 April, 2013, 12:00am
UPDATED : Friday, 26 April, 2013, 1:45am

Investors greeted the news from Rome's highest hill with relief. Italy's two-year borrowing costs fell to their lowest level since the country adopted the euro in 1999.

Like many ordinary Italians, they seemed cautiously buoyed by the fact that Europe's fourth-largest economy was inching towards a new government after two months of unprecedented gridlock.

On paper, there does not seem much to cheer about Tuesday's news. If Enrico Letta does, in coming days, manage to form a grand coalition government with the centre-right and centrists, it has hard to see how that government can be anything other than fragile, fractious and condemned to be relatively short-lived.

Moreover, Silvio Berlusconi, the billionaire former prime minister who has inched ahead in polls during the recent weeks of chaos, will regain his influence on Italian politics through his centre-right party's role in government.

Those are the negatives; they are certainly not negligible. But, after weeks of undignified political scrapping in which Italy's politicians failed to respond to the basic needs of their increasingly indignant citizens, many Italians are not in a fussy mood.

Unemployment is at 11.6 per cent, and among the young it is 37.8 per cent. More than 31,000 firms, mostly small and medium-sized, went bust in the first quarter of this year, the highest figure since 2004. In recent weeks a number of suicides apparently linked to financial despair have hit the headlines.

Against this dismal backdrop, a coalition government under Letta, however imperfect, could offer a glimmer of hope.

The deputy Democratic Party leader has a reassuringly low-key style. He arrived to meet Italy's president, Giorgio Napolitano, on Tuesday in his own Fiat complete with child seats fitted in the back. The chauffeured Auto Blu limousines that politicians tend to use have become hated symbols of the political elite.

The challenges ahead are indeed huge, but some believe Letta stands as good a chance as anyone of trying to tackle them. He is known as a capable mediator who, despite his relative youth, has been around the Italian political block and understands the machinations of his own, deeply divided party.

A committed European, he led a treasury committee to prepare Italy's entry into the euro and served in the European parliament from 2004 to 2006, where he sat on its committee for economic and monetary affairs.

Yesterday he was not shy about speaking of the pressure that was now upon him. "I feel a strong responsibility on my shoulders, stronger ... than my shoulders' ability to support it," he said.

Italians, certainly, will be hoping he was being falsely modest.

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