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Italy's New-Old Government

Chiara Oldani, University of Viterbo and G7 Research Group
December 21, 2016

Paolo Gentiloni is the new prime minister of a new-old Italian government. In fact, all but a very few ministers have been confirmed in their offices. Maria Elena Boschi, the former minister for constitutional reform is secretary of the government, while Angelino Alfano moves from internal to foreign affairs.

Other than Matteo Renzi, who left, only Stefania Giannini, formerly the minister of education, has been replaced, mostly because her party lost power in Parliament (Mario Monti's party Scelta civica). The appointment of Valeria Fedeli (Partito Democratico, and vice-president of the Senate) as the new minister of education has been heavily criticized since she does not hold even a high school degree.

Gentiloni joined the European prime ministers meeting on December 15 in Brussels, and declared that his new-old government would have the same priorities of the former: migration, social policies and growth.

The week before Christmas has brought an unpleasant gift to Gentiloni, since the oldest European bank, and the fourth largest Italian bank, Monte dei Paschi di Siena, was unable to raise the needed €5 billion. In the absence of adequate capitalization, the European Central Bank would not oppose to a public takeover of the bank, which would unfortunately negatively affect the results of the Italian budget law. On December 21, Parliament approved a €20 billion rescue fund to bail out the bank.

After Christmas, Gentiloni will manage changing the electoral law, as requested by the majority in Parliament and the Five Stars Movement, and the reconstruction of the area in central Italy hit by the recent earthquakes.

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Chiara OldaniChiara Oldani is professor of monetary economics at the University of Viterbo and director of the G7 Research Group's Rome office. She is a member of the scientific committee of the Fondazione Ugo La Malfa, a research associate at the Centre for Applied Macroeconomic Analysis at Australian National University and the director of research at the Rome-based Assonebb. She was a visiting scholar at CIGI in 2014, the Cambridge Endowment for Research in Finance at the University of Cambridge in 2007 and the Wharton School at the University of Pennsylvania in 2005. She has taught at Luiss Guido Carli University and the Italian Society for International Organization in Rome. Chiara's research currently focuses on over-the-counter financial derivatives and the complex web of counterparty risk, widely considered a major precipitating factor of the global financial crisis. She has published dozens of academic papers and book chapters, both in English and Italian, on topics including Greek sovereign risk, derivatives and fiscal policy, and the global financial crisis. She has a Ph.D. in monetary and financial economics from Tor Vergata University and an M.Sc. in economics from the University of Warwick

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