Italian PM-designate works on government, many ministers to stay put

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Italian Prime Minister-designate Paolo Gentiloni has the parliamentary backing needed to form a government and is expected to keep many of the ministers from the outgoing administration in place, political sources said on Monday.

Barely 24 hours after receiving a mandate from President Sergio Mattarella to lead a new government, Gentiloni said he would see the head of state at 5.30 p.m. (1630 GMT) in a sign that talks with party leaders had proved successful.

Outgoing premier Matteo Renzi, who resigned last week after suffering a heavy defeat in a referendum on his constitutional reform plans, said he expected an early election in 2017.

Gentiloni is a loyal Renzi ally who is unlikely to undermine his predecessor within the ruling Democratic Party (PD). In a sign he was sticking to his master's script, he was expected to include many members of Renzi's team in his cabinet.

Two sources said the one major change was almost certain to see Interior Minister Angelino Alfano, head of a small centre-right party, replace Gentiloni as foreign minister.

Another political source said Economy Minister Pier Carlo Padoan, who is trying to defuse a crisis in the banking sector, would stay put. "It is 99 percent sure that he will remain where he is," the source said.

The cabinet is likely to be sworn in on Tuesday, with parliamentary votes of confidence expected later in the week.

One of Gentiloni's main tasks will be to draw up a new electoral law that, if done swiftly, could open the way to an election in the first half of 2017, a year ahead of schedule.

Italy has different electoral laws for its two chambers and the president has said they need to be harmonised to try to make sure a coherent government can emerge from the next ballot.

The anti-establishment 5-Star Movement is pushing for a rapid reform and a vote as soon as possible. Renzi wants an early election, hoping to steam-roller critics within his PD and present himself as the party's prime ministerial candidate.

"The next election, presumably in June, will be held with a proportional voting system," Renzi said in an interview with Quotidiano.net.

The PD leadership held a meeting on Monday at which their internal rifts were clearly visible.

"We need to recognise our errors and radically change course, and the PD needs to do it with a courage that sadly has been lacking up until now," said Roberto Speranza, a leading Renzi-critic within the centre-left party.

Renzi called for a broader meeting of PD members on Sunday, saying it should then set a date for a party congress, where he could put his leadership of the group to a vote.

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