x Abu Dhabi, UAEMonday 24 July 2017

Monti unveils new Italian government

Premier will also serve as as economy minister to resolve debt crisis.

ROME //Italy's new prime minister yesterday announced he had formed a government, choosing technocrats over bickering politicians to enact reforms aimed at saving the nation from financial disaster.

Mario Monti, an economist, is to serve as economy minister as well as premier as he seeks to implement what he called "sacrifices" to heal the country's finances and get the economy growing again.

The 68-year-old former European Union competition commissioner and his new cabinet ministers were sworn in early yesterday evening, formally ending the government of Silvio Berlusconi and his 17-year run of political dominance.

Mr Monti said he would lay out his emergency anti-crisis policies in the Senate today, ahead of a confidence vote. A second vote, in the lower Chamber of Deputies, was to follow, probably tomorrow.

He stressed that economic "growth" was a priority. In explaining why he chose ministers from outside the ranks of Italy's fractious political parties, Mr Monti said consultations with party leaders led him to conclude "that the non-presence of politicians in the government would help it".

Mr Monti has said Italy could beat the crisis if its largely polarised citizenry - often bitterly divided over Mr Berlusconi's long tenure - would pull together.

He has also met with union leaders and employers' representatives.

"I hope that, governing well, we can make a contribution to the calming and the cohesion of the political forces," said Mr Monti.

The shift in power to a technocratic government has caused bickering within Mr Berlusconi's conservative People of Freedom Party, which endorsed Mr Monti.

But Mr Berlusconi's main coalition ally, the Northern League, has said it would stay in the opposition during Mr Monti's government.

Commentators welcomed the ministerial line-up and Mr Monti's decision to take the economy job.

"He obviously wants to be in control of what is the most critical area," said the Mizuho chief European economist, Riccardo Barbieri.

The new administration was formed in less than three days, piloted by the president, Giorgio Napolitano, after market confidence in Italy collapsed.

The process was being closely watched by markets nervous about Italy's ability to break out of a financial crisis centred on its huge public debt and painfully slow growth.

Underlining how much was at stake, yields on Italy's 10-year bonds went through 7 per cent again yesterday, the level at which Greece and Ireland were forced into bailouts.

Euro zone defences are not big enough to fund a similar operation for Italy, its third largest economy.

Mr Napolitano, who engineered the swift government transition, nominated Mr Monti for the premiership on Sunday night.

The president has called for an extraordinary national effort to win back the confidence of markets, noting that Italy has to refinance about €200 billion (Dh991bn) of bonds by the end of April.

* Associated Press, with additional reporting by Reuters