Italian Government In Crisis As Renzi Calls For Change

by
Reuters
Italian centre-left leader Matteo Renzi called on Prime Minister Enrico Letta to step down on Thursday and said their party, the biggest in the ruling coalition, should choose a new premier to lead the government.

* Renzi says time for a new phase has arrived

* Says politicians have a duty to take risks when needed

* Showdown follows tension over slow pace of reform

Italian centre-left leader Matteo Renzi called on Prime Minister Enrico Letta to step down on Thursday and said their party, the biggest in the ruling coalition, should choose a new premier to lead the government.

After weeks of tension between the two main figures in the centre-left Democratic Party (PD), the biggest in the ruling coalition, Renzi's call for change appeared to seal the fate of Letta, who did not attend the PD meeting called to discuss whether the party should continue to support Letta.

"Italy cannot live in a situation of uncertainty and instability. We are at a crossroads," Renzi, widely expected to take over if Letta stepped down, told the 140-strong leadership committee, calling for a radical new programme of reforms.

After growing criticism over the slow pace of economic reform, Letta, a low-key moderate appointed to lead the cross-party coalition patched together after last year's deadlocked elections, has been increasingly isolated.

Renzi acknowledged that forcing Letta to go and trying to form a new government with the centrist and centre-right parties that backed his coalition carried risks for both the government and himself personally, but said there was no alternative.

"Putting oneself on the line right now carries an element of risk, but a politician has the duty to take risks at certain moments," he said.

He said it would be impossible to hold new elections while the current voting law, blamed for the stalemate after last year's election, remained in place.

Renzi said he would seek the support of the current coalition partners and his proposal was for a government which would last a full parliamentary term until 2018.

The latest bout of turmoil in Italy, the euro zone's third-largest economy, has so far had little impact on financial markets, in contrast with the volatility seen during previous crises, such as the stalemate after last year's election.

Italian bonds and shares rose after Renzi's speech.

However, the continual uncertainty has held back any concerted effort to revive an economy struggling to emerge from its worst slump since World War Two or overhaul a political system blamed for hampering any deep reform programme.

If Renzi succeeds in ousting Letta, as most media and political commentators expect, he would be Italy's third unelected prime minister in succession after the technocrat Mario Monti and Letta, who was named as premier after weeks of fruitless wrangling between rival parties.