Who might lead Italian interim government after Prodi resignation?

With Italian Prime Minister Romano Prodi forced to resign after losing his parliamentary majority, President Giorgio Napolitano must decide whether to call a snap election or try to install an interim government, Reuters reported Friday.

Napolitano would prefer to have an interim administration to reform the electoral system before holding a vote, in order to give future governments more stability, but it remains to be seen if there is parliamentary support for such a solution.

He would have to find a prime minister acceptable to a broad majority in parliament, including centre-right opposition leader Silvio Berlusconi who favours a snap election which he is confident he would win.

Here are some people considered possible candidates to lead an interim Italian government:

FRANCO MARINI: As president of the Senate, the 74-year-old is already second only to Napolitano in the institutional hierarchy. With roots in both the trade union movement and the Christian Democrat party which dominated post-war Italy, the silver-haired Marini is a left-leaning Catholic centrist, a moderate who could gain broad consensus.

GIANNI LETTA: Cabinet undersecretary in the last Berlusconi government, Letta has been one of the centre-right leader’s closest aides and might be the only person he would consider backing. The 72-year-old lawyer is respected by the centre left and has often acted as a diplomatic go-between in back-room talks between Italy’s political grandees.

GIULIANO AMATO: Prodi’s Interior Minister has already served twice as prime minister — once in 1992 as the “Clean Hands” corruption probe destroyed several top politicians, and again in 2000-2001, taking over from Massimo D’Alema who resigned after a poor result at regional elections. The 69-year-old law professor would have the intellect to steer through election reform, but possibly not the necessary broad political support.

MARIO DRAGHI: It would not be the first time that a Bank of Italy governor is called on to take charge during a political crisis — Carlo Azeglio Ciampi headed a technical administration in 1993-94 and went on to be president. Draghi, 60, is a non-political technocrat but may prefer to stay in the relatively safe waters of central banking than venture into the political bear pit.

MARIO MONTI: Often touted in the press as a possible leader of Italy, the 64 year-old president of Milan‘s Bocconi University has managed to keep out of party politics. Governments of both right and left appointed him to the European Commission where he made his name internationally as head of EU competition enforcement, crossing swords with huge U.S. companies Microsoft and General Electric. Like Draghi, he may prefer to stick where he is.

 

— Italy seeks way out of crisis

 

Italy‘s 61st government since World War Two collapsed late on Thursday after Prime Minister Romano Prodi lost, as expected, a confidence vote in the Senate after just 20 months in office.

Napolitano will hold meetings until next Tuesday aimed at trying to avoid calling Italians back to the polls so quickly, possibly by forging consensus for an interim government.

But the opposition led by Italy’s richest man — former Prime Minister Silvio Berlusconi — is pressing for elections that opinion polls suggest will return him to power.

“We must vote as quickly as possible to lift the country out of this quagmire,” said Berlusconi’s spokesman, Paolo Bonaiuti.

The prospect of prolonged political upheaval is likely to delay sorely needed economic reforms, just when a global slowdown looms. In worried markets, the spread between Italian government bonds and German bunds widened on Friday to levels unseen in more than six years as investors sought safe havens.

Analysts said the demise of Prodi’s government should not hurt growth prospects, as he had been too busy surviving politically to carry out deep reforms, but it could threaten a recent improvement in public finances.

“Italy (is expected) to underperform significantly the euro area regardless of the developments of the political crisis,” economist Marco Valli of Unicredit MIB wrote in a research note.

 

ELECTORAL REFORM?

 

Napolitano, an 82-year-old former communist, is known to oppose holding snap polls under the messy current electoral system which saddled Prodi with a razor-thin Senate majority.

The president will attempt to see whether there is support for an interim government, whose main task would be to change the voting rules before sending Italians back to the polls.

Any interim government would be led by a prominent political figure or a technocrat and would need cross-party backing.

While that prospect is favoured by Prodi’s Democratic Party, small parties on both sides of the divide fear reforming the electoral law would reduce their weight in future coalitions.

“Everyone must decide if they want to give the Italian people more instability or contribute to a new electoral law which will help governability,” said Walter Veltroni, the Rome mayor anointed as Prodi’s successor to lead the centre left.

Berlusconi says he likes the electoral law as it is.

The unrest did not seem to hurt shares. The Milan bourse rallied in line with Asian markets though shares in Alitalia airline fell more than 2% on worries for the future of sale talks with Air France-KLM, backed by Prodi.