In Italy, Selecting a New President Brings New Challenges

On Jan. 14, Italian President Giorgio Napolitano issued his resignation. This announcement signaled the start of a period of political negotiations over his successor that will be particularly tense because the discussion between political parties will influence most of Italy's plans for economic and political reform. Rome, however, will go into this political turbulence bolstered by a significant degree of external help. On Jan. 13, the European Commission announced that it would be flexible with countries that miss their debt and deficit targets. The following day, the European Court of Justice issued a preliminary opinion that strengthened the European Central Bank's promise to intervene in financial markets to help eurozone countries in distress.

Italy's domestic negotiations on the selection of a new president will not have a major impact on the wider eurozone. However, the compromises Rome reaches during negotiations on issues including economic and electoral reforms will impact policy. As a result, Italy will remain at the center of the European crisis, bogged down by a stagnating economy, high unemployment and the constant danger accompanying its high levels of debt.