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Italy's Letta begins tricky coalition talks

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(Globalpost/GlobalPost)

Italian moderate leftist Enrico Letta begins complex talks on Thursday on forming a new coalition government aimed at tackling what the prime minister-designate called a social "emergency".

The 46-year-old Letta -- who would be one of Europe's youngest leaders if he succeeds -- has said he wants a government that is more in tune with the needs of ordinary Italians and that can steer away from harsh austerity measures.

Silvio Berlusconi's People of Freedom party and outgoing Prime Minister Mario Monti's centrist coalition have all said they will support his government. But the talks will be no easy ride between bickering political forces.

Letta's own Democratic Party is divided over the proposed alliance with Berlusconi, even though the 76-year-old scandal-tainted billionaire tycoon and former prime minister is not expected to be included in any new cabinet.

His bulwark of support will be President Giorgio Napolitano, who nominated Letta on Wednesday and has urged politicians to set their differences aside and form as wide a coalition as possible to deal with urgent economic issues.

Monti's government has limped on since the former European commissioner handed in his resignation in December and remains in place until a Letta cabinet is formed, which most political analysts say will happen this week.

Monti was widely praised for his budget discipline and bold reforms abroad. But he came a distant fourth in a February general election after official figures showed the economy shrank and unemployment had risen under his rule.

The elections were very narrowly won by a centre-left coalition led by the Democratic Party, with Berlusconi coming in a very close second after he promised to scrap an unpopular property tax implemented by Monti.

A protest party led by former comedian Beppe Grillo came in third place, winning a quarter of the vote on promises to revolutionise society and crack down on a pervasive culture of political perks that has inflamed many Italians.

Letta is relatively unknown internationally, although he has been a minister three times since the late 1990s. He is a former member of the European Parliament and worked at the Italian Treasury during its drive to adopt the euro.

A web-savvy politician with his own blog and Twitter account, Letta is also a fluent speaker of English and French and part of a generation of Italian political leaders who have often been held back because considered too young.

He started out in the centre-right Christian Democratic party and his uncle Gianni Letta is a top Berlusconi ally, making him one of the few figures in Italy who can bridge a very disparate coalition.

In a speech after receiving the nomination on Wednesday, Letta promised to boost employment, save businesses and act against rising poverty, as well as cutting the number of parliamentarians in order to reduce bureaucratic costs.

Financial markets have performed relatively well over the past few days -- with stocks rising and borrowing costs falling ahead of the government announcement -- although analysts warned the cabinet may be short-lived.

Some observers are predicting a Letta government may only last a few months to a year before differences between the parties and within the left become too much, although political leaders have insisted they want a lasting solution.

Recent polls suggest a return to the polls any time soon would see Berlusconi emerge victorious.

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http://www.globalpost.com/dispatch/news/afp/130424/italys-letta-begins-tricky-coalition-talks