Even before the dust settles from the Italian election the tasks any Romano Prodi-led government faces are clear. Tackling the country’s economic problems may well be complicated by internal struggles within the administration. There is also the fraught issue of withdrawing Italian troops from Iraq, in line with campaign promises.Speaking to journalists, Prodi was upbeat: “We shall do what we said in our platform. You have to consider that there will be between one and two months before the government can start to operate.” This period has its own difficulties, including establishing the new parliament. And after May 13 the two houses must turn their attention to the election of a new president for the republic. The incumbent, Carlo Azeglio Ciampi, was elected in May 1999. But the 85-year-old has signalled for some time his intention to retire at the end of his present mandate. It will be down to the new president to nominate a prime minister. There will then be more constitutional issues to attend to, namely organising a referendum on federalism and reforms to enhance the powers of the prime minister. The electorate will also want to see early action on dragging Italy out of its economic stagnation. In 2005 growth was negligible. The state is running a debt of 106 per cent of gross domestic product, and that is expected to rise. The budget deficit, at over four percent, is in breach of EU rules. The poor economic situation has produced its own social problems with youth unemployment at around 23 per cent. In a bid to stimulate growth and increase individual consumer spending power by up to 600 euros per year, the centre-left has come up with what it regards as a landmark proposal. They say they will reduce social charges by five percent, to the value of between eight and 10 million euros. The new administration will also have to address the problems of competitiveness faced by Italian industry.