Italy’s Renzi asked to form government

Italian President Giorgio Napolitano has asked center-left politician Matteo Renzi to form a new government, promising rapid tax, labor and institutional reforms to revive a deeply troubled economy, the administration announced Monday.

Renzi, 39, needs to seal a formal coalition deal with the small center-right NCD party to secure a majority and name his cabinet and will probably seek a vote of confidence in parliament later this week. If he succeeds in forming a government, as expected, he will be Italy’s youngest prime minister.

Renzi, who engineered the removal of his party rival Enrico Letta from the premiership last week, plans a radical program to lift Italy out of its most serious economic slump since World War II.

However, Renzi will have to deal with the same unwieldy coalition that his predecessor did, which he criticized for failing to pass major reforms.

"In this difficult situation, I will bring all the energy and commitment I am capable of," he told reporters after Napolitano gave him the mandate to form the next government.

"The sense of urgency is extraordinarily delicate and important, but it's also true that, given the time horizon we have set of a full parliamentary term, we'll need a few days before formally accepting the mandate," Renzi said.

He has been expected to take over since ousting Letta in a vote by their Democratic Party last week, after growing impatience with the slow pace of economic reforms.

Renzi received the endorsement of former British Prime Minister Tony Blair, the foreign politician to whom he is most often compared, who said Renzi had the "dynamism, creativity and toughness to succeed."

Credit rating agency Fitch, however, underlined the scale of the challenge, maintaining its negative outlook on Italy and highlighting the risk of more political instability.

The euro zone's third-largest economy is technically no longer in recession, since it scraped back into growth in the fourth quarter of 2013. However, it remains profoundly marked by the crisis, with a $2.7 trillion public debt, a crumbling industrial base and millions out of work.

Renzi has promised swift action to create jobs, reduce taxes and cut back the stifling bureaucracy weighing on employers and business but has offered few specific policy proposals, and a promised jobs act expected last month has been delayed.

He said he expected to lay out full reforms to Italy's electoral laws and political institutions by the end of February, to be followed by labor reforms in March, an overhaul of the public administration in April and tax reform in May.

Wire services