Italian government says andiamo, Europa!

It was the perfect scene to finish a tragicomedy: a desperate man, unemployed, firing six shots against two officers in front of the Chigi Palace, just a few hundred meters from where the new Italian has taken power.

Six shots against corruption, misrule, impoverishment and instability; this instability that has been gripping Italy for the last twenty years. But Calabrese Luigi Preiti wasn’t a redeemer, but an unstable man, insecure about his motivations and hooked on online poker. An anti-hero. Incompetent even to commit suicide.

A more significant test of Italy’s changing cycle was the oath of Enrico Letta as President of the Council. A Government formed with the support of a large majority. A government protected by the only living Italian you can call a statesman (President Giorgio Napolitano), which also has the support of one of the few Italians who still has a good reputation in Europe, former President of the Council Mario Monti.

To form the new government has been a huge personal sacrifice for Mr Napolitano. On the verge of completing its mandate, he had to renew it. His continuity caused an important impact on the markets.

Italy had only had two months of interim government, and Monti had presented his resignation only five months before. During that period, points out Il Sole-24 Ore daily, Italy has lost three thousand companies and the equivalent number of jobs.

Italy is living in a contradiction: on one hand the country has the problem of debt and the risk premium under control (it has covered 50% of its debt issuance for the rest of the year), and on the other hand is experiencing a deep economic crisis. Moody’s has corrected its 2013 GDP forecast set so far at -1%, and has placed it at -1.8%.

Of course, the new government has also a relative support of the two political forces that have dominated the last years of Italian politics: the Democratic Party (PD) from Luigi Bersani, and the People of freedom (PdL) of Silvio Berlusconi, one from center-left and the other from center right.

Letta is a young man for an Italian politician (46), he is a christian democrat, and so far the VP of the Democratic Party. His government is perceived by population as the first that can govern in peace after 20 years of political war, it represents a generational change. Letta’s government will also be able to implement new formulas to fight the crisis; it will defend pro growth policies and is deeply pro-European. Minister of economy, Fabrizio Saccomanni, former Director of the International Monetary Fund is one of “technicians” of the Maastricht Treaty and has been until now director general of the Bank of Italy. New Minister of Foreign Affairs Emma Bonino, is a former Commissioner of the European Commission, and Enzo Moavero keeps European Affairs portfolio, the same he had under Monti’s government. Saccomanni will bet on growth. He is in favor of fiscal restraint through spending cuts, and calls for joint efforts of banks, companies and society.

The government must still be approved by Parliament. Former Prime Minister Berlusconi has promised not to cause problems. His former allies, the Northern League, have not given their support to the new cabinet, yet the have not rejected it either. They are waiting to see Letta’s next moves. They ask for a macroregion of the North which keeps 75% of taxes.

It is likely that the government will not please the North League since Minister of Territorial Cohesion is the sociologist Carlo Trigiglia, who thinks that if Italy is to grow in the third millennium, it can only do so when the South develops.

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