Italy is expected to face days of political horse trading for key posts as Matteo Renzi begins talks to form a coalition government.
Democratic Party (PD) Secretary Renzi, who is set to become Italy's youngest prime minister, is expected to take control of the country via the back door after engineering a backlash against former premier Enrico Letta. Letta tendered his resignation last week.
President Giorgio Napolitano met with Renzi on Monday for 90 minutes and gave him a mandate to form a government, according to Reuters. Renzi accepted the task and now has to seal a coalition deal before a formal vote of confidence in parliament later this week.
"I have accepted with responsibility and a sense of the importance of the challenge before me," he told reporters on Monday, according to Dow Jones. "I have assured (the president) that I will dedicate all my energies during this difficult time."
Renzi added that he would present a program for the reformation of the country's electoral system before the end of February. This would be followed by changes to the labor, tax and public administration laws by May, he said.
Marco Elser, a partner at Rome-based investment bank Advicorp told CNBC that Renzi's task ahead is akin to "walking into the lion's den."
"His strength is popular support and that popular support is going to go away unless he forms a government very, very quickly," he said. "He's going into a very powerful lobby of very professional politicians."
(Read More: Renzi set to become Italy's youngest prime minister)
Renzi will not only have trouble forming an inner circle but will also have difficulties trading with other political parties to forge a grand coalition, he said. The PD is the largest party in parliament but does not have the numbers to form a government on its own. It would need the support of a coalition partner, effectively putting other party politicians in the position of kingmaker.
Opposition party Forza Italia, still led by 77-year-old Silvio Berlusconi, could also unsettle the apple cart. The former PM has been ejected from his seat in the Senate because of his recent conviction for tax fraud but told journalists over the weekend saying the party would be a "responsible opposition".