The BBC's David Willey, in Rome, says thenew government has to deal with a rapidly declining economicsituation, rising unemployment - particularly among the under-35s - and lack of growth, despite some draconian austerity measures passed by the previous government of technocrats.
W. David Montgomery, senior vice president at Nera Economic Consulting, a New York firm, summed up thesituation quite clearly in testimony at a November 2nd congressional hearing.
The talks are being held against the backdrop of what appears to be a steadily deteriorating economicsituation, highlighted by thousands of new private sector job cuts and record low consumer confidence.