Italy’s President Leaves Renzi Down One Ally by Resigning

Giorgio Napolitano, Italy’s longest-serving president, resigned today, creating a challenge for Prime Minister Matteo Renzi’s plans to overhaul the nation’s economy and political system.

The dilemma for Renzi is to find a successor to Napolitano, 89, who is willing to support his reform agenda and help him broker political compromises in a deeply fragmented parliament, as the president did over the past few months.

“The president of the Republic, Giorgio Napolitano, signed this morning at 10:35 the resignation from his office,” according to an e-mailed statement from the presidential palace.

The 40-year-old prime minister also needs a candidate willing to dissolve parliament at his request. Calling snap elections could be a weapon of last resort for Renzi, who’s trying to push through changes to the country’s electoral system and adopt measures to spur growth amid opposition even from some members of his own party.

“I think Renzi wants the presidential college to choose a low-profile president, someone who is not too independent like Napolitano, and who is willing to agree on early elections if the premier needs them,” Giovanni Orsina, a history professor at Luiss Guido Carli University in Rome, said in a telephone interview. “It remains to be seen if Renzi will succeed.”

Leaders of Renzi’s Democratic Party will meet this week to start discussing possible names of a candidate to propose to their political allies, party member Valentina Paris told reporters in Rome today.

ECB’s Draghi

European Central Bank President Mario Draghi ruled himself out of the running for the president’s post. “It’s a great honor to be considered, but it’s not my job,” Draghi was cited as saying in an interview with Germany’s Die Zeit newspaper released today. “What’s important is the job I’m currently doing. I’m glad to be able to practice it and I will continue to practice it.”

Candidates mentioned in the Italian press so far range from former Prime Minister Romano Prodi to Bank of Italy Governor Ignazio Visco and Italian Defense Minister Roberta Pinotti.

Women Candidates

“I think Renzi is very superstitious” about mentioning any names of a possible successor, Federigo Argentieri, a political science professor at John Cabot University in Rome, told Bloomberg Television in an interview today. “For the first time in Italian history, there are serious rumors about a woman that could be elected as president, which of course would be absolutely welcome by the overwhelming majority of the population.”

Napolitano reluctantly agreed to serve an unprecedented second term in April 2013 after inconclusive elections led to a hung parliament, which then failed to agree on a new president. Dubbed “King George” by the national media for his influence on Italian politics, Napolitano has been regarded as a guarantor of stability amid unstable governments and Italy’s longest recession since World War II.

During his record nine-year tenure he steered the country through five governments and two general elections and fended off the risk of a bailout in 2011 by appointing former European commissioner Mario Monti to lead a “technocratic” government to reassure markets after then-Premier Silvio Berlusconi’s majority crumbled amid record-high bond yields.

Largely Ceremonial

While the Italian president’s role is largely ceremonial, he can declare legislation unconstitutional. He also has the power to dissolve parliament, nominate prime ministers and call early elections.

Italy’s president “is the guarantor of last resort of international treaties and capital markets have increasingly considered the Quirinale an indispensable stabilizing force amidst Italy’s dramatic political volatility,” Francesco Galietti, founder of research firm Policy Sonar in Rome, said, referring to the president’s official residence, which stands on the highest of Rome’s seven hills.

Now that Napolitano has made his resignation official, Senate Speaker Pietro Grasso will act as caretaker head of state until a new president is elected. Parliament and 58 regional delegates must meet within 15 days to choose Napolitano’s successor. The first vote may be held at 3 p.m. Jan. 29, Ansa reported today, without citing anyone. To win in first three rounds the candidate must secure two-thirds of as many as 1,009 potential votes; while from the fourth round an absolute majority of 505 electors is required.

Two Votes

The procedure can take several days because just two rounds of voting are permitted each day. While some presidents, such as Francesco Cossiga in 1985, were chosen in one day, the election of Giovanni Leone in 1971 took 23 rounds of voting.

Renzi, whose Democratic Party counts 415 electors excluding regional delegates who are yet to be named, might have to compromise with at least one of the main opposition parties, including Berlusconi’s Forza Italia and Beppe Grillo’s Five Star movement, to elect a new head of state.

While electing a new president won’t be a “smooth process,” Renzi should be able to reach an agreement on a candidate with broad support, said Loredana Federico, a Milan-based economist for UniCredit SpA. “Even if the need to find a compromise on the presidential vote leads to a slowdown of the reform process, in our view the delay will remain confined to a matter of weeks,” she wrote in a Dec. 19 note.

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