Italian PM Monti resigns as country heads to elections

Mario Monti has handed in his resignation to Italy's president, bringing to a close his 13-month technical government and preparing the country for national elections.

President Giorgio Napolitano accepted the resignation on Friday evening and asked Monti, who said his brief time in office had been "difficult but fascinating", to stay on as head of a caretaker government until the vote, expected in February.

Monti kept his pledge to step down as soon as parliament gives final passage to the 2013 budget law.

In what was his last official public act as prime minister, Monti earlier told foreign diplomats in Rome on Friday that his year-old technical government had rendered the country "more trustworthy''.

He cited structural reforms, such as measures to improve competition and liberalise services, as well as the recently approved anti-corruption law.

An announcement on whether Monti will take part in elections - expected in February - will probably be made at a news conference on Sunday.

Monti was brought in to form a technocratic government last year.

However, the conservative People of Freedom party of his predecessor, Silvio Berlusconi, withdrew its support for his cabinet this month.

Berlusconi, a three-time prime minister already, is fighting his sixth election campaign.

The new political uncertainty in Italy, the third-biggest economy in the eurozone, has unsettled investors.

Sources close to the technocrat prime minister insist he has yet to decide whether to join the race, despite appearing to launch a bid for a key role in the campaign with a rousing speech at a Fiat factory on Thursday.

"Monti has not made any decision yet," sources told the AFP news agency.

His popularity is also said to be taking a downward spiral, declining from a peak of 62 percent shortly after he came to power down to 33 percent at present.

Some political observers have been speculating that Monti is planning to take part in the campaign as unofficial leader of a centrist coalition that has been likened to the Christian-Democrats who dominated Italy for decades.

Monti's name cannot be on the ballot as he is already a senator for life, but he can still be appointed to a post in government including prime minister or finance minister.

The AFP cited sources quoted by the newspaper Corriere as saying the centrist agenda will include "historic reforms" and "far deeper liberalisation than we have witnessed so far".

According to the online edition of La Stampa daily, Monti had been eager to run for the top job but has now given up on the idea.

Opinion polls suggest the centre-left Democratic Party, under Pierluigi Bersani, will win the largest share of the vote in the election.

Since taking office with his non-party team of ministers, Monti has been implementing economic austerity measures and argues that his spending cuts and tax hikes have staved off disaster.

The economist and former European commissioner cannot stand for election himself as he is already a senator for life but he could theoretically return as a minister, perhaps as unofficial leader of a centrist coalition.

"Those closest to him say he has not yet decided and do not rule out a surprise decision," the Italian daily Corriere Della Sera said.

"Slowly, as the hours pass, the largest parties which supported Monti begin to see him as a potential adversary."

On Thursday, Monti, 69, defended the "bitter medicine" of budgetary discipline, in what appeared to be a response to attacks by Berlusconi on austerity policies.

Monti told workers at the Fiat factory that it would be "irresponsible to waste all the sacrifices that Italians [had] made".

On Friday, he joked that the impending end of his technocratic government was "not the fault of the Mayan prophecy", referring to a prediction that the world would end on Friday.