Matteo Renzi. REUTERS/Tony Gentile/Files
Matteo Renzi is one step from becoming Italy's youngest
prime minister after swiftly dispatching Enrico Letta in a
party coup, but the manner of his political triumph could make
it harder to carry out the bold reforms needed to resurrect the
After Renzi and the rest of the centre-left Democratic Party
(PD) leadership forced Letta to quit by withdrawing their
support at a special meeting on Thursday, the prime minister
handed his resignation to President Giorgio Napolitano.
Napolitano will hold two days of consultations leading to the
appointment of a successor. The 39-year-old Renzi, whose PD
is the biggest party in parliament, could be named premier as
soon as this weekend.
Renzi, who would be the third Italian prime minister in a row
to be appointed without winning an election, faces intense
pressure to achieve the structural reforms that have eluded
Italy for years.
Though he has long been agitating for sweeping change in
Italian politics and won a landslide victory for his party's
leadership in December, few had expected him to snatch power
from Letta so soon.
Renzi's decision to bring down the prime minister matured
over the past fortnight, according to people close to him,
after mounting pressure from unions and Italy's business
lobby which have criticized the Letta government for not
doing enough to help the country's struggling corporate
"The change came after a rather abnormal piece of
pyrotechnics but I wouldn't waste too much time on the whys
and hows of it all. The problem is this: can he help get the
country moving again?" Carlo De Benedetti, one of Italy's
most prominent businessmen, said at an event in Turin.
"If he can, the way the change happened will be forgotten. If
he can't, that is all that will be remembered," he said.
Renzi has shown himself a decisive, even ruthless political
tactician but the structural problems that have made Italy
one of the world's slowest growing economies over the past
two decades will be a tougher challenge than sidelining
Data from statistics office ISTAT on Friday showed a 0.1
percent rise in economic output in the final quarter of last
year, the first increase since 2011.
The meagre scale of the growth underlines how slowly Italy is
emerging from its worst recession since World War Two and how
far it has fallen behind other European economies like France
or Spain, let alone continental champion Germany.
Over the whole of 2013 the economy, the third largest in the
18-member euro zone, contracted by 1.9 percent after a 2.6
percent drop the year before.
Gross domestic product has shrunk around 7 percent in the
last five years and industrial output has fallen by 25
percent. Hundreds of thousands of companies have gone out of
business and in the southern half of the country less than
half of the working age population has a job.
Italy's 2 trillion euros of public debt, are equivalent to
more than 130 percent of total economic output and its 12.7
percent unemployment rate is at a level unseen since the
"What Italy needs at this point is not a reformer, it's a
revolutionary," said one senior official from business lobby
Business leaders have called for quicker reforms, with an
attack on stifling bureaucracy and a reduction of the heavy
tax burden on employers. Boosted by his sweeping victory in
the PD leadership primary last year, Renzi has promised a
radical programme but acknowledged that he faces serious
The manner in which he wrested power is likely to weigh
heavily on his government, politicians and business people
say, and could hamper his ability to overcome the resistance
he will inevitably encounter from entrenched lobbies as well
as many sceptical members of his own party.
Opinion polls suggest most Italians disapproved of Renzi
taking over from Letta without an election, and voters will
have an early chance to show their dissent at a ballot to
elect the regional government of Sardinia on Sunday.
One party official close to Renzi said some PD members were
made uneasy by what they saw as a grab for power.
"The only way he can win them back is by acting, by doing
things that transform the country," he said.
It will not be easy. For example, scores of amendments in
parliament have already held up the electoral law reform
Renzi has proposed to ensure there is no repeat of the
unwieldy coalition Letta struggled to lead.
The PD leader will have to cut through the swathes of
political and societal resistance that have in the past
thwarted Italian reform efforts. And as an outsider with
little knowledge of the corridors of power, he might find it
even harder than his predecessors.
Already Renzi's forces are likely to have to engage in a
period of horse-trading with the small New Centre Right
party, whose support the PD needs for its majority in
parliament. The party, run by Angelino Alfano, has called for
a rightward turn and has ruled out liberal social policies
that Renzi has advocated, including gay civil unions.
Italy's soon-to-be prime minister may also find that European
Union partners who appreciated Letta's adherence to the
bloc's strict budget rules are less impressed by his
suggestion that a promise of structural reforms should get
Italy room to loosen borrowing limits.
"The structural reform agenda will not go away and the fiscal
challenges will not go away," one senior EU official said.
"The room for manoeuvre for Italy given its debt level is