Italy’s Prime Minister Renzi To Resign Today

ROME, Dec 7 (Reuters) – Italian Prime Minister Matteo Renzi said he would tender his resignation at 7 p.m. (1800 GMT) on Wednesday after a bruising referendum loss at the weekend, with most parliamentary factions pushing for an early election in the spring.

Renzi first vowed to step down on Monday after the referendum humiliation but was persuaded by President Sergio Mattarella, whose powers include naming prime ministers and dissolving parliament, to stay on until parliament approved the 2017 budget, which it did on Wednesday afternoon.

“Budget approved. Formal resignation at 7 p.m. Thanks to everyone and long live Italy,” Renzi said on Twitter.

The 41-year-old’s decision to quit after less than three years in office dealt a new blow to Western governments still in shock from Britain’s vote to leave the European Union and the election of outsider Donald Trump as president of the United States.

The political crisis sparked by the referendum coincides with a crisis in Italy’s debt-laden banks, especially at its third-biggest lender Monte dei Paschi di Siena, which looks likely to require government intervention to survive.

Mattarella is likely to ask Renzi to remain in office in a caretaker capacity for an unspecified period, during which time he might end up having to resolve the situation at Monte dei Paschi.

Two sources told Reuters on Tuesday that Renzi’s administration was preparing to take a 2-billion-euro ($2.15-billion) controlling stake in the bank by purchasing junior bonds.

On Wednesday, a Treasury spokesman denied Italy was poised to ask for a loan from the European Stability Mechanism to support its banking sector.

Shares in Monte dei Paschi were up about 9 percent at 1540 GMT while Italy’s benchmark 10-year bond yield fell to near three-week lows.

ELECTION PUSH

Italy is not due to hold a parliamentary election before 2018. While there is a growing consensus that the schedule should be accelerated by a year, Mattarella wants parliament to draft a new electoral law beforehand.

Interior Minister Angelino Alfano, head of a small center-right group, said the vote should take place in February, and Infrastructure Minister Graziano Delrio, a close ally of Renzi, said an interim government should change the electoral law quickly so an election could be held “in the Spring.”

Both the anti-establishment 5-Star Movement and right-wing parties Northern League and Brothers of Italy are pushing hard for an early vote.

Silvio Berlusconi’s Forza Italia and a left-wing minority inside Renzi’s own Democratic Party (PD) want a new administration to be formed with the backing of the current parliament, perhaps until 2018.

The PD has the largest number of parliamentarians, so it is unlikely any new government could be formed without his backing.

Two PD sources said on Tuesday that the party plans to support a government of national unity, which would have to include parties currently in opposition. If such a government is not possible, then the PD wants an early election, they said.

Renzi, who is still the PD’s leader, is due to speak at a meeting of the party’s top brass later on Wednesday and then go to the president’s office to resign.

Afterward, Mattarella is likely fix a number of separate consultations over what the next steps should be with the different parliamentary factions.

Source:http://www.huffingtonpost.com/entry/italy-renzi-resign-friday_us_5848164de4b08c82e888ece6?section=us_world