ALL EYES will be on the stock markets this morning following the nomination last night of economist and former European commissioner Mario Monti as Italy’s next prime minister.
A technician and non-parliamentarian, Prof Monti replaces media tycoon Silvio Berlusconi, who resigned on Saturday evening in the wake of international market concern about his handling of the Italian economy.
Mr Monti’s nomination was welcomed by EU Commission chief Jose Manuel Barroso and European Council president Herman Van Rompuy. “We believe that it sends a further encouraging signal – following the swift adoption of the 2012 Stability Law – of the Italian authorities’ determination to overcome the current crisis,” they said.
Mr Monti is a prime minister-elect, since he accepted the nomination of President Giorgio Napolitano “with reservation”. He intends to hold further consultations from this morning to establish what level of cross-party support he might expect.
He is then expected to form his cabinet, perhaps comprising only “technicians” and not party politicians, before presenting it for approval in both houses later this week.
Speaking last night, President Napolitano said the economic emergency in Italy argued strongly in favour of a technical or institutional-type government rather than an early election. “I think we should all be agreed that it is absolutely essential to avoid a hasty call to the polls, with a subsequent void of government . . . It is in the general interest of the country that we work hard to form a government that can count on the broadest possible support in parliament with a view to some urgent choices.”
He said between now and next April, Italy would be selling €200 billion in government bonds. He also reassured markets about the timetable of the formation of the Monti government, implying media speculation that the new government would be in place by this morning was not realistic: “Monti will do it in as quick a time as it takes him to listen to everyone and make his evaluations.”
For his part, Mr Monti promised to act “swiftly but carefully”, adding that he was taking on the task out of a sense of responsibility “at a moment of particular difficulty for Italy”. The prime minister-elect also said his government’s mandate was to correct the state finances and to promote growth, but to do so “with attention to social equality”.
The fact that after two days of informal talks, Mr Monti has still not settled all the details of his cross-party support comes as no surprise. There was much uncertainty over the weekend about the exact nature of the support offered by Mr Berlusconi’s People of Freedom (PDL) party, the largest in the current parliament.
In a televised address last night, however, Mr Berlusconi assured his support for the Monti government, saying: “There is no real alternative to our (PDL) government, but at the same time we’re ready to support the efforts of the president to create a technical government.”
In that same TV address, however, he denied that he was withdrawing from politics, adding he had been bitterly disappointed by the noisy demonstrations and festivities that had marked his resignation on Saturday.
In reality, Mr Berlusconi spent much time over the weekend negotiating the precise nature of the PDL’s support. At a meeting with Mr Monti on Saturday, he is reported to have offered his party’s support in return for specific commitments. However, Mr Monti refused to give Mr Berlusconi any guarantees.
As things stand, all the parties bar the Northern League have agreed to support the Monti government.