Napolitano Set to Decide on Mandate for Italian Premiership

Italian President Giorgio Napolitano is poised to announce his selection for prime minister after completing a round of talks with parliamentary leaders.

“We will adhere to the choices made by the president,” Enrico Letta, a representative of Italy’s Democratic Party, said late yesterday after meeting Napolitano at the presidential palace in Rome. An announcement is due as soon as today, the president’s office said.

Napolitano asked Letta, 46, for a meeting at the presidential palace in Rome today at 12:30 p.m., signaling he may have emerged as the top choice for prime minister. Former Prime Minister Giuliano Amato, 74, remained a candidate, la Repubblica reported today on its website and the possible candidacy of Florence Mayor Matteo Renzi, 38, was rejected by ex-Premier Silvio Berlusconi, leader of the second-biggest party in parliament, newspaper Corriere della Sera reported.

Napolitano’s pick will have to unite the disparate forces in Italy’s divided parliament to give the country a government after an eight-week deadlock. This will be Napolitano’s second attempt at resolving the impasse after his first choice, ex-Democratic Party head Pier Luigi Bersani, failed last month to win support from a majority of lawmakers.

Coalition Possible

Parliament needs a deal to replace caretaker Prime Minister Mario Monti and provide Italy with a government capable of passing economic stimulus and defending the country from bond-market speculation. A governing alliance may be easier to pull together since Bersani last week relinquished leadership of the Democratic Party, the biggest group in parliament.

The yield on Italian 10-year government bonds fell 2 basis points to 3.93 percent, the lowest in more than two years, while the two-year bond was at 1.17, hovering near a record low.

The Democratic Party, or PD, and Berlusconi’s People of Liberty demonstrated a willingness to work together after Bersani’s departure. The two parties united on April 20 in a parliamentary vote that gave Napolitano a second seven-year term as head of state. Beppe Grillo’s Five Star Movement, the third-biggest group in parliament, has reiterated its refusal to enter into an alliance.

Letta, a former industry and European affairs minister, worked under Bersani as the PD’s deputy secretary beginning in 2009. He is the nephew of Gianni Letta, an adviser to Berlusconi who served as deputy prime minister in the billionaire’s last government. Amato, a Deutsche Bank AG adviser, was premier in 1992-1993 and 2000-2001 and has had stints at the head of the Interior and Treasury Ministries.

‘Strong Government’

Berlusconi, 76, pushed for an alliance after his meeting with Napolitano yesterday, telling reporters at the presidential palace that his party wanted “a strong government that can take important decisions and that won’t be short-term.”

Napolitano, 87, needs an agreement or he may be forced to break the stalemate by dissolving parliament and calling snap elections. Even if Napolitano strikes a deal to create a government spanning the PD and PDL, the next prime minister may struggle to keep the coalition together over time.

“The president may hope for a government to last one to two years,” Peter Ceretti, an analyst with Eurasia Group in New York, said yesterday in a report. “A more realistic shelf-life for such an arrangement would more likely be five to 13 months.”

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