Renzi’s Italian job

The new prime minister has his work cut out to fix the country’s economy.

Published: February 28, 2014 12:36 am

The new prime minister has his work cut out to fix the country’s economy.

When Matteo Renzi, the 39-year-old leader of Italy’s centre-left Democratic Party, took over as prime minister earlier this week by engineering an inner-party coup to depose Enrico Letta, he might have viewed himself as conforming to his nickname, rottamatore (the wrecker).

But the criticism his machinations engendered, despite his popularity, illustrates the nature of the challenge that awaits him. The public’s exhaustion with politics-as-usual and its frustration with a stagnant economy means his sense of urgency appeals, but there is also cynicism regarding Renzi’s methods in securing his rise to power, and what he might accomplish.

Renzi has excoriated the way politics is done, painting himself as an outsider determined to junk political habits that have led to Italy appointing three different prime ministers within a year. Yet Renzi himself lacks a mandate, and instead of leveraging his popularity to call for elections, he has spoken of seeing out this parliamentary term, though many Italians do not expect the government to last.

As a result, he will have to operate within the same weak coalition that hobbled Letta’s premiership. Given that he aims to radically reform everything from the constitution to the electoral system, words will not translate easily to action, and Renzi’s credibility will depend on whether he can deliver real change.

Despite his rhetoric, Renzi has displayed an encouraging willingness to compromise with the centre-right. He will need to build consensus if he is to embark on reforming Italy’s inflexible labour laws, which have left some 40 per cent of the young unemployed.

With the nation’s debt approaching 130 per cent of the GDP, Italy is perhaps the eurozone’s real Achilles’ heel. Even as German Chancellor Angela Merkel woos Britain, populist euroscepticism is gaining traction in the eurozone’s third-largest economy.

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