New Italian political drama is about to begin - BBH

FXStreet (Guatemala) - Italy's president has resigned as he indicated he would on New Year's Day.

Key Quotes:

"Napolitano was the longest serving Italian president. He served longer than he intended, but Italian politics are messy, and the continuity, he offered was important. He has been president through five different governments and two elections. The last three prime ministers, including Renzi were not elected".

"The Italian president is selected by an "electoral college" that is composed of both members of parliament and 58 regional delegates. A secret ballot is used, and this allows much intrigue".

"They will meet on January 29th to begin the process. It can last several days".

"Renzi needs a strong candidate, but not too strong that would overshadow him or resist his reform efforts. He needs a candidate that could bring together the disparate and fragmented political forces. This is a tall bill to fill".

"There is some risk that the trade-off will be to slow further Renzi's reform efforts. Unlike in Greece, the Italian presidential selection process is unlikely to result in a national election".

"That said, many observers fear the consequences of an Italian election for the stability of the eurozone more than the Greek election. The two main opposition parties in Italy favor withdrawing from EMU".