Arab Today, arab today economist monti picked to lead italy out of debt crisis
Last Updated : GMT 18:22:15
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Economist Monti picked to lead Italy out of debt crisis

Arab Today, arab today

Arab Today, arab today Economist Monti picked to lead Italy out of debt crisis

Rome - AFP

Former European commissioner Mario Monti on Monday moved to form a new government to lead Italy out of an alarming debt crisis that has shaken the eurozone, winning swift approval from the markets. The 68-year-old economics professor, nominated on Sunday to replace toppled premier Silvio Berlusconi, faces his first test in the shape of a bond issue which will give an indication of Italy\'s ability to avoid a debt blow-up. The technocrat\'s nomination as prime minister has already won endorsements from Italy\'s main parties including Berlusconi\'s People of Freedom, but formal confirmation of the new technocratic cabinet could take several days. \"Italy must again be and must increasingly be an element of strength, not weakness in a European Union that we helped found and in which we should be protagonists,\" Monti said after his nomination by President Giorgio Napolitano. The president said he hoped the new government would be approved with a confidence vote in parliament by the end of the week as it will have to move quickly to implement painful austerity measures and long-delayed reforms. Italy\'s markets opened higher and rose quickly more than 2.0 percent, following a rise on Asian markets. The euro also climbed against the dollar on the back of the political shuffle with Monti\'s formal appointment expected within days. Italian borrowing costs fell to 6.34 percent -- sharply below the 7.0-percent warning threshold which it had breached earlier in the week, easing some fears that it may follow in Greece\'s footsteps in needing a bailout. Though high, Rome\'s yields are not \"such a big issue\" and the European Central Bank does not need to do more to help Italy, which \"is very different from Greece in a lot of respects,\" Bundesbank chief Jens Weidmann said Monday. Padhraic Garvey from ING Rates Strategy said: \"positive market effects have already been seen... The big question now is whether investors will use this as an excuse to increase exposure into Italy\" in the bond auction later Monday. But Italy\'s Sole 24 Ore financial daily said the markets were very uneasy and \"any delay in forming the Monti government could be extremely dangerous.\" Monti promised he would act \"with urgency\" and said he would work with parliament \"to get out quickly from a situation which has elements of an emergency but which Italy can overcome with a united effort\".  The economist, who officially has a maximum of 10 days within which to put together his government, vowed \"to resolve the financial situation and resume the path of growth, while remaining attentive to social equity.\" \"There is little time and great urgency,\" said former premier and ex-Bank of Italy head Carlo Azeglio Ciampi, who oversaw his own technical government in 1993 and warned that Monti\'s appointment was \"an occasion not to be wasted.\" Monti was the former top trust-busting bureaucrat in Brussels who famously took on, and won, cases against US giants Microsoft and General Electric -- and on Sunday European leaders immediately applauded his nomination. European Commission chief Jose Manuel Barroso and EU president Herman Van Rompuy said the nomination \"sends a further encouraging signal ... of the Italian authorities\' determination to overcome the current crisis.\" In the unlikely event that Monti fails to form a new government, Napolitano would be forced to dissolve parliament and call early elections. International leaders including US President Barack Obama and French counterpart Nicolas Sarkozy are pushing hard for Italy to move quickly to form a new government and adopt economic reforms.  The European Union, which together with the International Monetary Fund is auditing Italy\'s accounts, said it would monitor Italy\'s reforms and that the country may need to pass extra austerity measures. A defiant Berlusconi, whose resignation on Saturday after a wave of market panic was greeted by scenes of jubilation in the streets of Rome, meanwhile vowed to make a political comeback saying: \"I will not give up.\" The 75-year-old said he had resigned \"out of a sense of responsibility\". Fears of a prolonged political and financial crisis have pushed up Italy\'s borrowing costs to record levels, setting off alarm bells around Europe and warnings that the Italian economy is \"too big to bail\". Reports of Monti\'s impending nomination helped ease market jitters last week but the toxic mix of a 1.9 trillion euro ($2.6 trillion) debt, an extremely low growth rate and high bond rates has kept investors anxious.

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