Italy – Renzi steps up

Matteo Renzi is to become Italy’s next Prime Minister. His success will hinge on his economic programme which should be announced ahead of coalition negotiations. Whether he can deliver the stability needed to implement such an agenda will determine market sentiment, not the demise of the Letta government itself. The prospect of a further shift towards the centre is pro-market, but electoral reform will remain a near-term restriction as coalition parties look for leverage in negotiations.

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