Italy's New Prime Minister Lays Out Priorities -- Update
December 13 2016 - 2:53PM
Dow Jones News
By Giada Zampano
ROME -- Italy's new prime minister, Paolo Gentiloni, highlighted
banking problems and a struggle to control migration as his
government's priorities in his first speech before parliament,
marking out a narrow platform that tacitly acknowledges the fragile
political support he enjoys.
The new prime minister, who took power a week after the
resignation of predecessor Matteo Renzi , on Tuesday won the first
of two confidence votes in Italy's lower house, with 368 votes in
favor and 105 against his government. Italy's Senate is due to hold
its confidence vote Wednesday.
In a speech laying out his governmental program before Italy's
lower house, Mr. Gentiloni said he stands ready to help support
Italy's banking system, which is saddled with about EUR200 billion
($212.4 billion) in bad loans. While he didn't cite Banca Monte dei
Paschi di Siena SpA in particular, he said state aid may be
required in "specific cases." Bankers expect the state may have to
step in and rescue Italy's No. 3 lender, possibly as soon as next
week.
Mr. Gentiloni also pledged Tuesday to take a strong stand in the
European debate over migration, as the European Union looks at
revising asylum rules. Mr. Gentiloni is scheduled to participate in
an EU summit Thursday, where leaders will discuss the issue.
Italy is at the front lines of Europe's migration problem. More
than 170,000 migrants have arrived by boat so far this year.
Tuesday, Mr. Gentiloni echoed the push by Mr. Renzi in calling for
other European countries to share the burden.
"It is unacceptable that Europe is so severe in its [economic]
austerity policies and so tolerant of those countries that don't
share the burden" of coping with the new arrivals, he told
parliamentarians.
Mr. Gentiloni confirmed that his government will, like his
predecessor's, push for pro-growth policies in Europe to support
Italy's feeble economic recovery. The country has been vociferous
in calling for a relaxation in the fiscal restraints imposed by the
EU. The economy is at a near standstill, expected to grow no more
than 1% next year and in 2018.
The timidity of Mr. Gentiloni's platform reflects how little
political capital the new premier enjoys. Critics, led by the
antiestablishment 5 Star Movement, have blasted the new government
as a "photocopy" of Mr. Renzi's, given that Mr. Gentiloni's cabinet
is little changed from that of his predecessor.
The premier addressed a half-empty lower house, with most of the
opposition parties, including the 5 Star Movement, deserting the
chamber.
Mr. Gentiloni, as expected, didn't encounter problems in
securing the vote in the lower house, where his party, the
center-left Democratic Party, enjoys a wide majority. He faces a
tougher task in the Senate, where his majority is much narrower. A
small center-right party that had supported Mr. Renzi said Monday
that it wouldn't vote for Mr. Gentiloni's government.
While most political experts expect Mr. Gentiloni to secure the
Senate vote, they say it will make it difficult for the government
to act boldly in addressing Italy's manifold problems. To survive
future confidence votes on important issues, the Gentiloni
government may have to secure the external support of other small
parliamentary groups, leaving him reliant on shaky majorities.
Write to Giada Zampano at giada.zampano@wsj.com
(END) Dow Jones Newswires
December 13, 2016 14:38 ET (19:38 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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