ROME: Italian far-right leader Giorgia Meloni and her allies began on Tuesday what is likely to be a weeks-long process of forming a new government, with crises looming on several fronts.

Meloni’s post-fascist Brothers of Italy party, which triumphed in Sunday’s elections, has no experience of power but must assemble a cross-party team to tackle sky-high inflation and energy prices, and relations with a wary Europe.

The 45-year-old is hoping to be the first woman to lead Italy as prime minister, but needs her allies, Matteo Salvini’s far-right League party and former Silvio Berlusconi’s Forza Italia, for a majority in parliament.

The division of the top jobs — notably economy, foreign affairs, the defence and interior ministries — will always be political but now, more than ever, “will have to reflect areas of expertise”, the Stampa daily noted. In the past, it has taken anything between four and 12 weeks for a new administration to take office.

But the first deadline for action is coming up fast, with debt-laden Italy due to submit its draft plan for next year’s budget to Brussels by October 15.

President Sergio Mattarella will begin consultations on who should lead the new government only once the Senate and Chamber presidents have been elected by parliament, which meets on October 13.

With families and businesses struggling with huge bills aggravated by the Ukraine war, sorting out the budget will be “like scaling Everest without oxygen tanks for the new cabinet”, the Corriere della Sera daily said.

Meloni sought to reassure investors during the election campaign that, despite her radical past, she will be a safe pair of hands.

But the Italian ten-year bond rate increased to its highest level since October 2013 on Tuesday morning.

And the gap between German and Italian interest rates, the closely watched spread, rose above 250 points for the first time since the depths of the coronavirus pandemic in spring 2020.

The European Commission approved Tuesday the second instalment of post-pandemic recovery funds to Italy, worth 21 billion euros. But Meloni has said she wants to renegotiate the deal with Brussels, potentially putting the rest of the fund — worth a total of almost 200 billion euros — at risk.

EU economy commissioner Paolo Gentiloni said he urged “the next Italian government to ensure that this opportunity is seized”, saying it was key to putting Italy on a path to “strong and durable growth”.

Agnese Ortolani, senior Europe analyst at the Economist Intelligence Unit, said she expected Meloni “to continue to reassure the markets by picking a non-controversial figure for the role of finance minister”.

“She will also want to avoid reputational damage by nominating someone who is not perceived as credible by the markets,” she said in a note.

Meloni’s allies have been pitching for heavy-weight positions, Salvini wanting his old job as interior minister back, and Berlusconi eyeing president of the Senate.

Their disappointing performance in the polls, however, with neither reaching 10 percent while Brothers of Italy’s secured 26 percent, means Meloni may already be planning to sideline them.

Published in Dawn, September 28th, 2022