EZA 740 Briefing note:

15 May 2006

Italy – Politics

10 May the Italian electoral assembly named socialist Senator Giorgio Napolitano as next President of the republic. Although the President is mainly a representative figure, the vote can be seen as a victory for Prodi on his way to form a centre-left government coalition. Assignment to Prodi by Napolitano is scheduled 22/23 May followed by a parliamentary vote on the new government. Fiscal consolidation will be a top priority for the new government; keeping the communists on board the major political challenge.

Asset conclusions: neutral, improved chances for government stability offset by concessions to the left on economic reforms.

© Graham Bishop