Italy’s president Giorgio Napolitano is considering the creation of a second technocratic government to run the country, amid signs that the nation’s key parties would not be able to reach an accord over last week’s election results, The Telegraph reported on Sunday.
According to The Telegraph’s sources, Bank of Italy governor Ignazio Visco is now the front-runner to take over as Italy’s prime minister, despite having not run in the recent elections. The Financial Times also reported that two other names were under consideration – former centre-left prime minister Giuliano Amato and Matteo Renzi, reformist Democrat mayor of Florence – though any of the three would see Italy end up with a second consecutive unelected leader following Mario Monti’s current stint.
Over the weekend, Napolitano, the 87-year-old head of state, held informal talks with Pier Luigi Bersani, leader of the centre-left Democrats, and former centre-right prime minister Silvio Berlusconi, in order to explore the possibility of bringing together a coalition.
Though aides say that Berlusconi is open to this plan, on condition of his own political future, Bersani has rejected an alliance with his old enemy.
Stefano Fassina, Bersani’s centre-left economics spokesman, reiterated on Sunday that failing a centre-left government, Italy should hold new elections. However due to constitutional restraints, Italy cannot go back to the polls until the end of June at the earliest.
Meanwhile, anti-establishment leader Beppe Grillo, who won a quarter of the national vote, repeated his vow to “bring down the old system”, dismissing the possibility of a second technocratic government.
“I repeat for the umpteenth time, the Five Star Movement will not back any government. It will vote law by law in keeping with its platform,” he said.
“We’re not a political party, we’re a civic revolution. This country is in ruins with two trillion in debts and we have to rebuild it from scratch,” he added, describing current political negotiations to form a government as “horse-trading.”
The political uncertainty surrounding Italy has increased fears of a long-term recession in one of Europe’s largest economies. Youth unemployment is already at a staggering 37 per cent, while disposable income fell by 4 percent last year.
In a comment last week, credit ratings firm Moody’s added that the inconclusive outcome increased the risk that Italy’s structural reforms could stall or come to a complete standstill. Moody’s also said that the strong electoral showing of euro-sceptic parties reduced the likelihood that any new elections would resolve the situation.
However, Erik Nielsen, chief economist at UniCredit, believed that the nation would be stave off any economic crisis, in the short-term at least.
“Monti left Italy in pretty good shape to weather a period of political uncertainty,” Nielsen said to FT. “So long as Italy does not reverse gear, the economic and financial story is OK for quite some time.”