Italy’s Gentiloni unveils new cabinet

Italy’s new Prime Minister Paolo Gentiloni unveiled his cabinet team Monday ahead of an official swearing-in ceremony, keeping the line-up largely unchanged to ensure political stability in the eurozone’s third-largest economy.

Gentiloni, 62, was asked by President Sergio Mattarella on Sunday to form a new centre-left government that will guide Italy to elections due by February 2018, following the resignation of outgoing Prime Minister Matteo Renzi.

Gentiloni tapped Angelino Alfano — a former protege of ex-prime minister Silvio Berlusconi — to take over his role as foreign minister.

Pier Carlo Padoan stays on as finance minister in a move likely to reassure the markets that the eurozone’s third largest economy can deal with a budding crisis in the banking sector.

Alfano’s post as interior minister under Renzi went to Domenico Marco Minniti, who was the state secretary with responsibility for the security services in the outgoing administration.

The swearing-in ceremony was set to take place later Monday.

“Good luck to Paolo Gentiloni and the government with the job. Long live Italy,” Renzi said on Twitter.

Opposition parties have slammed the softly-spoken Gentiloni as little more than a Renzi puppet.

The founder of the anti-establishment Five Star movement, comic Beppe Grillo, said appointing a Renzi ally as premier ignored the wishes of those who voted against the outgoing PM’s referendum.

Grillo said the party would organise a mass protest for January. But Milan’s FTSE Mib saluted the new prime minister, remaining positive throughout the day.

– ‘Optimistic’ –
It was also buoyed by relief over the news the Italian government would intervene to recapitalise Italy’s Monte dei Paschi di Siena bank (BMPS), should it fail to raise the money from private investors needed to stay afloat.

Silver-haired Gentiloni, a one-time student radical from an aristocratic family, will seek parliamentary approval of his new government on Tuesday or Wednesday.

Among the most pressing issues facing the new government is the fate of the troubled BMPS.

The institution, the third largest in Italy, had requested extra time from Europe to plug a gaping hole in its finances, but reports on Friday that the European Central Bank had refused spooked the markets.

Just hours after Gentiloni was named as prime minister, the bank said it could avoid appealing for a government bailout, with BMPS shares up 6.46 percent in early afternoon trading on Monday.

Oanda analyst Craig Erlam said investors were “more optimistic” the bank could raise the 5 billion euros ($5.29 billion) needed to avoid a handout and were relieved political uncertainty had been removed in the short term at least.

Gentiloni has been rushing to resolve the political crisis sparked by Renzi’s crushing referendum defeat and downfall in time for Italy to attend the European Council meeting in Brussels on Thursday, where the pressing issue of migration is on the table.

Italy is on the frontlines of the migrant crisis, with a record 175,000 people landing on its shores this year alone.

Renzi may be down and out for now, but analysts said he had tapped Gentiloni to replace him because he trusts him to keep his seat warm for the next general elections, which could be brought forward to early next year.