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Mario Monti will present his government to the Italian president today - paving the way for him to formally become prime minister.
Mario Monti will present his government to the Italian president today - paving the way for him to formally become prime minister.
Image: Gregorio Borgia/AP

Monti set to announce new Italian government

Mario Monti completes two days of tense negotiations, and is set to present his new government to the president this morning.
Nov 16th 2011, 8:02 AM 473 2

ITALY’S INCOMING prime minister Mario Monti will today present his new government to the country’s president – and move a step closer to formally take office.

Monti said last night he was ready to formally present his new cabinet to president Georgio Napolitano, after securing support — and important pledges of sacrifices — from political, business and union leaders during two days of intense talks.

Monti said he still had to put the finishing touches to his government’s economic programme, which will form the main plank of his temporary government’s responsibility.

His government will then formally take office if it passes votes of confidence in both houses of Parliament, which expected this week.

Yesterday, after successive rounds of meetings, Monti garnered support from the centre-left Democratic Party, the centre-right People of Freedom party – led by Silvio Berlusconi – and the Confindustria, a powerful business lobby.

“We strongly support the birth of this government because for us it is the last chance to regain credibility,” Confindustria leader Emma Marcegaglia said.

Union leader Raffaele Bonanni said Monti was close to completing his Cabinet at the time they met yesterday afternoon.

Monti expressed his “serenity” and “conviction” in Italy’s ability to overcome the difficult phase in its history.

“I was impressed by the sense of responsibility and willingness to back social growth,” Monti said. “Everyone offered concrete contributions of possible partial sacrifices in exchange for a more general positive outcome.”

A respected economist and former European commissioner, Monti’s main task will be to reassure financial markets that Italy can continue to manage its debt levels and avoid having to look for an EU-IMF bailout.

Having to do so would put tremendous strain on the eurozone’s bailout mechanism, almost totally emptying it, and could well push the global economy back into recession.

Yesterday the cost of 10-year borrowing for Italy rose back above the 7 per cent mark, which is considered unsustainable and a level too prohibitive for countries to borrow at.

The rate is particularly important for Italy because of the sheer size of its national debt – €1.9 trillion – and the fact that many of those debts are falling due in the coming years.

AP said over €300m of Italy’s loans were falling due next year alone – meaning the government would either have to repay them immediately, or borrow further cash – at a higher interest rate than normal – to honour those bonds.

Additional reporting by AP

Read: Italian borrowing costs spike again as coalition talks go on

Read: Italy offloads €3bn in bonds after appointment of ‘Super Mario’ Monti

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Gavan Reilly

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