Italy’s Prime Minister Letta to resign

(Vatican Radio) Another big political shake up in Italy where the country’s Prime Minister is expected to tender his resignation today.
Listen to Tracey McClure's report:

Prime Minister Enrico Letta is due to hand in his resignation to President Giorgio Napolitano later today – that following a show down Thursday with center left leader Matteo Renzi. Renzi’s Democratic Party – the largest in Letta’s ruling coalition – voted to support their 39 year old leader. Ever since he took over as head of the party in December, Renzi, the mayor of Florence, has loudly criticized the government’s failure to push through major reforms to right Italy’s ailing economy.

The shake-up marks Italy’s third change of administrations in just one year and comes amid growing frustration over the slow pace of economic reforms. Letta has only been in power since his appointment last April to lead a cross party coalition stitched together after last year’s deadlocked elections.

Financial markets have so far failed to react to the turmoil in Italy – a stark contrast to the market volatility we saw after last year’s political stalemate.

President Napolitano is expected to ask Renzi to form a new government. The young Democrat leader has promised to loosen strict hiring and firing rules to make businesses more competitive. Observers say he is less concerned than Letta too about European budget rules, saying structural reforms should carry more weight than rigid deficit limits.

If Renzi is named prime minister, he will be Italy’s third unelected leader following Mario Monti and Letta.