A new hope

Italy's new head of government will be a man who by Italian standards is still a "ragazzo," a young boy. Enrico Letto hasn't cracked the 50 yet and has never been prime minister of Italy before.

"It's an almost radical decision," said Olivio Bertoli, a newspaper salesman from Monza. Bertoli leaves no doubt that he prefers the Letto, deputy head of the Democratic Party (PD) to the politically more experienced 74-year old Giuliano Amato.

"I'd have picked Matteo Renzi - that really would have been someone fresh and he would better represent me," said 32-year old Giovanna Flachi who works in Milano's fashion scene.

Renzi is PD politician and currently mayor of Florence. He wanted the job but in the end was rejected by Silvio Berlusconi. Some believe it's because Renzi once dismissed a Berlusconi offer to join his party.

Letta might not stand for the change that many PD voters had hoped for but after several politically strenuous weeks many are happy that the country's leaders will go about forming a new government. This would not have been possible with PD chief Pierluigi Bersani who had promised not to form a coalition with Berlusconi and had stuck to his pledge. But because there was no workable alternative, he stepped down.

Now it's up to Letta to find that alternative - and it won't be an easy task for him either.

Unpopular policies

Berlusconi is delighted over the fact that the left is struggling. His party spokesman Angelino Alfano already set conditions for a coalition, including a demand to abolish a tax on real estate - a move that was part of Berlusconi's election campaign.

The country's central bank, however, is up in arms about the proposal, saying if it becomes law the budget would need to be recalculated. Italy hopes to achieve a 2.9 percent deficit for 2013 and certainly wants to stick to the Maastricht rules and regulations, which call for a 3 percent limit to new debt.

That does not leave much room for Letta in terms of his financial policies and he has to find immediate measures to deal with the country's economic and social problems. Measures that need to have a short-term effect but must not cost too much. It is likely to be an unpopular policy that will hardly differ from the austerity program of interim technocrat Prime Minister Mario Monti.

In his first statement as designated head of government, Letta criticized the policies of Italy's European partners by talking of "too much of a focus on austerity," but it's unlikely that Letta will want to jeopardize the trust that Monti's policies have won with countries like Germany and France.

Negotiation and compromise

Letta, who was born in Pisa, earned a reputation of being diplomatic and ready for compromise. He began his political career directly after getting a degree in law and politics and in the past has often shown he is a good man when it comes to tricky negotiations.

In his early 30s he was minister for European affairs and then took charge of the Ministry of Industry for two years. He also served as former Prime Minister Romano Prodi's deputy. While hardly a newcomer to Italian politics, he represents a compromise between the desire for a fresh start and the calls for an experienced leader.

His appointment by President Napolitano was welcomed by almost all the parties of the political spectrum. Only Beppe Grillo, who had always warned of a grand coalition, was outspokenly against it. He said that the Lettas were a big family, alluding to the fact that Enrico's uncle Gianni as a close confidant and adviser to Berlusconi. Enrico claims to have next to no contact with his uncle.

Which form of government?

In the current political situation, all parties have a different agenda and different political interests. The PD discusses the question whether it's really acceptable to work with archenemy Berlusconi and especially the party's grassroots are upset.

"There's a lot of unhappiness. Party members are not happy with what's happening on the national level," said Tina Colomba of the local PD branch in Monza.

Across the country, there are PD events to appease grass roots members. That's why many are talking about a government with an "institutional" character. That means that instead of PD politicians there rather will be independent experts who will become ministers.

This though does not go down well with Berlusconi's PDL which seeks a proper political government in order to show their voters that they have the stomach to push through some of their election promises.

Monti's centrist Civic Choice party seeks the continuation the previous government's policies under Monti while the small leftist SEL party doesn't want to join any grand coalition at all.