Renzi has promised a rapid program of reforms, pledging to tackle
the electoral and constitutional system, overhaul the public
administration, and reform labor market and tax rules all within
four months of taking office.
"The work's going well, we're relaxed," Graziano Delrio, Renzi's
right-hand man in the coalition talks, told reporters as meetings
began to form Italy's 65th government since World war Two. "We'll be
ready by the weekend."
Talks began with the smaller parties in the current ruling
coalition, with the main meeting expected later in the evening
between Renzi, who leads the Democratic Party, and Angelino Alfano,
leader of the center-right NCD party, whose support will be vital to
forming majority in parliament.
But a day after he was given a mandate to form a new government,
Renzi, the 39-year-old mayor of Florence, has already begun to
experience some of the difficulties of Roman politics as he tries to
build a cabinet with some high profile candidates ruling themselves
The economy ministry has attracted particular scrutiny and it
remains unclear whether Renzi will appoint a politician with
experience of running a large department or turn to another
technocrat to succeed the outgoing minister, former Bank of Italy
official Fabrizio Saccomanni.
Lucrezia Reichlin, a highly regarded professor at the London
Business School who is in the running to become deputy governor of
the Bank of England, has been widely tipped but has so far given no
clear signal of her intentions.
There was embarrassment on Monday when a radio station made a prank
call to Fabrizio Barca, a minister under former Prime Minister Mario
Monti who had been seen as a potential candidate but who expressed
frustration with the impulsive Renzi.
"There's no idea at all behind this, there's such a level of
recklessness. Since there are no ideas, we're just seeing slogans,"
Barca told the caller, who was posing as Nichi Vendola, the leader
of the small Left Freedom Ecology party.
"I'm really worried, it's amazing how the whole thing is completely
crumbling apart," he said.
After dropping previous pledges that he would only seek office
through an election, Renzi's ruthless removal of his predecessor
Enrico Letta, the cautious moderate named after last year's
deadlocked election, has raised pressure from the start.
[to top of second column]
He has been deeply critical of Letta's slow progress with reforms to
the economy which is struggling to recover from its worst economic
slump since World War Two and must now show results quickly.
After being asked to form a government on Monday, Renzi pledged one
major reform a month up to May but details remain sketchy on key
points including his willingness to adhere to the strict budgetary
discipline demanded by Italy's European Union partners.
Filippo Taddei, one of his main economic advisers, said the focus
would be on cutting spending and reducing taxes on labor costs which
he said were too high with respect to taxes on financial income.
"We want to cut taxes overall, starting with taxes on labor," he
told Canale 5 television.
He said welfare protection for the unemployed would be beefed up.
But he would not scrap a much-disputed article of the labor code
which protects workers from unjustified dismissal, a key stumbling
block in past efforts to overhaul a system blamed for overprotecting
employees on full contracts at the expense of part time and short
Financial markets appear to have welcomed Renzi's arrival, with
borrowing costs dropping to levels not seen since before the
outbreak of the eurozone debt crisis. Yields on 10 year government
bonds were at around 3.6 percent in morning trade on Tuesday, near
their lowest level since 2006.
(Writing by James Mackenzie; editing by Giles Elgood)
[© 2014 Thomson Reuters. All rights
Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.