Italy: delicate negotiations by Giorgia Meloni to form his government

FdI, which triumphed in Sunday's legislative elections, has no experience in power but must assemble a cross-party team to deal with skyrocketing inflation and energy prices, as well as relations with a wary Europe.

Ms Meloni, 45, hopes to be the first woman to lead Italy but she needs her allies, Matteo Salvini's far-right League party and Silvio Berlusconi's Forza Italia, to secure a majority in parliament.

The distribution of key positions - in particular the Economy, Foreign Affairs, the Ministries of Defense and the Interior - will always be political but must more than ever "reflect competence and not membership", notes the daily Stampa.

In the past, it has taken between four and twelve weeks for a new administration to take office.

The first deadline is fast approaching, with debt-ridden Italy due to submit its draft 2023 budget to Brussels by October 15.

President Sergio Mattarella will begin consultations on the new government only after the elections of the presidents of the Senate and the Chamber of Deputies by the Parliament, which meets on October 13.

As families and businesses grapple with huge energy bills, preparing the 2023 budget will be "like climbing Everest without oxygen for the new cabinet", according to Corriere della Sera.

Ms Meloni sought to reassure investors during the election campaign by saying that, despite her radical past, she would play by the rules.

But on Tuesday morning, the yield on Italian ten-year bonds rose to its highest level since October 2013.

And the difference between German and Italian ten-year interest rates, the famous "spread", exceeded 250 points for the first time since the worst moments of the coronavirus pandemic, in the spring of 2020.

- Recovery plan -

The European Commission on Tuesday approved a new tranche of post-pandemic recovery funds for Italy, amounting to 21 billion euros.

The recovery plan is for Italy "a unique opportunity to build a more competitive and sustainable economy", assured the European Commissioner for the Economy Paolo Gentiloni.

"I urge the next Italian government to ensure that this opportunity is seized," he added.

But Ms Meloni intends to renegotiate the agreement with Brussels, which could jeopardize the rest of the funds, with a total value of nearly 200 billion euros.

Agnese Ortolani, an analyst at the Economist Intelligence Unit, expects Ms Meloni "to continue to reassure the markets by choosing an uncontroversial figure for the role of finance minister".

“She will also want to avoid damaging her reputation by appointing someone who is not perceived as credible by the markets,” she commented.

Ms. Meloni's allies are already in the race for important posts, Salvini wanting to recover his former title of interior minister and Berlusconi aiming for the presidency of the Senate.

Their disappointing performance in the polls -- none reached 9% while FdI got 26% -- means that Ms Meloni could lower their claims.

MM. Salvini and Berlusconi are at odds with Giorgia Meloni on several fronts, including sending arms to Ukraine.

With all the potential friction ahead, winning the election "was almost the easy part", commented Luciano Fontana, editor of the daily Corriere della Sera.

Mr Berlusconi played down fears he would blow up the alliance, saying his party was ready to compromise "in the interests of the country".

His right-hand man Antonio Tajani, former president of the European Parliament, is tipped as possible foreign minister, an appointment that could appease both Mr. Berlusconi and Brussels.

For Matteo Salvini, 49, the situation is more difficult. He is currently on trial, accused of abusing his powers as interior minister in 2019 to block migrants at sea, which could prevent him from returning to the post.

"Defusing Salvini" without triggering a backlash that could seriously weaken the nascent executive is "Meloni's first test", writes the daily Repubblica.