ITALY: President Carlo Azeglio Ciampi was under pressure yesterday to quickly end Italy's post-election political stalemate by asking the narrow victor, Romano Prodi, to form a new government.
Once the May Day holiday is over, outgoing prime minister Silvio Berlusconi, who earlier contested the result of the April 9th to 10th poll, is due finally to resign, setting the clock running for a new administration to take office.
With credit rating agencies pushing for prompt action to tackle the country's struggling economy and wayward public finances, Italy could, under a best-case scenario, have a centre-left government led by Mr Prodi in place by the end of the week.
But that decision rests with 85-year-old Mr Ciampi, due to receive Mr Berlusconi's resignation this afternoon. Mr Ciampi, whose own term expires in mid-May, must decide whether he will give Mr Prodi the mandate or, as he has indicated, leave the task to the next president.
Mr Prodi has said his cabinet team would be ready by Friday, although he made it clear it was up to Mr Ciampi to decide. "If I get the mandate soon, I have to have my list of ministers ready. If I get it later, I will just have to hold on to the list for a while," he told reporters yesterday. He stressed, however, that he was "not dictating a date to Ciampi".
Mr Prodi's coalition, ranging from communists to centrist Christian Democrats, won the election by the smallest margin in modern Italian history. Mr Berlusconi announced he would quit only after centre-left speakers of both houses of parliament were elected at the weekend.
Mr Prodi, a former European Commission president, has stressed that Italy could give the world and markets a sign of stability if his government gets down to business quickly. If Mr Ciampi, a former central bank governor, agrees, he could begin consultations with political leaders tomorrow and give Mr Prodi the mandate by the end of the week.
Another option would be to move forward to next week the election of the new president, who is chosen by both houses of parliament and representatives of Italy's 20 regions.
Mr Prodi may decide to give the key post of economy minister to a respected non-politician to reassure markets worried by the state of Italy's finances. Former European Central Bank board member Tommaso Padoa Schioppa appears to be the most likely nominee.
Last year the economy failed to grow for the second time in three years. The public deficit reached 4.1 per cent of GDP, its highest level since 1996, and the massive public debt rose to 106.4 per cent of GDP, the first increase for more than a decade.
Mr Prodi must immediately draw up a strategy to avert the danger of Italy's public debt being downgraded.
Ratings agencies Standard & Poor's and Fitch have indicated they will lower Italy's credit ratings unless the new government quickly sets out reforms to cut the deficit and improve the country's competitiveness. - (Reuters)