News24

Monti due to present new Italian govt

2011-11-16 09:08

Rome - Prime Minister designate Mario Monti is expected to unveil Italy's new government on Wednesday after an intense two days of consultations aimed at staving off a major financial crisis that has pushed Italy's borrowing costs to untenable levels.

The presidential palace said Monti would meet President Giorgio Napolitano at 11:00 to tell him formally that a government could be formed.

Monti told reporters on Tuesday night the "framework is now clearly delineated" for his government but declined to give details, saying he would work them out "in the next few hours" and brief the president on Wednesday before announcing them.

Italian media said he would go to the meeting with Napolitano with his cabinet list ready. It was not clear when the government would be sworn in.

The government, expected to be made up of technocrats, will have to tackle a crisis that has brought Italy to the brink of economic disaster and endangered the entire euro zone.

"I would like to confirm my absolute serenity and conviction in the capacity of our country to overcome this difficult phase," Monti said.

Before the end of the week, the new government is expected to outline its programme and seek confidence votes from parliament, which will formally invest it with power.

Monti, who won the backing of all political forces except the Northern League, must push through a tough austerity programme demanded by European leaders to restore shattered confidence in Italy and take market pressure off the country.

Collapse of confidence

Yields on Italy's 10-year BTP bonds climbed to over 7% on Tuesday, the level at which Greece and Ireland were forced into bailouts. Italy is too big to be bailed out with the resources currently available.

Emma Marcegaglia, head of the employers association Confindustria, told reporters after meeting Monti: "We said we will support his government very strongly. We think this government is the last chance for Italy to exit from this situation of emergency."

Crucial to Monti's success was the backing of the PDL party of outgoing prime minister Silvio Berlusconi, who was forced to step down on Saturday by the fast-worsening crisis.

Napolitano, who has engineered the extremely rapid government transition in response to the collapse of confidence in Italy, nominated Monti for the premiership on Sunday night.

The president has called for an extraordinary national effort to win back the confidence of markets, noting that Italy has to refinance about $273bn of bonds by the end of April.

Monti said his government should last until the next scheduled elections in 2013, despite widespread predictions that politicians intend to give him only enough time to implement reforms before precipitating early polls.