Italy's New Prime Minister Faces Familiar Problems

Italy's new prime minister, Matteo Renzi, presented his government agenda Feb. 24 and is expected to win a vote of confidence in the Senate later in the day and in the Chamber of Deputies on Feb. 25. In the past few days, Renzi promised to reduce state bureaucracy, cut payroll taxes, loosen employment rules, apply higher taxes on financial investments and approve public spending cuts.

But the new prime minister will be working under the same constraints as his predecessors; he will have to rely on a fractious Parliament and a fragile government coalition. This will undermine the new government's ambitious plans for reforms, since decision-making will remain difficult and slow. While political instability in Italy is unlikely to affect the rest of the eurozone in the short term, it will keep weakening the country's prospects for a substantial economic recovery and contribute to a rise in anti-establishment sentiment.