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Italy's technical government to be sworn in today
Italian new government to be announced today, as economist Mario Monti will announce his technical government and take office, as European markets mount pressure on Rome to speed up implementation of economic reforms.
Economist and former EU Commissioner Mario Monti will officially become Italy's 'interim' Prime Minister and lead a technical government following Silvio Berlusconi's resignation on Saturday
Monti will call on President Giorgio Napolitano and be sworn in with a new cabinet, which is expected to be formed mainly by technocrats rather than politicians who have been relegated to their parliamentary benches as they continue to argue over the reforms.
In intensive political discussions this week, Monti has sought to build consensus around the idea that Italians will have to make "sacrifices" to stave off bankruptcy and restore the country's credibility in Europe.
A widely-respected economics professor, Mario Monti has already met and won endorsements from the leaders of all the main political parties, trade unions and businesses as well as representatives of women's and youth associations.
He stressed he wants his cabinet to stay in power until 2013, the scheduled date for Italy's next election and he has called for an end to an "extremely tense" political mood.
Announcing his resignation last week, former Prime Minister Slivio Berlusconi said he wanted early elections. He has since given his support to Monti but has vowed to make a political comeback and remains an influential figure on the political scene.
Yesterday, Monti said Italy needed "economic, social and civil growth that is stable and long-lasting" and he has called for "social equity" as he prepares the country for painful reforms in line with demands from Brussels.
He has said he is "absolutely convinced" Italy can overcome its debt crisis but will have to move quickly to reassure the international community.
The European Union already gave its firm approval to Monti even before his formal confirmation, but has warned that Italy may need to impose extra budget cuts on top of two austerity plans approved earlier this year.
The EU and the International Monetary Fund this month imposed a humiliating auditing mechanism on the country, the eurozone's third largest economy and an EU founding member, to ensure it is fulfilling its reform promises.
Italy's high public debt of €1.9 trillion is relatively stable and its deficit relatively low, but the country's anaemic growth rate and recent political weakness have pushed up borrowing costs.
The rate on Italian 10-year bonds yesterday smashed through a 7.0-percent threshold that analysts warn could trigger cash-flow problems within months.
Stocks were also under pressure this week, particularly after aerospace and defence giant Finmeccanica and Italy's biggest bank, UniCredit, revealed heavy losses. Italian stocks closed 1.08 percent yesterday.
