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Doubts over Renzi's 'ambitious' reforms for Italy

Italy's latest — unelected — prime minister has already attracted international praise with former U.K. premier Tony Blair describing Matteo Renzi as "dynamic, creative and strong." But with no experience in the Italian parliament, or national politics, analysts are concerned that Matteo Renzi may need superhuman strength to maintain his bold reform plans.

Tuesday sees Premier-designate Renzi start trying to form a grand coalition before a formal vote of confidence in parliament later this week. This comes after President Giorgio Napolitano met with Renzi on Monday and gave him a mandate to form a government, after Enrico Letta tendered his resignation last week.

(Read More: Italy's Matteo Renzi to begin coalition talks)

Speaking on Monday, 39-year old Renzi said that he aims to overhaul the country's electoral system and constitution before the end of February. In March, the focus of the new government would shift to labor reforms, he added, followed by the reform of the public administration in April and the fiscal system in May.

Renzi took to social media site Twitter on Monday to state his intentions saying: "With all the energy and the courage that we have," adding a hashtag of "la volta buona", which translates as "the right time."

Meanwhile, Blair – with whom the charismatic young Renzi has been compared - told Italy's ANSA news agency that he had his full backing.

"The challenges are absolutely formidable," he said. "He has the right combination of realism and idealism for the times we are living in."

(Read More: Renzi set to become Italy's youngest prime minister)

Described as "ambitious" by the Italian press on Tuesday, the reform package will give Renzi a new task every month until May. Ratings agency Fitch cast doubt on the pace of the economic changes on Monday afternoon, which it believes would boost Italian competitiveness and growth, and comply with EU and Italian fiscal rules.

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"Even if there is a quicker political reconfiguration than last spring, the new prime minister will probably face similar challenges to his predecessor in building and holding together a government that can agree and enact reforms," Gergely Kiss, a director at Fitch said in a research note.

Erik Nielsen, global chief economist at UniCredit, told CNBC Tuesday that Renzi had a "massive" problem ahead of him but expected his charisma would carry him through, with snap elections called if the political wrangling proved to be too much of a hurdle.

But for all the doubters, Renzi has some high-profile backers who have cheered the push to perform faster and tighter reforms. The European Union's economic chief Olli Rehn told reporters on Monday he was confident that Italy's new government would continue with its fiscal consolidation, and aim to tackle its economic competitiveness and high level of public debt.

Italy posted a moderate quarterly gain in gross domestic product (GDP) of 0.1 percent on Friday but it has continued to struggle to keep its deficit below the EU target ceiling of 3 percent of GDP.

The country's debt as a proportion of its gross domestic product was 127 percent in 2012, according to European statistics database Eurostat. The only other euro zone country with a higher debt level is Greece at 159 percent. The country's unemployment rate remains stubbornly high at 12.7 percent.

(Read more: 'Demolition Man' Renzi's next fight: Berlusconi)

Nielsen believes there is a "fair chance"that it could start to pay down its debts but said that growth, helped by these tough economic reforms, would be the one driver enabling this to happen.

"If they can generate growth, that is the only way out...there is no other way," he said.

There was also good news coming from the financial markets for Renzi on Tuesday. Markets ticked higher last week in anticipation of his arrival, despite remaining flat on Monday. However,analysts at Societe Generale have grown so favorable on Italy's new leader that they have "called the turn" on the nation's banks and are urging investors to use it as a buying opportunity.

"(It's) time to become more upbeat on Italy," Carlo Tommaselli and Dominic Watt said in a research note on Tuesday,adding that the political reforms ahead and improving Italian bank valuations meant they were growing more optimistic on the sector.

By CNBC.com's Matt Clinch; Follow him on Twitter @mattclinch81

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