MUCH TO the relief of both Italy’s EU partners and of international observers, former EU commissioner Mario Monti last night confirmed that he is in a position to form a new Italian government to replace that of media tycoon Silvio Berlusconi who resigned last Saturday.
Thus, after an Italian government crisis of unprecedented brevity and urgency, technocrat Mr Monti is expected to present his government for a vote of confidence in both houses of parliament by the end of the week, effectively taking office on Friday.After difficult and delicate negotiations in which both the main parties in parliament, the majority People of Freedom (PDL) party of Mr Berlusconi and the opposition Democratic Party (PD), had expressed a variety of concerns, Mr Monti now believes he has obtained the necessary parliamentary support to introduce a series of hard-hitting austerity measures that will steer the euro zone’s third-largest economy through the global recession.
In a brief news conference last night, Mr Monti struck an optimistic note, not only confirming that he will this morning present his cabinet list to President Giorgio Napolitano but also adding that he had “every belief” that Italy can “overcome this difficult moment”.
He said that during his two days of consultations with political parties and social partners, he had been impressed by the sense of “emergency” expressed by everyone: “I received confirmation from everyone of a full awareness of the current emergency. I have been positively struck by the sense of responsibility shown by all parties as well as a real willingness to give agreed and effective answers to the current emergency, answers that will lay the basis for a stable and long-lasting economic, social and civil growth.”
In particular, he said that he had been struck by the willingness of the trade unions to accept measures which, while they clearly did not like them, they would nonetheless contemplate in the context of steering Italy out of the current crisis: “I can therefore assure you that . . . tomorrow morning I will be able to offer the head of state the conclusions of my work . . . I also want to assure you right now that I have every belief in the ability of our country to overcome this very difficult moment.”
Earlier in the day, the urgency had been confirmed by yet another miserable day on the markets as Italy’s 10-year bond yield climbed again to over 7 per cent, pushing borrowing costs to a level judged to be unsustainable by most analysts. By the end of the day, the Milan stock exchange was down with the benchmark Ftse Mibtel index closing at minus 0.8 per cent. From the Italian viewpoint, the only consolation to be derived from these poor figures was the fact that they came on a day when both French and Spanish government bonds also lost heavily.
As he prepares to take office, Mr Monti was yesterday urged to act swiftly, introducing his toughest and most unpopular legislation such as pension reform, labour reform and a wealth tax almost immediately. Many observers believe that later on Mr Monti may not be able to call on the parliamentary consensus for what will clearly be an unpopular programme.