Italy’s President Giorgio Napolitano sworn in for Second term

                                

Rome – Giorgio Napolitano on Monday became the first Italian president to serve a second mandate, amid expectations that the ageing statesman will push to solve eight weeks of political deadlock by appointing a grand coalition government.

The 87-year-old Napolitano – who was elected by lawmakers on the weekend despite his desire to retire because political parties could not agree on a successor – was greeted with a round of applause as he appeared in the Chamber of Deputies, the lower house of parliament.

“I swear to be faithful to the republic and to loyally observe its constitution,” Napolitano said, before a speech in which he was expected to outline his plans for the formation of a government.

Markets reacted positively to Napolitano’s confirmation.

Yields on two-year bonds fell to 1.267 per cent, a two-year low. The yield spread between Italian and German 10-year bonds, a key risk indicator in the eurozone, reached a daily low of 278, a three-month record.

Italian media reported that Napolitano was expected to nominate a moderate centre-left figure – such as former premier Giuliano Amato – to head a grand coalition government which would implement reforms suggested by a team of experts Napolitano appointed earlier this month.

“The responsible political forces in Italy and certainly the old and new President Napolitano know exactly how much is at stake now for Italy; how important is it that a viable government can take the helm in Italy,” German Chancellor Angela Merkel’s spokesman said in Berlin.

“It is (…) an unusual and difficult situation,” Steffen Seibert said.

The broad-based ruling alliance would likely include the centre-left Democratic Party (PD), Silvio Berlusconi’s conservatives and centrists headed by Mario Monti, the outgoing prime minister.

Elections in February delivered a hung parliament, split between three main groups: the PD-led centre-left, Berlusconi’s coalition and the anti-establishment Five Star Movement (M5S) of former comedian Beppe Grillo.

But, while it facilitated the creation of a grand coalition government, Napolitano’s re-election also sparked a major crisis in the centre-left coalition, which twice failed to get its candidate elected before settling on the outgoing president.

PD secretary Pier Luigi Bersani resigned, while the party’s leftist partner, Left Freedom and Ecology, indicated that it would break the alliance if the PD were to join forces with Berlusconi.

Matteo Renzi, the popular centrist mayor of Florence, said in an interview with the centre-left La Repubblica newspaper that he wanted to take over the leadership of the PD.

Renzi is expected to be challenged by Fabrizio Barca, a left-wing technocrat who served as a minister in the Monti government. – Sapa-dpa