Letta asked to form government in Italy Enrico Letta, former deputy leader of the centre-left Democratic party, was nominated on Wednesday as the next prime minister of Italy as Giorgio Napolitano, head of state, moved swiftly to end two months of deadlock following an inconclusive general election. Mr Letta has to try to form a broad coalition with the centre-right led by former prime minister Silvio Berlusconi that is also likely to include ministers from a small centrist group headed by caretaker prime minister Mario Monti. The nomination of Mr Letta came as a surprise as even on Tuesday, when Mr Napolitano, held a day of consultations with all the parties, the most tipped name was that of Giuliano Amato, former Socialist prime minister and a 74-year-old veteran on the political scene widely respected abroad. News of the breakthrough helped drive down Italy's two-year sovereign borrowing cost to 1.17 per cent, the lowest level since the launch of the European Monetary Union in 1999. Mr Napolitano, in brief remarks to reporters, said he had chosen Mr Letta as "as, though belonging to a young generation, he has already accumulated important parliamentary experience, he has been in contact with new generations, involved in government activities, in the cultural field and has been present in numerous European and international forums." Mr Napolitano said a broad convergence of the political forces that could ensure a government majority in both chambers of parliament was "the only possible perspective." Accepting his nomination, Mr Letta said he was surprised to receive the call from the head of state on Wednesday morning. He said he would begin consultations with all parties from Thursday on putting together the coalition. "I repeat this is a complicated and difficult attempt," he said. Italy had gone some 60 days since February""s general election without a new government and could no longer go on like this, Mr Letta said, appealing to all parties in parliament to support much-needed reform. He described the state of Italy's economy, after nearly two years of recession, as being in an "enormous and unbearable crisis." Mr Letta said in a brief press conference at the Quirinale presidential palace that he felt "a deep sense of responsibility . . . heavier than what my shoulders can bear." I take on this commitment, with great determination, as I think that this country needs answers to this enormous and unbearable emergency. He defined the future government as one at the service of the country that needed the widest possible participation. In remarks indicating the hurdles that lay ahead on agreeing a cabinet, Mr Letta added: "This government will not be born at all costs but only if there are the conditions." Mr Berlusconi has made clear that he wants the next government to fulfil his election campaign pledge to abolish an unpopular housing tax imposed last year by Mr Monti's technocrat government and to pay back Italians the tax they already paid. Some of Mr Berlusconi's allies have suggested that this promise should be a condition for agreeing to enter a coalition government. Mr Letta also stressed the need for immediate institutional reforms and measures to create jobs and lift Italy out of recession. "Europe's policy of austerity is no longer sufficient," he said. One official, who asked not to be named, said the new government could be sworn in by Mr Napolitano early next week. Under the constitution the government then has up to 10 days to prepare for a vote of confidence in parliament. Commentators speculated that Angelino Alfano, former centre-right justice minister and a Berlusconi loyalist, would be appointed deputy prime minister, while Mr Monti could become foreign minister. Mr Napolitano, 87, was re-elected by parliament for an unprecedented second seven-year mandate on Saturday to break the deadlock. Mr Napolitano implicitly threatened to resign if the parties did not bury their differences and form a grand coalition. The entire leadership of the Democratic party, including Mr Letta, resigned at the weekend after a large-scale internal revolt torpedoed the party's candidates as head of state in five rounds of voting.