Italian prime minister Matteo Renzi resigned as promised in the wake of an overwhelming defeat of a referendum he sponsored.

Today Sergio Mattarella, Italy’s president, appointed Paolo Gentiloni, the 4th Consecutive Technocrat as the new prime minister.


Paolo Gentiloni, Italy’s foreign minister, has been chosen to replace Matteo Renzi as prime minister amid signs of a quick solution to the political crisis that has convulsed the eurozone’s third-largest economy over the past week.

After three days of consultations with parliamentary leaders, Sergio Mattarella, Italy’s president, on Sunday summoned Mr Gentiloni to the presidential palace in central Rome and asked him to form a government. Mr Gentiloni accepted in a brief statement.

The urgency of installing a new government increased on Friday when the European Central Bank rejected a request from Monte dei Paschi di Siena, the country’s third-largest bank, for extra time to raise capital among private investors.

The ECB’s decision has increased the chances that the Italian government may have to use state funds to rescue one of its most prized financial institutions, which has been dogged by non-performing loans. The board of MPS was expected to meet on Sunday and make a statement.

Mr Renzi, whose government lasted nearly three years, wrote on his Facebook page on Sunday that he offered Mr Gentiloni “best wishes and all my support” in office. But he also made clear he would not give up on his own political ambitions.

“To the millions of Italians who want a future of ideas and hope for our country I can say that we will never tire of trying again and moving forward,” he said.

There have been widespread calls from all political parties to move to early elections, probably in the second quarter of 2017. Mr Mattarella made it clear that elections could be held only if the two separate electoral laws for the lower and upper houses of parliament were “harmonised”, calling it “indispensable” for a vote.

At the moment, lawmakers in the upper chamber are elected on a proportional basis, while in the lower chamber they would be elected in a system that gives bonus seats and a comfortable absolute majority to the winning party.

Renzi Not Vanquished Yet

Renzi’s ploy to resign wasn’t really an honest one. He wants his job back and will run again in the next election.

He had the gall in the wake of his much wider that expected 59-41% defeat to say 41% makes his Democratic Party the largest party in the country. Polls show otherwise.

The risk for the Democratic Party is the party splinters into pro-Renzi and anti-Renzi factions. Should that happen, it will be to the benefit of Beppe Grillo’s Five Star Movement (M5S).

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Mike “Mish” Shedlock